DRPs Key Part of Puzzle - BodyShop Business

DRPs Key Part of Puzzle

Over the past few months, the Research Department here at BodyShop Business has been busy gathering input and data for an upcoming, comprehensive all-industry report that we’ll be publishing soon. In reviewing some of the initial tabulations, we’re noticing some interesting trends out in the market and gaining a better understanding of how shops are doing.

Clearly, there seems to be an even split among shops that are growing, staying the same or declining in business. In every scenario, this is typically a 33%-33%-33% split, respectively.

Even when cross tabulating those results across the question of whether a shop is looking to hire a technician or painter, some 33% say “yes,” and the remaining 67% say “no.” So, you can probably assume that the 33% who are looking to hire are also those same 30% to 34% who indicate their sales and earnings are up from last year, and feel their fourth quarter business will also be “better” than last. The 67% who are not looking to hire are most likely those who say their business is the “same” or “worse” than last year, and expect the fourth quarter to be down as well.

Those are simple assumptions, and they clearly indicate that a third of you are doing a great job and having a very good year thus far. However, as we continue to peel away the onion, we find some very interesting facts. For example, 58% of you are on at least one direct-repair program (DRP), and another 83% of you indicate that insurance companies are trying to lower, or “control,” rates. That doesn’t necessarily “jive,” but no one is precluded from being impacted by insurance rates, even if they aren’t on any DRPs.

For those of you who aren’t affiliated with any DRPs (at least, by your own choice), you may want to re-think that strategy. According to our figures, 71% of those who indicated their third quarter sales had increased or at least stayed the same this year over last had at least one DRP in place. Of the 29% who said their business was down from last year, 46% had no DRPs in place. The evidence here seems to indicate a strong case for participation in DRPs.

We’ve been writing for months now (and will continue to do so) about more efficient ways to manage your shop and your business. However, without a steady flow of business, those practices are hard-pressed to produce any significant results. A decent DRP, at the very least, should be capable of at least delivering a steady flow of business. Certainly, there are always going to be unique circumstances that buck the trends of any survey or data analysis. However, based on these numbers, it seems relatively clear that participation in DRPs leads to traffic. It’s that steady flow of volume that enables you
to generate cash and operate the
business.

However, the purpose of being in business is to serve your customers in a quality manner and to earn a profit by doing so. That said, how did DRP participants stack up when it came to increased earnings over the past year? Some 37% who had higher earnings this year over last are on DRPs, and only 19% are not. Clearly, DRPs play a role in assisting you to make more money. They are not the sole reason as to why and/or how you can make more, but clearly they are a key part of the puzzle.

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