I was back at Denny’s last week. Man, those Grand Slam breakfasts are great! So I’m sitting there chowing on my eggs and bacon when, lo and behold, I hear a familiar conversation in a booth behind me. It’s Joe No DRP and Al DRP again! I slowly slump down in the booth, put on my Ray-Bans and turn up the collar on my trenchcoat to avoid notice. This conversation I gotta hear:
Joe No DRP: So, Al, how’s the insurance business?
Al DRP: Man, it’s not so good, Joe. We asked our primary insurance partner for a $2 per hour labor rate increase, and they told us flat out “No”! We’ve been working seamlessly with them for over 10 years, but it seems like they couldn’t care less about the solid business relationship we’ve developed with them. If our costs keep increasing and our labor rate stays the same, we’re going to be out of business…and fast!
Joe: Gee, that’s a surprise! Don’t you know that all they care about is who gives them the best deal?
Al: I suppose. But what can we do? We get 50 percent of our workflow from them. If we terminate our deal, we’ll be screwed! And our competitor down the street will gladly take the work.
Joe: Let him! It’s better that he work for free than you. After all, didn’t you get into this business in the first place to make money?
Al: Of course, but…
Joe: Look, I used to do insurance work, too. But then I wised up. We were giving away too many things, and they kept asking for more! So we dropped it, and you know what? Our gross sales went down but our net profit went up!
Al: Really? But how did you withstand the sudden lack of work?
Joe: Well, it wasn’t easy, I can tell you that. It’s downright awful when your volume suddenly drops 25 percent! But you know what? I figured out how much money I had previously been losing doing this procedure or that procedure for free, and poured it all into a huge marketing blitz: Internet, radio, TV. And guess what? Within a year, we’d recaptured half of the volume we’d lost!
Al: Marketing? What’s marketing?
Joe: It’s what you used to do before you started relying on insurers to waltz work right through your door!
Al: Tell me more.
Joe: We decided to start fighting insurers at their own game. We started offering our own no-hassle concierge service complete with a drive-up estimating area, joined a best-in-class shop network that offers a nationwide warranty, and began our own “accident forgiveness” program where customers get a “credit card” that we add bucks to. This way, our customers have an incentive to come back to our shop when they next get in an accident no matter where the insurers try to send them.
Al: Wow! That all sounds pretty clever. What else did you do?
Joe: We started educating our customers more about how insurers play the claim game, and even gave them a list of “problem insurers.” We told them if they switched their policies from these “problem insurers” to other insurance providers, we would add credit to their accident forgiveness accounts.
Al: So you became a troublemaker? If you didn’t get steered against before, I’ll bet you got it even worse after that!
Joe: Au contraire, mon frere. Our customers became better prepared to handle the rhetoric they’d hear when they filed claims and were less likely to get steered. Also, we found that insurers gained a newfound respect for us based on our willingness to take a stand and not just sit idly by while they stole vehicles from us.
Al: Well, this sounds all well and good, but I’m still a little nervous.
Joe: Look, why don’t you stop by my shop sometime and I’ll show you how we operate.
Al: Really? You’d let me? But we’re competitors…
Joe: Listen, man, we’re all in this together.
Al: Now that’s something you don’t often hear in this industry.
P.S. The above conversation and the two characters are completely made up and a follow-up to my last Editor’s Notes in December 2009. My goal was to illustrate arguments I’ve heard from both DRP and non-DRP shops about how to run their businesses.
Jason Stahl, Editor
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