Consolidators: Two New Auto Glass Now Locations Open in California
How do you get DRPs in a market where insurers already have enough shops on their lists?
So, the question is, “How do I get my collision center on XYZ Insurance Company’s DRP list?” Many are asking that question, seeing DRP participation as the key to success, or maybe survival, in today’s collision repair industry.
In reality, the decision to participate in a DRP is a marketing one. Certainly, DRP is an emotional topic. It always has been. But at its core, without the emotions, it’s a marketing issue.
“Marketing” has many definitions. The easiest one is, “Everything you do to bring a customer to your door.”
Marketing is big! It’s advertising, yes, but also how your customers talk about you, how your building looks and how your staff greets everyone seeking an estimate. Marketing is your Internet presence, your participation in civic activities, TV, radio, publicity and much more.
Why would anyone want to participate in a DRP? It’s simple: to bring more work to the door. And to hopefully make more money, too! Since the primary reason any shop wants to participate in a DRP is to bring more work to the door, the DRP should be viewed as a marketing activity.
Every business should have multiple marketing strategies. Even the smallest collision repair shop should have a marketing strategy to develop repeat and referral business. You may have one marketing strategy designed to solicit dealer referrals, another one targeting owners or a particular make of vehicle, and still another directed at a zip code in which you wish to develop consumer awareness. A healthy business draws work from many sources and has marketing strategies designed to grow volume from all of them.
Participation in a DRP is one of many ways to generate volume. Getting on a DRP requires a marketing strategy. Just like building a marketing strategy to generate volume from a nearby zip code, marketing for a DRP is done in steps using multiple marketing tools. By the way, DRP marketing has a cost, just like running a TV ad campaign.
Any marketing takes time. No matter what marketing target you have, there is simply no quick marketing strategy. You need to build a marketing strategy, and implement that strategy repeatedly over time if you expect it to work.
How Do I Get on a DRP?
You’ve probably asked an adjuster or DRP coordinator, “How do I get on your DRP?” The answer is usually, “We’re not looking to add anyone right now.” Remember, “No” doesn’t mean “no,” it means “keep selling!” Find many ways to ask. Marketing for a DRP will take time.
1. Define Your Target
Which insurance companies share a common customer philosophy with you? Chances are if you fight and argue with XYZ’s adjuster every time they come in over compensation for standard, non-included labor operations, you won’t be happy being on XYZ’s DRP. Make a list of companies with which you do business. The ones you have good working relationships with are probably better targets for your DRP strategy than the ones you dread.
Insurance companies that you do a large volume with now are good DRP targets. If their adjusters are in your shop on a daily basis, they have an interest in adding you to their DRP to save the administrative cost of sending adjusters out over and over again.
2. What Are Your Target’s Needs?
Once you’ve decided which insurance carriers you want to target with your DRP strategy, determine their needs. Are they really concerned with reduced cycle time and high CSI? Do they want I-CAR Gold shops or manufacturer certification? What’s their stand on aftermarket parts? Some are simply focused on reducing severity, at any cost.
Have open discussions with their adjusters. Ask other shop owners who are on their programs what they think of them. Find out what they’re looking for so you can decide if this is a relationship you wish to pursue and what you need to include in your marketing tools.
What Key Performance Indicators (KPIs) does your target insurance company use to determine shop performance, and which KPIs do they believe are most important?
3. Create Your Own DRP “Application”
Many of us have asked over and over again for a DRP application. Why wait? Everyone does that. Go to the grocery store and look at oranges. They all look pretty much the same. But the one that stands out is the one you buy. Marketing your shop is nothing more than making your shop that special orange. You don’t stand out doing what everyone else does.
Create your own DRP brochure, or application. Some refer to this as creating your resume. Once you know what your target insurer requires, build a brochure highlighting how your shop can fill their needs. Use lots of photos. Include the usual licenses, I-CAR status, ASE certification, equipment lists, etc. But use photos to tell your story.
Make sure you can document the KPIs your target feels are most important. If your target company focuses on CSI and cycle time, you should include your CSI and cycle time reports in your application. If they’re focused on severity and supplement ratio, be sure to document your ability to provide an accurate initial damage analysis, reduce supplements and maintain a competitive cost structure.
Your resume is going to represent your company to the insurance DRP coordinator. Take the time to make it a good one. Many find it good to hire a professional photographer to take a series of photos of the shop and crew looking their best. Get the photos on a CD; you’ll find many uses for them.
4. Present Your DRP Application
You’ve taken the time to research the DRPs in your market. You’ve determined what the individual insurance carriers feel is important in a DRP shop. You’ve created your own professional DRP application to highlight your collision center’s ability to meet their needs.
The next step is to get that application in front of a decision-making person at your target insurer’s office. This person is usually the DRP coordinator. Check with the adjusters who call on your shop to determine who should receive your DRP application. Ask agents or other shop owners and managers who the DRP coordinator is.
One you know who to contact, call to set up an appointment to review your application in person. Don’t be surprised to be told, “We’re not currently adding shops,” or, “I’m not looking for a shop in your area.” That’s fine, but work for an in-person discussion anyway. In marketing and selling, “no” doesn’t mean “no” until they say it six times! Persistence pays.
If you’re unable to schedule an in-person visit, send your DRP application to the DRP coordinator and follow up with a call to review the information. Then ask for a face-to-face meeting.
At the face-to-face meeting, point out how your collision repair center can meet the needs of the insurance carrier. Look for areas of agreement. Ask, “How can we help you?” rather than, “How do I get on your program?”
The real purpose of the face-to-face meeting is to secure an agreement for the DRP coordinator to visit your collision repair center. Don’t expect to get added to the program, just get the agreement for a visit. Remember, marketing takes time.
5. The Coordinator Visit
Once you have an agreement for the DRP coordinator’s visit, you have to keep the shop ready for inspection at all times. You never know when they’re going to show up!
When the DRP coordinator does arrive, give them a tour of the shop, focusing on your processes that result in the KPIs you included in your application. You’ll still hear, “We’re not looking for a shop at this time,” and that’s okay. Bring out a report showing how many visits their adjusters are currently making, or a report comparing their cycle time to another company with which you have a DRP, to demonstrate the value of doing direct business with your collision repair center.
The real purpose of the visit is to secure a copy of the insurance carrier’s DRP application. Ask for their application at the end of the visit. If the DRP coordinator has told you that they’re not looking for any shops, ask for the application again. Get a copy! If possible, get it in an electronic format. If not, scan it and complete it on a computer. Don’t submit a handwritten application!
6. Deliver the Application, Ask for the Contract
If possible, set an appointment to hand deliver the completed insurance company DRP application. Attach another copy of your DRP application to the insurance copy. Review both with the DRP coordinator.
The purpose of this meeting is to obtain a copy of their DRP contract. You may still run into the “We’re not looking for someone” comment, but be persistent. Odds are that if you’ve gotten this far, the DRP coordinator is considering your shop as a candidate.
One great marketing tactic is to market to be the target’s “No. 2 choice.” Odds are, they have a DRP in your market that’s No. 1. Bumping a competitor out of that position is tough, but marketing to be the No. 2 shop is much easier. If you outperform the No. 1, or if the No. 1 drops the ball, you as No. 2 can move into the top spot.
7. Review the Contract and Evaluate the Costs
Once you have a copy of the contract, review it. Review it with your liability insurance carrier. Review it with an attorney. DRP contracts are complex and may commit you to liability issues and performance requirements you may not see. Your insurance carrier and attorney may point out areas of the contract in which you accept liability for events for which your current policy has no coverage – which may result in additional insurance costs to you.
Example: Does agreeing to a DRP contract commit you to accepting liability for “acts of God” such as a hail storm? If so, does your garagekeeper’s liability contract cover that? Will that clause increase the cost of your insurance?
Don’t jump into an agreement without a full, professional review. With the contract, you can fully evaluate the cost of participation. A DRP, like any marketing strategy, has costs. Labor and parts discounts are easy to see. Paint caps, loss of gross profit dollars by the use of non-OEM parts, storage waivers, loss of sublet markup and non-included operations that you may be agreeing to perform at no charge under the contract are all costs. Hidden costs, such as increased liability, need to be considered as well.
Fully evaluate the costs of participation. Once you have a handle on the cost of a DRP, meet with a good local ad agency. Determine what the impact to sales would be if you invested the same amount of money in “conventional” marketing.
8. Do the Deal
If you’ve decided, after careful review and evaluation, that a DRP is a good deal for your company, do the deal. You may have several areas of concern, so negotiate with the DRP coordinator over items of disagreement. I like to include the P-pages for the estimating system being used in the contract, listing allowances for all of those non-included items that will pop up later.
When you’ve arrived at an agreement you’re satisfied with, sign the contract! Do the deal! You’ve gotten on a DRP!
But you’re not done. Marketing keeps on going. Be proactive scheduling regular reviews with the DRP coordinator. Maintain tight control on the KPIs that you and the insurance carrier have agreed are critical.
Remember: There’s a shop in your market calling that same DRP coordinator and wanting to be added to their program. Once you have the DRP, you must shift into a defensive marketing strategy to hold onto the program.
Warning No. 2: Don’t depend on one marketing strategy. Just because you’ve gotten on a DRP or two or three doesn’t mean you should stop other marketing efforts. Everyone should have a customer retention and referral strategy working all of the time. Make sure your estimators don’t forget how to sell. Track close ratios constantly. We’ve seen many shops become DRP-complacent and let great jobs drive away because we’ve gotten used to processing DRPs.
Constantly evaluate the DRP. What if they take it away? What if the cost of the program is too high and you could do better spending that money in other marketing strategies?
Hank Nunn is a 35-year collision industry veteran. Among his many roles, he has been an adjuster, shop owner, technician, consultant and trainer. Currently, he’s western regional collision director for AutoNation. The material for this article was taken from Hank’s “Marketing for a DRP” presentation at NACE 2011. He may be reached at [email protected].