I’ve talked with enough shop owners around the United State to know there’s more than one way to succeed in this industry. You can focus on high-end vehicles or send those down the street. You can succeed in the big city, or in a rural community. You can do it with lots of square footage and abundant outside parking, or you can rock it in a smaller shop with little space beyond your four walls.
I’ve seen shop owners succeed with the vast majority of their work coming through direct repair programs (DRPs) – and I know successful shop owners without a single DRP.
So when I write about what’s worked for my company, I’m by no means saying it’s the best (or only) path to success. We’ve chosen to build our business largely through good DRP partnerships. We’re not alone. Recent data from Mike Anderson’s “Who Pays for What?” surveys indicate that about two thirds of shops are in a DRP with one or more of the largest eight insurers.
For those of us in that group, I believe success is based on one key thing: Performance drives cars to your door. You can advertise, you can offer whatever promotion you want in the world. But if you want cars coming to your door, truly focus on performance. That’s what has worked for us.
You may think that what insurers want is different from what customers want. But think about even your customer-pay work. What are those customers most likely to judge their satisfaction on? Insurers are focused on cycle time or touch time, for example, and, sure, there’s a financial-based reason they care about that. But they also care about it because that’s what customers want, too.
That’s why I can tell you that when we’re in the top 25 percent of our market area in performance, cars come our way. That may vary from one insurer’s program to another. But I can tell you for our two largest DRPs, it makes all the difference in the world. They reward performance.
Let’s look at one of our partners for an example. We’ll call them “ABC Insurance.” They list their DRP shops on a website ranked by performance. Put in a given zip code and likely (since they are a large insurer) multiple pages of their DRP shops will result. But the top three performing shops are always on the first page of results. How many customers will go on to the second or third page of shops? Not many. So our goal is to always, always, always be on that first page, among the top three shops. We don’t have to be No. 1, but I want to be among the top three.
Fortunately, we’ve been there for much of the last two years. But that has not always been the case. And we noticed a drastic difference between staying in the top three compared to when we bounced in and out.
Another one of our partners, who we will call “XYZ Insurance,” designates every shop on the program to one of three tiers – based on performance. We’ve been on that program for about a year, and I can tell you there is a night-and-day difference when we’re top tier. When you’re top tier, they pour it on. When you’re not, it’s crickets.
That’s why we know (in the cases of ABC and XYZ Insurance) at what point each month our performance level adjusts, and checking our status is among the first thing we do.
I know a number of other insurers (for which we aren’t a DRP shop) manage their programs similarly. Other programs may be less structured to reward performance. But no matter which programs you’re on, strong performance has many other benefits as well. Good cycle time helps keep your schedule open, for example, to bring in more work.
I also believe insurers have a number of means within the industry to see the performance even of shops not on their DRP. If they see you are clearly focused on performance, they will seek you out for their program.
As I said, there are certainly other paths to success in this industry. But performance is what has worked for us.
