EDITOR'S NOTES: All I Want for Xmas Is a DRP
By Jason Stahl
12/11/2009
I recently had the good fortune to hear a rousing argument between two body shop owners, one of whom had 67 DRPs and the other had none. They were sitting directly behind me in a booth at Denny’s, so I slumped down a bit so I wouldn’t be noticed. Here’s what I heard:
Joe No DRP: So what the heck are you doing selling out to every insurance company on the planet? How can you sleep at night knowing all the cars getting steered your way and knowing that you’re butchering our market labor rate?
Al DRP: Well, first of all, partnering with insurance companies is a decision that shops as individual businesses have a right to make. Second, insurers have a right to explain to their policyholders the benefits of using a shop in their preferred networks. If that’s steering, then yes, we’re all being steered against. As far as labor rate goes, we’ve gotten so lean and efficient that we may be able to charge less than you and still make a fair profit. Why should I lose sleep over that?
Joe: Ugh! You called them a “partner!” The DRP relationship in no way resembles a partnership! Ever read one of those DRP contracts? It’s totally one-sided in favor of the insurer.
Al: Actually, no, I’ve never read the contract. It doesn’t really bother me. As long as the insurer provides me with a steady stream of cars and I do a quality job for them and the vehicle owner is happy, then I’m happy.
Joe: Quality? Ha! That’s a joke! We all know that DRP shops have to cut corners, otherwise they’d never make the nut!
Al: I disagree. Our insurance partners would never let us do that. Think about it. They’re as concerned about quality as we are. Why would they risk angering a customer over a shoddy repair? Did you know it costs three times as much for an insurer to acquire a customer as it does to keep one?
Joe: C’mon, you know as well as I do that the customer is clueless! They wouldn’t know a top-quality repair if it bit ’em in the backside! As long as the dent’s gone and the vehicle’s shiny, they’re happy! And the insurer knows that so they allow you to do the minimum you can get away with and save themselves a ton of money.
Al: I disagree. See, doing insurance work has made us a better business. We have to maintain a high CSI, keep our shop spic-and-span and be ultra efficient. We’ve improved our repair process to the point where we crank out more cars in a day, and now that they’ve encouraged us to go green, we’re really saving on energy costs.
Joe: But don’t you hate when they come to you with their little report cards saying, “You know, your aftermarket parts usage is a little low this month,” or, “Your cycle time is up a day, what’s the problem?” I mean, it’s your business, not theirs, right?
Al: Well, we have nothing to hide. Their insistence on us tracking metrics religiously again has improved our business. And I still own my shop and make my own decisions. If one day I decide to terminate a relationship with an insurer, I can do that.
Joe: Ha! Good luck with that! You’re already too dependent upon them! That’s what they try to do – get you so you can’t live without ’em, then they really put the screws to you!
Al: Look, not all insurers are bad guys. There are a few that are more difficult to deal with than others, but most are fair and willing to negotiate.
Joe: Negotiate? What does negotiation have to do with anything? They are a third-party payer of claims, nothing more, nothing less. They are obliged to pay the reasonable cost of repairs. There is no negotiation.
Al: Joe, you really are living in a dream world. Everyone wants a deal today, and insurers are no different. Barring them from our property will never amount to any good.
Joe: You know, it’s guys like you who are the problem in our industry! You’re willing to sell your soul just to get cars in the door. And the rest of us who have the backbone to say, “Yes, you will pay for that,” suffer!
At this, Joe stomped off, leaving Al with the tab. A few minutes later, I heard him come back to the booth and address Al in a hushed tone. What he said shocked me:
Joe: By the way, do you know how I can get on one of those DRPs?
P.S. The above conversation and the two characters are completely made up. Based on what I’ve heard in the industry, I figured this is how one of these conversations might go. Who’s right? You be the judge!
Jason Stahl, Editor
E-mail comments to jstahl@babcox.com