State Farm video tries to address repairer concerns about PartsTrader
May 17, 2012—State Farm Insurance this week distributed a video to its Select Service network shops to address widespread concerns that repairers have with the company’s new electronic parts bidding and ordering program through PartsTrader.
State Farm said it recently completed usability and field-testing of the new program with repairers and their part suppliers, which lead to the development of enhancements within the PartsTrader application. Within the past few weeks, State Farm has initiated pilots of the program in additional U.S. markets—Tucson, Ariz., Birmingham, Ala., Grand Rapids, Mich., and Charlotte, N.C. The company is receiving feedback from both suppliers and members of its Select Service network who are participating.
“We acknowledge the significant change this represents to the repair industry, and frankly, reaction from a few in the industry has not been positive,” George Avery, auto claim consultant—P&C Claims for State Farm, said within the video. “We want you to know that we are committed to working through these changes with our network in a collaborative and constructive way.”
Avery addressed two main areas of concern that have been expressed by repairers using the program.
• Part suppliers: With respect to a shop’s part suppliers, repairers are in full control over who provides parts, regardless of the part type, just like they are today, Avery said.
“We have worked with PartsTrader on a process that is respectful of and enables you to maintain your relationships and negotiated deals with your vendors,” Avery said. “We understand that relationships with your vendors are important in managing your business, much in the same way we value our relationship with you.”
• Part margins: Avery said the PartsTrader application provides repairers with a wide range of capabilities to locate parts and place orders in a flexible and timely process. He said State Farm understands that repairers consider many factors when making part selections for the vehicles being repaired. In addition to price, things such as quality, availability, vehicle type and supplier performance are all important considerations.
The PartsTrader application does not provide State Farm with access to a shop’s buying price or part profit margins, with the exception of recycled parts, Avery said. Repairers can choose the parts they feel are best suited for each individual repair.
“Our company’s reputation was built on fairness and square dealing, and we take issue with the way some in the industry have portrayed our organization. We take pride in knowing that this industry has consistently rated State Farm as a leading insurer to work with year after year,” Avery said. “From the beginning of this effort, we have been focused on creating a more efficient and transparent part procurement process. And we have a responsibility to our policyholders to ensure effective oversight of their premium dollars. We recognize that no effort will succeed if there aren’t ‘wins’ for all involved. A healthy, profitable repair industry is important to State Farm and our mutual customers, who entrust their vehicle to you for quality, safe and efficient repairs everyday.”
Avery said State Farm will continue to provide its Select Service network shops with updates as the company’s work on the PartsTrader program continues. “We look forward to working together to make this a successful effort,” he said.