Negative Effects of DRP Addictions
In my area, many body shop technicians are latino. By far, most are in the United States legally, have Social Security numbers and pay taxes. Nevertheless, their pay is still quite low in general, and while upward mobility might be a move from floor sweeper to car jockey to helper to body man or painter, it often stops there. A few of these technicians might learn enough English to become an estimator or even occasionally a manager, but those moves are rare. If there is a next step up for most ambitious technicians, it’s when the guy just quits and opens his own shop.
In my area, sadly, the upward-mobility problem particularly affects Latinos, but it’s by no means limited to minority technicians, and I’ve known quite a few conscientious shop owners who did their best to give their employees a leg up. They paid for I-CAR and ASE training. Some even helped with English language lessons. But most of these shops had insurance direct repair relationships, and it wasn’t hard to notice that the pain of restricted profits still trickled down to the technicians in the form of lower pay and pay caps. With insurance programs that demand high parts discounts, reduced labor hourly compensation and many unpaid procedures, the shop owner is left with only minimal profits to pass down.
THE DRP DECLINE SYNDROME
During the past 10 years or so, a few less-restrictive DRP programs have allowed participating shop owners to pay better wages and offer technicians more benefits. For a while, technicians would move up the ladder at one shop and then jump to a better-paying one when their skills could command better pay.
But in recent years, even the more generous DRPs have begun to follow the lead of companies that are determined to squeeze the last penny out of every single job assignment. The result is that the trickle-down pain has spread to more and more shops — and that last bit of job mobility for the technician is beginning to disappear.
This isn’t to say that every shop owner has allowed him or herself to become a captive of this declining-value DRP game. There are still a lot of big players who keep profits up by bringing in work from many other sources. Technicians at these shops are likely to be much happier, and their skill level is also likely to be much higher.
DRP relationships are similar to government welfare programs that provide benefits, but with many strings attached, and, gradually, the provider of the benefits demands more and more. The shop owner who is more like a farmer who accepts some government subsidies but also retains the freedom to solicit business in the free marketplace might use a DRP program to help stabilize workflow. The point here is that the shop owner refuses to become a total addict.
BREAKING THE “DRP DOLE”
The pain of any addiction trickles down to those around. Like breaking any other addiction, the trick is substituting a healthier, nonaddictive life (or work) style. Most businesses don’t depend on one or two powerful sources to bring customers to their door. They have to rely on advertising, sales, promotion, community relations and wide general marketing to bring in sufficient business to thrive.
But this requires time and money — sometimes a lot of money. It’s much easier to make one or two DRP deals that will effortlessly bring in customers.
It’s this lure of ease that causes the shop owner to yield to temptation and enter into a DRP “marriage of convenience.” Like the proverbial gold digger who thinks she has found a sugar daddy or the gigolo who thinks he, too, has found a free ride, the unsuspecting shop owner might believe this benefit has no strings attached. But the strings are there and might be getting tighter all the time. A few who have recognized this have gone “cold turkey” and kicked more than one DRP out the door.
The best part of a normal business flow developed the old fashioned way through marketing and sales is the fact that no one can make an arbitrary decision and yank it all out from under you. And when that business is built on a solid, sustaining workflow, real benefits will also trickle down to the worker, and that worker might well see an upward mobility path long lacking in an addictive DRP structure.
Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.