DRPs are not new, they're probably here to stay for quite awhile (never say never), and variations of DRPs are even entering states that have forbidden these relationships within current laws.
In the March 2007 issue of ABRN, I will provide an article about the pros and cons of direct repair programs (DRPs), which will certainly cause different views and beliefs to come forward. The reality is, these programs are not new, they're probably here to stay for quite awhile (never say never), and variations of DRPs are even entering states that have forbidden these relationships within current laws.
This topic brings the most polarized opinions to the surface. Those in the programs are somewhat happy due to the alternative of not having any work to perform each week, but struggle to keep up with the requirements and maintain consistency. On the other end of the spectrum are those who claim DRPs are illegal and just plain evil.
Then there are those who are not in programs, but want to be. They claim some type of global conspiracy is involved. Based on several interviews with shops that did not make the first cut in State Farm's recent Select Service program implementations, I wonder if acceptance was performance-based or just personal decisions by some who have been given too much power to decide.
With the availability to get global information through the Internet these days, it doesn't take much insight to realize that North Americans aren't the only ones experiencing DRP pains. Many other countries have already gone through these trends, some are going through them right now, and some will be in the near future. We also are not the only industry faced with additional changes. Many industries before us have gone through similar issues, and will face more in the future.
The question I often wonder is: What have we done in the past to strengthen our industry, market area or individual businesses, and how have we anticipated and prepared for these changes? What have we done to assist others within our industry in growing and preparing for the anticipated changes that have occurred, are occurring and will continue to occur?
Unfortunately, we've done very little, because we usually act stubbornly independent most of the time we're around our peers. Yes, we are competitors, but look at what these attitudes have gotten us into! Have we been actively involved with our trade associations to at least possibly shape some of the changes taking place within each state? Or do we sit in the background and do nothing, while taking advantage of association gains and claiming foul when we disagree?
State and national associations are organizations we should all support and be involved in, or we have no right to complain how bad the industry has gotten. For instance, in Montana state law ensures that any shop that can meet the criteria of the DRP agreement must be allowed to participate in it. Indiana has a bill that requires the vehicle owner to select if aftermarket or used parts can be used on their vehicle (first-party claims). In Massachusetts and Virginia, it is required to physically inspect the vehicle, so desk review audits are not allowed. These are only a few examples of how state and national associations work for all of us, but still need our support and active involvement.
Recently I received a set of interesting e-mails from a very opinionated shop owner that truly believes they have a right for business to automatically come in their door every day, and all of their problems are related to the insurance industry. First, the idea that "if we build it, they will come" was simply a line from a movie called Field of Dreams and not the reality for any business. Every day, as owners, we need to work on the business or there won't be anything to do in the future.
We also must be prepared technically for what is here and what is to come. Are we prepared to fix the new advanced steels that are here, or do we and our estimators and technicians believe we can figure it out when needed? If this is the case, we are already too late. Have we updated our equipment to handle the technology changes that are here for the new metals, paints and electronics? These are critical for our future, but most have no idea what is happening outside the four walls of their business. I'm sure some believe they can just repair the older models (four to six years in service) and get by without upgrading. In case they haven't noticed, these vehicles are totaling at an alarming rate.
Vehicle owners certainly seem to have made their decisions of what they like and want. The insurers are certainly moving toward their initiatives to drive value for their stockholders. What are we doing? Since these industry trends are benefiting the vehicle owner and insurer, how do we find a way to benefit as repairers as well? There are too many market forces entering into this trend that do not retard the increasing shift in collision repair dollars going to fewer and fewer shops to not realize this trend is not close to a conclusion.
The key appears to be changing and adapting when necessary, but don't stop fighting for what you believe in. As country singer Kenny Rogers once said, "You've got to know when to hold 'em, know when to fold 'em." Otherwise, what happened to the dinosaurs may be in our future as well.
I realize many who read this column have already made changes to their businesses that will place them in a better position than their competitors. That is great, but never forget that changes will always continue. The game tomorrow will certainly be different than the game today.
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