by Mark Johnson
NACE Online Daily News Contributor
Have you ever wished you had the same information as insurance companies have? Have you ever wanted to know how you measure up to your competitors? Have you ever sought information about how well you're doing on your key performance indicators (KPI) before the insurance company calls you?
The answers to those questions, and a new way of handling direct repair programs (DRP), were the subject of "Successfully Managing Your DRP Relationships," presented by Pete Tagliapietra of NuGen I.T.
What Tagliapietra demonstrated was a method of gathering information about competitors and using that information to get a better handle on your shop's standing with its DPR programs. "We want to create an awareness for the shops on how to measure themselves with each particular program. So instead of being reactive and defensive, we want show how to measure yourselves against an insurance company's KPIs," says Tagliapietra.
Using reporting tools that are available on-line, shops can see how they stack up in comparison to other shops in the area in individual DRP relationships. "Say, for example you have a relationship with a company like AIG, with this method you can not only measure yourself against the KPIs of AIG, but shops will be able to benchmark themselves against other shops that are in AIG's program," says Tagliapietra. "I can find how my metrics stack up against my competition."
That information can be used to track where a shop is performing well and where it is performing poorly in a particular DRP relationship. The information can also help a shop to understand which DRP is bringing them the greatest level of benefit. Shops can act on that information to improve its KPIs and to balance their DRPs to improve their revenues.
"What we want to do is to bring the shops to level of parity with the information insurance companies use to manage performance - and they've never been at that parity before," says Tagliapietra. In the past insurance companies knew everything about a shop, but the shop knew nothing about the insurance company. Giving shops the same information insurance companies have is what "Successfully Managing Your DRP Relationships" is all about, according to Tagliapietra.
The information that Tagliapietra suggests shops use to manage their DRPs, is available in two ways - through shop management system add-ons and through information sources like ADP, CCC and Mitchell.
The shop management enhancement helps shops to see what is affecting their KPIs. "When an insurance company looks at those numbers they see one line. The shop will now be able to go in and say 'We had this Lexus LX 470 here for three months and $35,000 and it hit the books this month, so of course it threw my severity off.' When you take that Lexus out with these tools your real severity was much lower," says Tagliapietra, giving one example of how the systems can help give shops more power in their DRP relationships.
The data on other shops available from the information providers, which Tagliapietra says is now becoming more affordable, is an important tool that shops can use to become more competitive as well as putting them in a stronger position in their dealings with insurers. By being able to measure where you stand on individual KPIs in comparison to other shops in your area you can improve your weak points and you can tell your DRP partners that you are one of the best shops in KPI area "A, B and C," putting you on more equal footing with the insurer.
"Managing your DRPs isn't taking your insurance adjustor to lunch. It's about proving yourself, managing yourself by the numbers, sharing those numbers with your insurance partners and proving that you are a top performer," says Tagliapietra.
Mark Johnson is senior editor for ABRN.