He continued (and this is the amazing part), "These DRPers want us independent shops to work together with them to fight the big bad Sterling. My response was, 'Lets talk about passing a serious steering law that also includes doing away with all DRP relations with insurers.' Naturally, though, these DRPers don't want to ruin the sweetheart deals they have had with insurers; they only want to protect themselves. Most revealing were their comments that 'the DRPs are getting "tighter and tighter" every day, expecting and receiving more discounts and freebies, and steadily applying more pressure on their 'sweetheart shops' daily."

 

But another independent shop owner in the group stated, "I'm not afraid of Sterling since Allstate has already steered or otherwise stolen all my Allstate customers. I have a better chance of getting an Allstate job away from Sterling than do Allstate's non-Sterling DRP shops." He makes a point that few DRPers have considered, but soon will.

The owner of a prominent Midwest collision shop, heavily dependent on DRP relationships, recently expressed his frustration. Although having been an Allstate DRP for many years, when a Sterling shop opened nearby, Allstate began pulling jobs out of his shop and towing them to Sterling - at the rate of three cars in one week alone. Needless to say, this shop owner was infuriated, shaken by the crass boldness of Allstate to turn on their DRP shops, like this one, who had helped Allstate make record profits by unnaturally holding down the costs of repairs. When you play with fire, you're going to get burned!

Many shop owners are asking where all the DRP-type relationships with insurers are headed? Do independents and DRP shops have any place whatsoever in insurers' future plans? I don't know for sure because I haven't yet figured out if Allstate and other insurers plan on increasing their holdings in insurer-owned shops, or if this was all intended to further establish the "Big Brother is omnipotent!" message. What I do know is that sometime soon shops will have to say, "enough!" and begin conducting business like businesspeople - from a position of strength - rather than like mice.

Many shop owners seem to have forgotten that old truism "Never put all your eggs in one basket." It hasn't occurred to many that the reason insurers want to divide shops among themselves is to cause these shops to become top-heavy in their dependence on them… and thus, very controllable. A shop owner who in his past spent many years as a second-generation insurance agent, once told me, "I learned this 'too many eggs in one basket' lesson years ago in the insurance business, when I had two very large customer-accounts that represented nearly 50% of my volume.

Rather than concentrating on my smaller but more profitable accounts, I catered to the two larger ones, making them both a lot of money by getting them into some very lucrative investments while keeping their insurance costs low. But I lost those two large accounts within six months of each other, due to lack of customer loyalty on their part, when they were able to save a couple bucks elsewhere. They forgot me and all the money I had made them on investments to the lure of saving a few bucks on the insurance I provided them.

My dad taught me one basic principle that has always held water, one I'll never again ignore: "Never forget that insurance companies are 'fair weather friends' - as long as you are making them money they will love you, but the second you don't, they'll dump you like a hot potato." The number of collision repair shops that are now beginning to believe this has grown substantially since Sterling came to town.

Don't be fooled again

I too, once was an Allstate PRO-fool. When I signed on I'd been dealing with insurers for nearly 20 years and knew better than to trust any of them to look after my best interests. But, as I'm sure you did, I figured I could beat the system. Before long I was asking the same questions as you; "Why are they turning on me?… I've done every thing they demanded, seldom openly questioning their dictates." But I finally came to realize that consistent, honest business relations will never result from DRP-"partnerships"… that thorns and thistles will never produce anything but thorns and thistles. And let's be honest - you didn't enter into these relationships with the best of intentions yourself; you and I entered them for one or more of the following reasons.

Insurer-induced fear

First, there's insurer-induced fear that if you didn't sign on DRP programs your competition would. You prickled with pride when informed that you were the lucky shop owner to receive their benevolence. Later, when reality set in, you feared that if you dropped out they'd blackball you. I've been there myself, and have talked with too many shop owners, who turned red and sweaty when I suggested they drop out of their DRPs, to believe any different. Many feel trapped, lacking the confidence to once again enter true free-enterprise marketing.