There's little doubt that much of the growth some collision repair businesses have experienced over the past decade has been fueled by insurer direct repair programs (DRPs). After all, the percentage of insurance-paid work handled through DRPs quadrupled - to more than 30 percent - between 1996 and 2002. Most major insurers are already well over that 30 percent mark - with some at 70 percent or more. 

But what about those shops not participating in DRPs - or those that wish to become less dependent on them? Given DRP trends, these businesses will need to find creative ways to keep a steady supply of customers coming to their door.

Develop relationships with dealerships

Sturken

Steve Sturken, the second-generation owner of Sturken's Auto Body in San Jose, California, said his 30-employee company does little direct repair work, preferring to focus on referrals from several dealerships.

"DRPs are a model that works for a lot of people," Sturken said. "Most large shops are successful because of that model. But you have to know how much control of your business you want to have, and how much you're willing to give away. I like to control my own destiny."

As with DRPs, Sturken said, focusing on dealership referrals is still risky if too much of your business - 20 or 30 percent, for example - is coming from any one source.

"Don't put too many eggs in one basket," Sturken advises. "If you do and something goes wrong, will you be able to afford to recover?"

It's a situation Sturken faced not with an insurer that suddenly dropped his shop from its DRP, but from a dealership that made a change.

"I was doing a substantial amount of work with them and they made a change for no good reason, just like people do, and it kicked me in the teeth," Sturken said. "It wasn't exactly losing my whole business, but it was a radical wake-up call."

Sturken recovered from the change, and has worked to avoid becoming too reliant on any one particular source of work. But with only 40 percent of dealerships having body shops, there are plenty looking for shops to which they can refer their customers.

Develop fleet accounts

Baskerville

Dee and Wiesje Baskerville say that while working on fleets of company-owned vehicles isn't always ideal work, it has helped bring a new source of revenue to their shop's door. And while some fleet managers focus mainly on price, others - such as delivery services - may be more interested in quick-turnaround and are willing to pay a premium for it.

The Baskervilles, owners of Auto Hound Collision Center in Seattle, Washington, said they got their initial fleet work by participating in PPG's CertifiedFirst program. Through that program, they now repair vehicles for a national fleet account of company cars used primarily by pharmaceutical representatives in the area. The work has its downsides - the fleet management company requires several approvals throughout the process and can have multiple people overseeing a claim leading to duplicate phone calls to the shop - but there are upsides as well.

"If you take care of them, those customers tend to refer their friends or spouse because you did such a good job on their company vehicle," Dee said. "It's not a large percentage of our work right now, but it has added a certain amount of revenue," Wiesje said. "And it could end up being more because of the growth of the biotech companies in this area. It was one of the major reasons for us staying with PPG and the paint jobber that we are with; they were bringing revenue to the door instead of just taking it out."

Diversify your business

Offering a wider range of services has helped some non-DRP shops improve their sales and profits. Some shops have added a fleet of rental cars that can also be used as free loaner cars when necessary to "sell" a job. Others offer mobile estimating or pick- up and delivery of vehicles. Offering towing services or mechanical repairs can also bring in more work.

"Mechanical repairs are a natural complement to collision repair," says Dick Strom, owner of Modern Collision Rebuild in Bainbridge Island, Washington. "With today's hurried pace, providing one-stop-shopping offers the opportunity to 'up-sell' mechanical and collision repair work. We give everyone who walks through our door, a simple but eye-catching single-page flier we designed that specifies all the services we provide. By taking a moment to explain this flier, we've increased our gross and net profit substantially."

Offering mechanical repair can help attract fleet work or help keep a shop busy even during "slow seasons" when there is less collision repair work.