Welcome
Welcome to the ASA of Arizona Collision Division Blog. This is another forum for Collision Industry Professionals to post comments, ideas, and bring up issues on the industry. The 2008 Collision Workgroup will facilitate this blog and post updates on their activities, check regularly and take part by submitting your comments!
ASA of AZ
602-544-2600
www.asaaz.org
ASA of AZ
602-544-2600
www.asaaz.org
I applaud ASA for promoting the necessity of shops completing the survey. Sadly I have taken a small sampling of shops and I don't think they are listening. It seems to be the old "my vote does not count" mentality plus of course they suspect the election is, like Chicago politics, "rigged". It is the conception of most that the deck is stacked against the shops by St. Farm.
They count the votes and control the voting. Chicago style politics at it's best.
My only suggestion is to send some of our active vendors into the shops and ask them for a copy of what they actually completed on the survey. I think you will find a lot of them have not filled it out. Once State Farm learns you are collecting "copies" of survey's the rates will rise.
About 10 years ago the only way we got St.Farm to move the rates was to have ASU do a separate survey. They did this by phone, fax and personal interviews. It was a "project" for an ASU class and we (ACCA) paid them for their work. My suggestion is to either perform the independent survey or send the vendors to collect the surveys and in some cases they will have to embarras the shops to actually go on line and complete them. Frankly I think the push by vendors might be a quicker solution to the problem.
State Farm is looking at our industry and laughing all the way to the bank. The other insurers are sitting back and enjoying the show while most shops are fighting to survive.
We are in a climate when collision shops are facing the stark reality of losing their businesses because of both the recession and inadequate rates.
While ASA has done a great job of pushing this issue I think we need to get more agressive AND QUICKLY.
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Bob, while I agree with a lot of what you say, what worked 10 years ago will likely not be effective today.
Drp's and work steering were not as prevalent back then. Also, there was really just one rate. Now, many shops have a retail "door" rate and a separate wholesale/prevailing rate. If the ASU survey comes in at a higher rate, what do you do with it then? I don't see that moving the State Farm “prevailing” rate one way or the other.
State Farm employees used to come by each year and ask the survey questions and fill out the form so all the shop had to do was sign it. If the shop surveyed higher than the prevailing rate, they might lose work. That is no longer the case but for whatever the reason, shop owners and managers just don't understand that. Now the surveys are electronic and they have to be initiated by the shop.
And how much of an effect does a little shop even have on the survey results? If large independent and dealership shops have huge repair capacity, isn’t it likely they have more control than might be healthy for the rest of the shops?
What will work over time is education and continually pushing the message - know your cost of doing business and fill out the State Farm survey when that cost changes. As often as necessary. (This is actually better than having one crack a year.) ASA, I think, needs to keep pounding that thought home consistently and teaching owners why it is so important. It may suck that we depend on the survey to obtain necessary increases, however, that is the quickest and most effective tool we have right now.
Long term fixes will probably have to come from legislative action. Associations around the country have had a lot of positive results over the last year.
10 years ago the ACCA did some really good things. ASA can too as long as they can keep increasing membership size and they are persistent in implementing changes.
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Anthony, yes education will work "over time" but we don't really have a lot of time. Our industry can't sit back and wait and if we do we will lose a lot of hard working collision repair people. Of course I think that is the real game plan of State Farm. Thin the herd and control the beasts. Make them beggars who work for crumbs.
You say we did not have as many DRPs 10 years ago but trust me we had plenty of them. The situation has not changed that drastically, only the players and teams are modified.
NEVER think because you may be a small shop that your vote does not count because it DOES. State Farm invented the concept of "prevailing rate". It is flawed but we continue to give it credence. Under their dogma all restaurants are created equal, serve the same food and must charge the same price. According to the Farm Maaco is as good as any high quality, well equipped and well trained facility.
State Farm has manipulated the market so well that the bulk of their work is going to about 50 shops. They qualified because they "work cheap" and not because they focus on the customer, or doing a quality repair. They work fast and cheap. They agree to install used suspension to save State Farm money and put the consumer in harms way. A higher up State Farm boss told me that he felt they only had about 7 shops on their "list" that he would personally take his car into. A recent J.D. Power survey reported that more consumers are happier using the "shop of their choice", than one they were directed to by the insurer.
Bottom line is we need to find a way to get every shop to fill out the survey. You are right that shops need to know their costs but the reality is that the so called "prevailing" rate is a joke. While ASA is doing a really good job of addressing this issue we still need more
boots on the ground kicking the butts of shops to fill out the survey.
Long term solutions are a luxury we can't afford. While I feel the survey will always be "rigged" it represents a chance to improve our plight.
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Bob, We agree more than you may think -both short term and long term sollutions are needed and there is not a lot of time for some shops. The survey does manipulate the market and every shop needs to fill it out but ASA needs to work on better & more permanent solutions also. There should be different pricing structures for shops that provide different levels of work. And we definately need "more boots on the ground".
There are a couple of areas that we could probably debate but for the most part, our issues and what it will take to improve things for collision repairers is very similiar.
Maybe this blog and opinions from those writing on it will educate shops to fill out the survey and get involved. At least that would be a good start.
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YES THE ACCA DID ACCOMPLICE MUCH AND WE ALL AGREED BUT THEN YOU GET THOSE WHO FEEL IT CAN NOT EXIST WITH OUT THEM RUNNING IT THAT IS WHAT HAPPENED IN TUCSON
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It is crazy, in my opinion, that there are qualified shops that do not do the survey. Even George Avery of State Farm has encouraged shops to fill it out.
What has it been - 5 years since the "prevailing" rate changed in the valley? Surely everybody's cost of doing business has changed over that time.
I know there are shops that don't want to recognize the State Farm survey -they would rather that rates stay the same than to give the survey any credibility by filling it out. I have no problem with the system changing to something better - it definately needs to. But it has been this way for too long for it to happen overnight. And I think that there are many shops that are not in a position to go a real long time the way things are today.
Shop owners that think it is better to sit on the sidelines better give that some more thought.
And to those that believe they will lose work if they fill out the survey honestly - ask State Farm and you will find out differently.
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Again I am astonished about how many shop owners or organizations wait on St. Farm to set their rates!!! Wake up would ya!! Who owns your business you or the Insurance companies. Shop owners should charge what is necessary for them to turn a profit based upon their own cost of doing business, not the insurance companies. Prevailing Competitive Rate is an insurance term period.Why are so many willing to keep buying into this?? Stand up for yourselves and protect our industry. Would you as shop owners let me come into your shop and tell you what you were going to charge me?? or what you will not bill me for?? Give me a break here, of course not!! So why do so many of you persist on doing business this way?? Oh, I get it they will send me work!! Wrong, only if you concede further into your pocket!! Oh, they won't steer work from my shop!! Wrong, they will every time they get a chance!! What is the addiction to such abuse,loss of revenue?? Fear is the biggest motivator here!! Why are you so afraid, and of what?? Most of these insurance management people making these rules don't have half of the education or guts that we all have!! SO STAND UP FOR YOURSELVES, ENOUGH IS ENOUGH, PROTECT YOUR LIVELIHOOD, FAMILIES AND MOST OF ALL LETS TURN THE TIDE!!!!!! DO YOU HAVE IT IN YOU??
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Mistakes are a part of business, and we all make them. The reality is that they usually are due to faulty reasoning. If you let your emotions get in the way of making sound business decisions then you will always get what you have always had. I know that sounds cliché, but you need to challenge yourself to think more about the business and less about yourself the "owner." Look from the outside in and see if you would make the same decision. Be your own consultant. You know what to do, so do it.
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We're all colleagues not competitor's it's not a dogee dog world there is enough work for everyone so do what you say and say what you do. Be honest and enjoy life!
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Angel,
I agree with the colleagues statement, but do not agree with the competitor statement. There are way to many shops in this town that are only way to willing to jerk a vehicle from another shop. This is because of the steering mechanism that exists in this state ( which is Illegal by the way). Again the insurance industry has found another avenue to keep the shops from uniting, or at least cooperating with one another so that they can continue their ways. We definitely do what we say and say what we do and would like to see everyone else do the same. Are you a DRP shop?
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Bill,
How many "DRP'S" do you have? And are you still making that same mistake? Faulty reasoning is condoning the way that the insurance industry conducts business, its an uneven balance and a cake and eat it to philosophy.But once you have chosen to dance to that song, sometimes you have no choice? or do you? Emotions are a way of being Bill, that doesn't mean that we should let them overtake reality in the decision making process and I personally do not feel that I have. What I will confess to is the passion that I have to stand up for myself and my business. We as business owners can no longer afford to let this continue. We are constantly educating, challenging ourselves to be better. We are listening to others that have had success in setting a standard. I believe that we take the business and the industry first because without it we would not be a business owner and would probably have to sucumb to being a corporate robot unable to care about anything unless it was written in the corporate manual! I personally have made many bad decisions as many do, including you, but I feel that its necesary to accept the responsibility for those decisions and to learn from them and to better ourselves thru the mistake process. I admit that there are some decisions that I wish I did not make, but nonetheless. I would have been more concerned with myself by not making a decision, or letting others make my choice for me! The Insurance industry is always too happy to recruit individuals that are willing to help them keep the rest of us pinned down.Remember loyalty in this state is a bad word, just ask some of the other ones that danced to the same song. Hope to hear from you again
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Gary, DRP or non-DRP in my opinion is not the issue. It is always easy to point to it on the surface, however, we need to dig a little deeper. This is where it's tough to remove the emotion of what we see everyday. Back to your question, I do have a few DRP's. With regards to your statement about the DRP contract, here are my thoughts about that: The real issue is not the contract, but rather how the contract is deployed and executed within one's business. To me this is more important than the contract itself. If the shop owner believes the vehicle owner is the cornerstone of their business, they will interpret the contract on behalf of the customer. That is a big if, and it requires the shop owner to be truly engaged in their business. It would require them to make decisions according to the benefit of their company, the customer and the vehicle. I believe that shop owners are not viewing these contracts in that manner. They are being looked at as a means to drive cars to the door,and that they do. This faulty reasoning is typically viewed as "marketing replacement" which is one dimensional and leads to loosing site of the customer and the vehicle. Who's fault is this? It's no fault of the contract I can assure you of that. I'm in no way trying to justify a position, I am however stating a fact. The fact is that people are making the decisions that they feel are best for their business without asking the question: What are the consequences? Right or wrong as you stated, what we need to do as an industry is redirect our decision making around the whole: Our business health, customer and vehicle. If we can satisfy the whole, then go for it. At the end of the day business is brutal and we humans have a passion for survival. I appreciate your candidness and I look forward to your continued engagement and input in our industry blog. I wish I had all the answer, but all I come up with are a lot of questions!! E+R = O [Event + Reaction = Outcome] If you have a desired outcome, then your reaction to the events are directly proportional. All the best. LOVE YOUR BUSINESS.
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Bill,
I think that the "DRP" programs are an issue and that, that issue is echoed across the country. The fact is that the participating shops have double standards. What I mean by that is, why would you agree or not charge an insurance company for a procedure or process necessary to complete a repair, but will charge a consumer.? Why are the posted rates in "DRP" shops different than what you would charge an insurance company? I am hearing conflicting answers to these questions so hopefully you can clear them up for me. The fact that being a "DRP" guarantees you business is a direct conflict with the steering law that is in effect in this state, or at least it is supposed to be in effect? So, another question comes up, what do participating shops give the insurance industry for the "Drive" of work to their door? And is that a conflict when it comes to the policy that is sold to the consumer? does it say anywhere in any policy what the "DRP" program is about,or how it could possibly affect the outcome of the repair. I am not implying that you are not repairing vehicles correctly, but I am saying that due to some "DRP" contracts or agreements we all know that concessions are being made and I just wonder at who's expense? the "DRP" shop or the consumer?. This brings to point the issue that we have all been discussing and that is the labor rate and survey. Do the "DRP" shops survey at the posted rate or the negotiated rate?. We all know that the carrot is dangled everyday to the people most likely to conform, I know because again I was there when it happened and believe me to some a promise of work is worth more than a survey!! The decision of some ultimately and unfortunately affects our industry and in this state there is no shortage of the " well if you don't charge, or if you would give us this, or hey, if you wouldn't". I truly understand the brutal business world. What I do not understand is what some will do to help that along and again at who's expense and why when someone is willing to stand up for the right, they are labeled the wrong.I also appreciate your input and thank you.
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I'm excited about this blog and look forward to some candid commentary with regards to collision repair issues in Arizona. A new age of repairers and consumers are fast approaching us and the more we can collaborate about pressing topics the better we'll be equipped to handle the issues. We are all in this together.... Make it a great day and love your business!!!
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THERE ARE MANY SHOPS IN THE VALLEY AND IN THESE TIMES. MOST ARE AFRAID TO SAY ANYTHING BECAUSE THEY REALLY BELIEVE THEY WILL BE CUT OFF FROM WORK AND THEN THERE ARE THOSE WHO SAY THEY WILL AND DON'T BELIEVE YOU ME THEY NEED US MORE THAN WE NEED THEM SOME JUST DON'T GET IT
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Angel, I certainly don't blame shops for being afraid given the tactics used against some of them in the past. However, the fact is that many of them may not have as much to lose these days. Those that are going to make it through these times will need to learn more & run a better business.
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BEING AFRAID IS THE REASON THE VALLEY'S RATE HAS NOT CHANGED AS BOB SAY'S 5 YRS IS TOO LONG
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Angel,
Fear is the motivator and the insurance industry knows it!! The good thing is that there are some of us that are not afraid and are willing to take them on!! Most of the shops that are afraid are the ones that sold themselves out a long time ago.So why don't they use that great relationship they had with the insurance industry to ease their fears?? As long as we have shops that are DRP's helping make industry changes it will never change. We have to stand firm and stay on our toes, education for the customer is everything and if they are properly informed of their policy and their rights pertaining to the policy there is no need to fear anything!!!
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GARY,
I AM A DRP SHOP AND THEY ALL PAY THE PREVAILING RATE IT"S NOT ALL THEIR FAULT WE THE OWNERS ARE AT FAULT BECAUSE WE DON"T STAND UP TO WHAT WE SAY WE DO. THERE ARE A LOT OF SHOP OWNERS WHO SAY ONE THING AND DO THE OPPOSITE ESPECIALLY THE MULTIPLE SHOP OWNERS THAT"S WHY IT WON"T CHANGE
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Angel,
What exactly is "PREVAILING COMPETITIVE RATE"? I am curious is your posted rate the same as what you charge your "DRP"? What makes your concessions any different than the multiple shop owner? The word concession is the key word here. Are you willing to take a vehicle from another shop that has been steered to you by your "DRP"? knowing that steering in the state of Arizona is illegal? Not trying to be critical, just curious!
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the pcr is what we charge our drp"s and this is our posted rate so yes our posted rate is the same as our drp and all repair charges. we give no concessions or discounts to our drp"s so i don"t know what concessions the allstate pro shops are giving but that is one you have to give to to stay on thier program. we"ll take a job from what ever sourse is doing the feferral whether it be a drp,agent,mech.,family,friends,repeat customers etc.,all. we don't take vechciles out of other shops . thatwould be the insurance co. doing this deed i believe this between the ins. co. and the vech. owner. so if they are doing somthing illegal thats between them and the law. were here to perform a service for all of our customers
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As a vendor from the outside, I'm neutral to all commits.
However, I think we are all experiencing some trial times. People are frustrated in all fashions of industry all over the world. Including ours.
Lets ride this out, and prosper in the years to come.
All parties will eventually come to agreement or we will all fail.
I wish all the best.
Happy Holiday's to All!
Shawn Alarcon
Car-O-Liner of Arizona
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colleagues are what professionals use as term when talking about a business like thier own so as a professional and owner i"am proud to be your colleagues
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"Profitability to Preserve Survivability"
Febuary 4, 2009 at 6:30 p.m. at the ASA AZ offices. Have you reserved your seat yet? Don't miss this presentation if you want to maximize the success and longevity of your business. To register and get details visit www.asaaz.org go to the Training Tab and scroll down to training.
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