How Can Non-DRP Shops Differentiate Themselves and Survive?

with Mike Anderson

This month, we “Ask Mike” to share his thoughts on how non-DRP shops can succeed in a competitive marketplace. We at Hammer & Dolly hope you find the following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a future issue.

Hammer & Dolly: Taking the politics out of the topic, it’s fair to say there are DRP shops in this industry that would prefer to be independent. Since you work with some shops that have adapted a completely non-DRP model, what insight can you share into how these facilities make it work? How have these shops overcome the fear of losing work by dropping their DRP relationships?

Mike Anderson: The first thing I’ll say is that it’s always been an unwritten rule of thumb that you don’t want more than 30 percent of your business to come from one referral source — whether it’s a DRP, an OEM or a dealership. Never have all your eggs in one basket. If you do have referral sources, use them to build your customer base and then market to those existing customers so that they will use you in the future or refer work to you without a third party having to do that for you. You can use your existing referral agreements to build your customer base for the future. 

If you decide you don’t want to be a DRP anymore for whatever reason, remember what Mike Tyson said about boxing: ‘Everybody has a plan until they get punched in the face.’ A lot of people are willing to live by principle, but very few are willing to die by it. Before you drop someone who provided a big part of your work, you should have some sort of plan to migrate away from them. It’s a lot easier to leave a DRP when you have a lot of cash in the bank, because you can cover your losses and keep your people employed while you market your business in different ways to get business from other sources. If you don’t have a lot of immediate work to replace a DRP, you at least need to have enough cash in the bank to help you make that transition. If you plan to get off a DRP in the future, you need to spend money on marketing. Everybody I know who’s successful as a non-DRP does it. I don’t mean allocating one percent of sales towards it; I mean four to six percent of your gross sales. Your work isn’t just going to fall from the sky, so you need to spend money to make it. 

Of course, not all referral work comes from insurance companies. You can build a relationship with dealerships, independent mechanical shops, fleets or rental car companies. Again, it comes down to marketing. Some shops host open houses for car clubs, do grassroots marketing efforts in their communities and utilize search engine optimization. Can you walk away from DRPs successfully? Yes. I had no DRPs left when I sold my shops, but I also marketed heavily to dealership shops, independent mechanical shops and my community. I didn’t just expect the work to show up. You don’t quit your job until you have another one lined up. That same mindset should be applied to how you walk away from your DRPs. 

H&D: Where do you see social media marketing fitting into the equation? What are the common practices of those shops that appear to be using it effectively?

MA: Social media can be helpful, but marketing should really vary based on your demographics. Billboards may work in some areas but not in others. If you’re located on a major highway, a digital display sign may work. I know of shops in small communities that get a lot of business by sponsoring the school cancellation announcements in winter. I always tell people that nothing beats grassroots marketing. Be involved in your community and make your name known within it. I’m not just talking about sponsoring a baseball team; I’m talking about showing up for special events. When I owned my shops, we’d go to the Art on the Avenue event in Alexandria with a white-painted BMW and invite young people to paint and draw on it. We got involved in as many things as we could, such as hosting open houses for schoolteachers during which we taught them how to change a flat or check their oil. Most importantly, whoever does your online marketing needs to understand your industry. I’ve seen a lot of shops use website companies that put ‘collision’ in their marketing, but a lot of consumers still refer to us as ‘auto body’ shops. You need to work with someone who understands the search terms that consumers use. 

H&D: It seems like a silly point to make in 2025, but shops also need to look welcoming from the road. I can’t tell you how many shops still look like abandoned buildings from the front. 

MA: One hundred percent! If your front office is covered in six inches of dust, that leaves an impression on a customer. The appearance of your interior, exterior and even your employees matter, especially when you want to market your business as one that repairs newer cars. No matter what marketing plan you have, the goal is to make yourself attractive to the customers you want.

Want more? Check out the July 2025 issue of Hammer & Dolly!