In 1989 insurers began setting up something now referred to in the industry as "direct repair programs," or DRPs; today insurers writing 70% to 80% of the car insurance in the country have some variation of a DRP. Although they vary by company, state, and even individual insurance office, in general the programs involve setting up relationships with repair shops whose names insurers pass on to customers. It was a formalization of an already existing "good ole boy" network -- the "I'll-send-you-work-if-you-buy-me-baseball-tickets" way of doing business, says Sheila Loftus, who for 20 years has published an industry trade magazine, Hammer and Dolly.
In 1990 Juniper noticed that something funny was afoot: "About once a week I'd get a call from someone who'd say, 'You fixed my car four years ago. I need another repair, but my insurer is telling me to go to one of its recommended shops.' Those are people who I worked hard to make customers for life! And they were being made to feel that they didn't have a choice."
Car owners, in fact, aren't required to go to a shop in the program -- they pay the same deductible no matter where they go -- but the average car owner needs collision-repair services so infrequently that any endorsement carries a lot of weight. DRP shops offer one big advantage: the authority to make an estimate without having to confirm it with the insurer's own adjuster. Ordinarily, insurers and shops negotiate a price for the service on each car, so DRPs mean less time and less hassle for customers.
But insurers didn't embrace the concept just because it would make for faster turnaround time; their incentive also was to make cuts in costs. In return for having more work herded to them, shops make financial concessions: elimination of storage fees, lower prices per worker hour, a commitment to try to use generic parts instead of the more expensive original manufacturers' parts, and even agreements not to do certain cosmetic work. (The agreements run the gamut, and some shop owners say that demands for deep concessions are not universal. Roger Lindeman, who runs an $8-million shop, Roger's Body Shop, in Minneapolis, is a fan of Juniper's but also a defender of alliances with insurers, saying that he's been asked to forgo only storage fees and that his customers, who consistently give the company satisfaction ratings in the 97%-to-99% range, are well served. "Our strategy is to help insurers achieve their goals and ours -- which is to stay in business.")
But in 1991, when Juniper was approached by a number of insurance companies to be in their programs, they'd visit, tell him they liked Three-C, and then ask about price concessions. He told them he couldn't do it: "You can't charge 20% less without taking shortcuts. The consumer would be losing."
He figured that if he gave in, insurance companies would increasingly begin to control the prices he could set, and he'd slowly lose financial autonomy. All around the country, small shops without the cash flow to invest in new equipment were being bought out or quietly shut down, and Juniper believed he probably couldn't survive if he stayed the size he was. But he didn't want to grow the industry's way. "I think he was early to see that DRPs would be the death of the collision-repair industry as we know it," says Hammer and Dolly's Loftus. "He also," she adds, "saw a marketing opportunity."
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Over the next year Juniper's anxiety grew -- as did his anger. Other body shops were silent about what was going on, but he finally figured he'd use his passion as a marketing tool.
Three-C had begun running radio ads in February 1992, using a jingle a local radio-station ad salesman , Tom Hughes, brought to it. The ads were standard increase-the-name-recognition spots, with a singsong tag line: "Three-C Bo-dy Shop, the fi-nest in col-lision repaiiiir . . . " In December 1992 Juniper went on the air in a holiday spot about drunken driving -- it was the first time his voice was heard on the radio. It also was the same month that the lid blew on his tolerance for DRPs.
"He sent me a real rough draft of the commercial he decided to run about it," recalls Hughes, "and it made no sense to me whatsoever -- it was gibberish, a foreign language. Plus he was naming names, things you just get sued up the ying-yang for. The tone, the content -- this was a big change. I said, 'What does this mean?' And he explained what direct repair meant, and I said, 'You can't say this on the radio,' and he said, 'Well, write it so I can.' "
Juniper had built the Three-C name in the marketplace and established a reputation, but people didn't really know what he stood for. The next month, they did.
In January 1993 -- against the recommendations of everyone, including his father, who thought his son was about to commit business hara-kiri -- he went on the air and explained the industry as he saw it. "This is Bob Juniper," he began. "There's a growing problem in the collision-repair industry that seriously affects every vehicle owner in central Ohio. What is it? Quality collision-repair standards are being systematically destroyed by insurance direct repair programs. . . . These programs, which encourage the use of imitation parts, cheap labor, and other concessions, were designed by insurance companies for their own benefit, to keep their costs down, not yours. We have never participated in any of these 'cheapest way possible' programs, and we never will. Why? Because when it comes to repairing your car, we will never compromise the safety and quality of your repairs. After all, you're the customer, not the insurance company. . . . "
Hughes says, "I figured this: If the insurance companies didn't squash him like a bug out of the gate, then they blinked. And if they blinked, we got 'em."
