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ADP Claims Services Group

ADP Claims Services Group . Team. Nikhil Hunshikatti Alarik Wright Robert Niemietz Brian(Fan) Yang Gagandeep Bhatia. Agenda. Recommendations Questionnaire Design Key Findings Appendix. Project Overview. Project Overview.

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ADP Claims Services Group

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  1. ADP Claims Services Group

  2. Team Nikhil Hunshikatti Alarik Wright Robert Niemietz Brian(Fan) Yang Gagandeep Bhatia

  3. Agenda • Recommendations • Questionnaire Design • Key Findings • Appendix • Project Overview

  4. Project Overview • ADP Claims Services Group provides computerized estimating software and services to both insurance carriers and collision repair shops that enable users to complete an online estimate/claim • There are three main providers of computerized estimating software products in the market: • ADP Claims Services Group • Mitchell Repair Information • CCC Information Services Group, Inc. • Mitchell recently has engaged in competitive pricing and other customer take-away tactics to gain market share • CCC is already responding to Mitchell’s threat • ADP CSG is now looking to understand: • Pricing and sales tactics of its competitors • Customers’ response to these tactics

  5. Project Overview • Primary market research was conducted after designing an online survey to be sent to 5,000 collision repair shops nationwide • Survey responses provided the following critical information: • Price-point comparisons • Pricing strategies • Customer take away tactics • Customer’s preferences to contract terms • Specific recommendations on both pricing and marketing strategies were made based on analysis of the data from the on-line survey

  6. Agenda • Project Overview • Questionnaire Design • Key Findings • Appendix • Recommendations

  7. SIZE (>$5MM) Large Collision Repair Shops ADP Shoplink EXPERIENCE Small Collision Repair Shops (None) (10+ years) (<$100K) Recommendations – Target Customers • Identified 2 main groups of target customers, each with unique characteristics: • Large, sophisticated collision repair shops having more experience using computerized estimating software products • Smaller collision repair shops will less experience using estimating products ADP Shoplink is currently positioned between both segments

  8. Recommendations – Target Customers • Smaller collision repair shops • Small size based on reported annual revenues of less than $500,000 • Less experience using computerized estimating software products and fewer employees and users of software products • Higher price sensitivity • More likely to switch brands if offered reduced price • More likely to have product add-ons bundled into flat monthly fee • Less likely to use product add-ons and cite price as the most important reason why not using a particular add-on • Insurance carriers are less important • Have fewer DRP relationships • Willingness to switch based more price and product features • Less brand loyalty • More likely to switch between brands of estimating software products • Prefer flexibility

  9. Recommendations – Target Customers • Larger collision repair shops • Larger annual revenues, usually $1,000,000 to $5,000,000 • More sophisticated • Longer experience in using computerized estimating software products • Usually more employees using those computerized products • Price insensitive • More likely to pay more for same brand of estimating software • More likely to use multiple brands and more product add-ons or optional features • More willing to pay for product add-ons • Fewer have product add-ons or optional features included in monthly fee • Higher brand loyalty because less wiling to switch • Insurance carriers more important • Maintain a larger number of DRP relationships • Willing to switch brands more on the basis of what their insurance carriers recommend than on anything else

  10. Recommendations – Overview • Create and market ADP Shoplink as 2 distinct products: • An integrated product with access to extensive databases for both increased functionality of base product, as well as product add-ons, and enhanced relationships with numerous insurance carriers • A simple, easy-to-use brand of computerized estimating software already bundled with the most popular options and that is as affordable to buy as it is useful in the shop

  11. Recommendations – Smaller Collision Repair Shops • Marketing strategy to small collision repair shops: • Focus on competitive pricing • Reduce monthly fees for ADP Shoplink product • Bundle more common product add-ons into flat monthly fee • Offer shorter contract terms, especially month-to-month contracts • Provide enhanced customer support for new and small users • Assist users having less experience with computerized estimating products • Improve product’s user-friendliness, because ease-of-use and technical support more common complaints for other users of ADP Shoplink • Provide product training for new customers • Advertise extensive product features associated with ADP Shoplink brand • Develop brand loyalty • Market benefits of computerized estimating products directly to these small shops because of low penetration of all three main software brands • Target sales to new customers because smaller shops less likely to use multiple products • Develop loyalty early because willingness to switch brands decreases with increased experience

  12. Recommendations – Larger Collision Repair Shops • Marketing strategy to large collision repair shops • Place less emphasis on competitive pricing • Maintain higher flat monthly fees for increased revenues over long-term • Offer slightly longer contract term lengths, emphasizing 1- and 2-year contracts • Include DRP fees into flat monthly fee • Emphasize product training • Develop larger base of installed users among current collision repair shops by targeting all potential users at individual shops • Increase experience level of all users with ADP Shoplink’s brand of computerized estimating software • Target relationships with insurance carriers • Market product directly to insurance companies to improve DRP relationships • Use insurance carriers to expand customer base because willingness to use a different brand of computerized estimating software is mainly influenced by their recommendations and/or requests • Advertise benefit of using multiple brands to broaden scope with more insurance carriers

  13. Agenda • Project Overview • Recommendations • Key Findings • Appendix • Questionnaire Design

  14. Survey Objectives The main objectives for the on-line survey were to acquire the following information: • Computerized estimating software product currently used • Price of estimating software product • Preferred product features • Number of employees using computerized estimating software • Product add-ons used by the customer • Price of add-ons • Preferred contract term lengths • DRP relationships with insurance carriers

  15. Survey Requirements • Simple and clear questions • Objective responses • Logical order of questions • 20-30 questions • To be taken in 15-20 minutes • Able to sieve out all the required information

  16. Survey Design The survey was divided into the following four sections: • Demographics • Shop location • Number of employees and users • Computerized estimating software products currently used • Pricing • Price of current computerized estimating product • Price of product add-ons • Product add-ons bundled into monthly fee • DRP fees • Attributes/Options • Contract terms – actual vs. preferred • Product options or add-ons used • Preferred product features • Sales Tactics • Approached by competitor and switch offer made • DRP relations with insurers • Reasons to switch brands

  17. Agenda • Project Overview • Recommendations • Questionnaire Design • Appendix • Key Findings

  18. Key Findings • Market share • Customer profiles • Customer satisfaction • Common product add-ons • Contract term lengths • Pricing • Switch offers • Reasons to switch • Summary of key findings

  19. Market Share • Current computerized estimating products • CCC Pathways is market leader • 31.58% use ADP Shoplink • 23.97% use Mitchell brand products (of which 87.80% use UltraMate) • 16.96% use “other” software brands

  20. SIZE CCC Pathways (>$5MM) Mitchell UltraMate ADP Shoplink EXPERIENCE (10+ years) (None) Mitchell FirstEstimate Other (<$100K) Market Share – Positioning • CCC Pathways well positioned to target larger collision repair shops with longer experience using computerized estimating software products • ADP Shoplink is positioned between both large/experienced and smaller/less sophisticated shops

  21. Customer profiles • Length of usage of computerized estimating software • Majority of collision repair shops have extensive experience with computerized estimating software products • ¾ of shops have been using computerized products for 5 years or more • Over 90% of users of 3 main products have used for more than 2 years

  22. Customer Profiles • Size of collision repair shop • Smaller shops more likely to use “other” software brands • 23.08% of shops with annual revenues less than $100,000 • Used by 26.92% of shops with revenues of $100 - $250,000 • CCC Pathways/Mitchell UltraMate are most common computerized estimating software brands used in shops with revenues of $1-5 MM • 55.2% use CCC and 51.5% use Mitchell brands • Only 40% of these larger shops use ADP Shoplink

  23. Customer Profiles • Size of collision repair shop • ADP Shoplink is most commonly used by medium-sized shops • 48% of collision repair shops using ADP have annual revenues of $1-5MM • 72% of shops using ADP have revenues between $250,000 to 5,000,000 • Large collision repair shops use CCC Pathways as the only brand • Mitchell UltraMate most common stand-alone brand for shops with less than $500,000 in annual revenues

  24. SIZE CCC Pathways 76.47% of shops using multiple products (including Mitchell UltraMate) have annual revenues of $1-5,000,000 (>$5MM) Mitchell UltraMate EXPERIENCE ADP Shoplink (10+ years) (None) For shops using only Mitchell UltraMate, 46.67% have annual revenues < $500,000 (<$100K) Customer Profiles • Mitchell UltraMate may already be positioning itself differently to large vs. small collision repair shops • Most common stand-alone product used by small shops with revenues of less than $500,000 • For shops using Mitchell UltraMate and a second brand, over ¾ are collision repair shops with annual revenues in the range of $1 – 5 MM • Only 62.5% of shops using ADP Shoplink and another product are large Mitchell UltraMate

  25. Customer Profiles • Regional distribution • 36.10% of all responding collision repair shops are in the Midwest • 29.10% of all shops are in the Northeast • 72% of shops using ADP Shoplink are in the Midwest and Northeast • Majority of shops in Midwest use Mitchell UltraMate • Collision repair shops using CCC Pathways are more evenly distributed across all 4 regions • Majority are in the Northeast with 34% and Midwest with 25.9% • 20% of shops using CCC Pathways are both the West and Southeast

  26. Customer Profiles • Regional distribution of competitors to ADP CSG • Higher competition in Midwest • Very high penetration with 54% Mitchell UltraMate users located in Midwest • Main threat in Northeast is CCC Pathways • Mitchell UltraMate has minimal installed base of users (only 6%) • Midwest: • Mitchell UltraMate 54% • ADP Shoplink 40% • CCC Pathways 25.9% • Northeast: • CCC Pathways 34% • ADP Shoplink 32% • Southeast: • CCC Pathways 20% • ADP Shoplink 16% • Mitchell UltraMate 15%

  27. Customer Profiles • Some collision repair shops use multiple products • Majority of collision repair shops using either ADP Shoplink or Mitchell UltraMate use multiple estimating software products • CCC Pathways also used by 31.48% of ADP and 33.33% of Mitchell users • 34.5% shops using “other” product also use • Only1-out-of-5 Mitchell FirstEstimate users do not use other products

  28. Customer Profiles • More established collision repair shops are the ones more likely to use multiple brands of computerized estimating products • 97.5% of shops using multiple products have been providing collision repair services for more than 5 years • Only 2.6% of newer shops with less than 5 years of experience use multiple estimating products • Of all shops using only 1 brand 16.7% have been in business for 5 years or less

  29. Customer Profiles • Collision repair shops using multiple products also have more experience with computerized estimating software • 97% of shops using multiple products have been using computerized estimating software for more than 5 years • Almost 90% of shops using one product have been using computerized estimating software for less than 5 years • 31.1% of shops using only one product say they have never before used any computerized estimating product

  30. Customer Profiles • Larger collision repair shops more likely to use multiple computerized estimating software products • 32.6% of shops using one product report annual revenues less than $500,000 vs. only 13.2% of shops using multiple products • While 63% of shops using one product have revenues less than $1,000,000, 63% of shops using more than 1 product have revenues between $1,000,000 and $5,000,000. • Nearly 10-times as many shops using multiple products have revenues in excess of $5,000,000 per year

  31. Customer Satisfaction • Customer satisfaction very high for ADP Shoplink and CCC Pathways users • 89.01% CCC users satisfied • 83.33% ADP users satisfied • Common top reasons of dissatisfaction for users of all brands • Expensive most common #1 reason for all 3 brands • Poor technical support 2nd most identified reason

  32. Customer Satisfaction • Inaccuracy more important reason for dissatisfaction than price • 32.26% identify inaccurate data as main reason unsatisfied • 35.48% unsatisfied because too expensive • Poor technical/customer support not very important • 35.48% respondents say least important reason for dissatisfaction • Overall rankings of reasons for dissatisfaction based on weighted averages (table): • Inaccurate data • Expensive • Product problems • Difficult to use • Poor technical support

  33. Customer Satisfaction • Variability in rankings among users of different brands • Product accuracy and customer service/support more important to shops using ADP Shoplink than price

  34. Common Product Add-Ons • Imaging most common optional feature or product add-on • Used by 73.37% of shops • Other popular add-ons include: • Aftermarket Parts - 67.46% • Salvage Parts – 42.60% • Least common add-ons or optional features include: • Estimate Audit used by only 7.19% of shops • 8.88% use Tire Database • 10.65% do not use any product add-ons or optional features

  35. Common Product Add-Ons • Top most common product features or optional add-ons are the same for users of all 3 computerized estimating software brands

  36. Common Product Add-Ons • Collision repair shops using CCC Pathways software more likely to use product add-ons or optional product features • Nearly 100% of shops using CCC Pathways use product add-ons • Shops using CCC pathways use more product add-ons than those using competing brands of computerized estimating software

  37. Common Product Add-Ons • On average, shops using multiple products also use more product add-ons • Shops using only Mitchell UltraMate more likely to use no add-ons • All shops using only CCC also use at least 1 product add-on

  38. Common Product Add-Ons • There are add-ons which the customers like but do not use currently • Most popular add-ons not currently used include: • Salvage Parts 23.67% • Estimate Audit 21.30% • Frame Dimensions 21.30% • Tire Database 20.21% • Cost is the most important reason for not having these add-ons • 40.80% of shops do not use a product add-on because of its price • 22.50% have other unknown reasons

  39. Common Product Add-Ons • Despite high frequency of use of several different product add-ons, 60.95% of responding shops rank the availability of add-ons as the least important feature • The most important features are: • Easy to use ranked most important by 33.73% • 31.95% rank the products speed and accuracy as most important • Overall rankings for these features based on weighted averages (Table): • Fast and accurate • Easy to use • Customer support • Automated • Training • Availability of product add-ons

  40. Contract Term Lengths - Actual • Majority of contract term lengths for collision repair shops using computerized estimating software products are short • Only 7.78% of shops have term lengths 4 years or more • Most common contract terms are month-to-month and 1-year

  41. Contract Term Lengths - Actual • Approximately ¾ of shops currently have contract terms of 2 years or less, regardless of current brand of estimating software • Majority of ADP Shoplink users or 39.6% have 1-year contract terms • Shops using Mitchell UltraMate more likely to have longer term lengths • Only 14.7% of shops have month-to-month contract terms • 1/3 of shops using Mitchell UltraMate have contract term lengths longer than 2-years

  42. Contract Term Lengths – Preferred • Preferred contract term lengths are much shorter than shops currently have regardless of estimating software brand • The vast majority of shops prefer shorter contract terms • 94.08% prefer contracts terms of 2 years or less • 42.01% want month-to-month contracts • 40.83% prefer annual contract term lengths

  43. Contract Term Lengths - Preferred • Shops using CCC Pathways show least variability in actual from preferred contract term lengths • Mitchell UltraMate users show largest variability • 27% more shops prefer month-to-month contracts than currently have • 24% more shops currently have term lengths in excess of 3 years than would prefer • ADP Shoplink users have largest deviation in actual from preferred month-to-month term lengths • Difference between shops having month-to-month contracts vs. those preferring same length is 28.3%

  44. Contract Term Lengths – Preferred • Shops using multiple products more likely to prefer longer contract terms • No shop using only 1 product, regardless of brand, prefers contract terms of more than 3 years • Shops using only ADP Shoplink more likely to prefer month-to-month terms

  45. Contract Term Lengths - Preferred • Users of various computerized estimating software products cite different reasons why prefer particular contract term length • Shops using Mitchell UltraMate more likely to prefer the flexibility of changing products • Mitchell UltraMate users less likely to prefer to remain with one product Reason Prefer Contract Term Length

  46. Contract Term Lengths – Preferred • Relative importance of reasons for preferring particular contract term length are the same for shops using 1 product vs. those using multiple products • Shops using only 1 brand of estimating software more likely to chose contract term based on price • Brand loyalty much less for shops using multiple products • Only 25.8% of shops using CCC Pathways and another product would prefer to say with one product vs. 42.6% of shops using only CCC • Same ratio for shops using ADP Shoplink is 29.2% vs. 37.93% • Mitchell UltraMate users even more likely to switch if only using that product

  47. Pricing – Contract Term Lengths • Price for contract lengths • 80% of shops using Mitchell UltraMate pay less than $400 • 44.4% of ADP Shoplink users pay less than $400 for similar contract term lengths • Only 26.10% of shops using CCC Pathways pay less than $400 for their contracts • But only 12.1% of collision repair shops using Mitchell UltraMate also have a monthly contract by paying less than $400 • For ADP and CCC, only 7.7% and 6.7%, respectively, get monthly contract terms for less than $400

  48. Pricing – Current Monthly Fees • Shops using multiple products more likely to pay higher average monthly fees • 38.9% of shops using Mitchell UltraMate and a 2nd product pay $450 or more per month vs. 0% of shops using only Mitchell UltraMate • Only 11.1% of shops using Mitchell plus another product pay less than $260 while 3-times as many using only Mitchell UltraMate do • 60% of shops using ADP Shoplink and something else pay more than $400 vs. just 39.3% of shops only using ADP

  49. Pricing – Product Add-Ons Included In Monthly Fees • Shops using multiple computerized estimating software products have fewer add-ons included in monthly fees

  50. Pricing – Product Add-Ons • For add-ons not included, ADP Shoplink users pay higher average monthly fees on per transaction basis • Average monthly fee for shops using ADP Shoplink and Imaging add-on is $137.8 • Compared to $65.8 per month for Mitchell UltraMate users and $109.24 per month for shops using CCC Pathways • ADP Shoplink users pay more per month for Salvage Parts product add-ons • Average fee is $97.5 per month • Shops using either Mitchell UltraMate or CCC Pathways pay only ½ that amount • Mitchell UltraMate costs an average of $43.75 per month • CCC Pathways users pay, on average, $53 per month

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