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:1. ADP Claims Services Group2. Mitchell Repair Information 3. 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

Recommendations – Target Customers

Identified 2 main groups of target customers, each with unique characteristics:1. Large, sophisticated collision repair shops having more experience using

computerized estimating software products2. Smaller collision repair shops will less experience using estimating products

SIZE

EXPERIENCE

Large CollisionRepair Shops

Small CollisionRepair Shops

(>$5MM)

(<$100K)

(None) (10+ years)

ADP Shoplink

ADP Shoplink is currently positioned between both segments

8


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


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:

1. 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

2. 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:1. Demographics

• Shop location• Number of employees and users• Computerized estimating software products currently used

2. Pricing• Price of current computerized estimating product• Price of product add-ons• Product add-ons bundled into monthly fee• DRP fees

3. Attributes/Options• Contract terms – actual vs. preferred• Product options or add-ons used• Preferred product features

4. 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

53.2%

16.9% 31.6%

21.1%

2.9%

ADP Shoplink

Mitchell FirstEstimate

Mitchell UltraMate

CCC Pathways

Other

20

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

SIZE

EXPERIENCEADP

Shoplink

MitchellUltraMate

CCC Pathways

OtherMitchell FirstEstimate

(>$5MM)

(<$100K)

(10+ years)

(None)

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

0%

20%

40%

60%

80%

100%

ADPShoplink

CCCPathways

MitchellUltraMate

10 Years or More

5-10 Years

2-5 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

0%

10%

20%

30%

40%

50%

60%

<100 100-250 250-500 500-750 750-1000 1000-5000

Collision Repair Shop Annual Revenue ($ 000s)

IndustryAverage

ADPShoplink

MitchellUltraMate

CCCPathways

Other

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

0%

10%

20%

30%

40%

50%

0-500 500-1000 1000-5000

Annual Revenues ($ 000s)

ADP ShoplinkMitchell UltraMateCCC Pathways

24

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

MitchellUltraMate

SIZE

EXPERIENCEADP

Shoplink

MitchellUltraMate

CCC Pathways

(>$5MM)

(<$100K)

(10+ years)

(None)

76.47% of shops using multiple products (including Mitchell

UltraMate) have annual revenues of $1-5,000,000

For shops using only Mitchell UltraMate,

46.67% have annual revenues < $500,000

25

Customer Profiles

0%

10%

20%

30%

40%

50%

60%

Mid

wes

t

No

rth

east

So

uth

east

Wes

t

ADP Shoplink

MitchellUltraMate

CCC Pathways

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 SoutheastRegional Distribution

29.10%

19.60%36.10%

15.20%

`

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:

1. Mitchell UltraMate 54%

2. ADP Shoplink 40%

3. CCC Pathways 25.9%

Northeast:

1. CCC Pathways 34%

2. ADP Shoplink 32%

Southeast:

1. CCC Pathways 20%

2. ADP Shoplink 16%

3. 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

Software Brand Total # Users # Using 2nd Brand

% Using NO Other Brands

ADP Shoplink 54 29 46.30

CCC Pathways 91 36 60.44

Mitchell FirstEstimate

5 4 20.00

Mitchell UltraMate

36 21 41.67

Other 29 10 65.50

28

Customer Profiles

How Long Shops Using Single Product Providing Collision Repair Services

16.7%

12.8%

70.5%

1-5 years

5-10 years

10+ years

How Long Shops Using Multiple Products Providing Collision Repair Services

84.2%

2.6%

13.2%

1-5 years

5-10 years

10+ years

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

Length of Experience Using Computerized Estimating Software

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Users ofOne

Product

Users ofMultiple

Products

10+ Years

5-10 Years

1-5 Years

Never Use

30

Customer Profiles

0% 50% 100%

0-500

500-1000

1000-5000

5000+

An

nu

al R

ev

en

ue

(in

$0

00

s)

MultipleProduct Users

SingleProduct Users

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

0%

20%

40%

60%

80%

100%

Satisfaction

ADPShoplink

MitchellUltraMate

CCCPathways

0%

10%

20%

30%

40%

50%

60%

Pro

du

ct

Pro

ble

ms

Ina

cc

ura

ted

ata

Dif

fic

ult

to

us

e

Po

or

su

pp

ort

Ex

pe

ns

ive

32


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):

1. Inaccurate data

2. Expensive

3. Product problems

4. Difficult to use

5. Poor technical support

33


Variability in rankings among users of different brands– Product accuracy and customer service/support more important to

shops using ADP Shoplink than price

Rank ADP Shoplink CCC Pathways Mitchell UltraMate

1 Difficult to use (3) Difficult to use (4) Difficult to use (6.2)

2 Poor technical support (4.8)

Expensive (5.6) Poor technical support (6.4)

3 Inaccurate data (5) Poor technical support (5.8)

Expensive (8.4)

4 Expensive (6.6) Inaccurate data (6.4) Product functionality problems (8.4)

5 Product functionality problems (7.6)

Product functionality problems (7.8)

Inaccurate data (9.6)

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


Top most common product features or optional add-ons are the same for users of all 3 computerized estimating software brands

Product Features or Optional Add-ons

Product Brand

Imaging Aftermarket Parts

Salvage Parts

Frame Dimensions

ADP Shoplink

34.11% 24.03% 17.83% 12.40%

CCC Pathways

28.52% 28.17% 17.25% 12.35%

Mitchell UltraMate

29.21% 19.10% 13.48% 14.81%

36


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

Product Brand Using Product Add-ons

(% of shops)

Average Number of Product Add-ons

(# per shop)

ADP Shoplink 97.7 2.43

CCC Pathways 99.6 3.12

Mitchell UltraMate 92.1 2.47

37


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

0% 20% 40% 60% 80% 100%

Imaging

Aftermarket parts

Salvage parts

Frame dimensions

Dent repair

Tire database

Estimate audit

None

Users of Mult Product

Users of One Product

CCC Pathways

Mitchell UltraMate

ADP Shoplink

38


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 reasons6.50%

40.80%

11.80%

22.50%

18.30%

Planning to buy it

Cost

Not available withcurrent product

Other

None. I do not like orwant

39


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):

1. Fast and accurate

2. Easy to use

3. Customer support

4. Automated

5. Training

6. 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

32.02%23.03%

15.73%

2.24%5.62%

21.34% Month-to-Month

1-year

2-years

3-years

4-years

5-years

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

0%

20%

40%

60%

80%

100%

ADPShoplink

MitchellUltraMate

CCCPathways

3-years or more

2-years

1-year

Month-to-Month

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

0%

20%

40%

60%

80%

100%

ADPShoplink

MitchellUltraMate

CCCPathways

3-years or more

2-years

1-year

Month-to-month

43

Contract Term Lengths - Preferred

-30

-20

-10

0

10

20

30

Month-to-

Month

1-year 2-years 3-yearsor

more

Diff

eren

ce B

etw

een

Act

ual

an

d P

refe

rred

Co

ntr

act T

erm

L

eng

th (%

)

ADPShoplink

MitchellUltraMate

CCCPathways

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


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

Preferred Contract Term For Single Product Users

0%20%40%60%80%

100%

AD

PS

ho

pli

nk

Mit

chel

lU

ltra

Mat

e

CC

CP

ath

way

s

3-years ormore

2-years

1-year

Month-to-month

Preferred Contract Term For Users of Multiple Products

0%

20%

40%

60%

80%

100%

ADPShoplink

MitchellUltraMate

CCCPathways

3-years ormore

2-years

1-year

Month-to-month

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

0%

10%

20%

30%

40%

50%

60%

70%

Ch

ea

pe

r

Sta

y w

ith

pro

du

ct

Try

ne

wp

rod

uc

ts

Fle

xib

ility

to

ch

an

ge

Re

qu

ire

me

nts

ch

an

ge

ADPShoplink

MitchellUltraMate

CCCPathways

Reason Prefer Contract Term Length

46


Why Users of Multiple Products Prefer Particular Contract Term Length

0% 50% 100%

Cheaper

Stay withProduct

Try NewProduct

Flexibility toChange

RequirementsChange

CCC Pathways

MitchellUltraMate

ADP Shoplink

Why Users of Single Product Prefer Paritcular Contract term Length

0% 20% 40% 60% 80%

Cheaper

Stay withProduct

Try NewProduct

Flexibility toChange

RequirementsChange

CCCPathways

MitchellUltraMate

ADPShoplink

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

0%5%

10%15%20%25%30%

$0-260 $261-400 $400+

ADP Shoplink

monthly 1-2 yrs 2+

0%

5%

10%

15%

20%

$0-260 $261-400 $400+

Mitchell Ultramate

0%

5%

10%

15%

20%

25%

30%

$0-260 $261-400 $400+

CCC Pathways

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

Current Monthly Price for Users of One Product

0% 10% 20% 30% 40% 50%

<170

171-230

231-260

261-300

301-350

351-400

401-450

451+CCCPathways

MitchellUltraMate

ADPShoplink

Current Monthly Price for Users of Multiple Products

0% 10% 20% 30% 40% 50%

<170

171-230

231-260

261-300

301-350

351-400

401-450

451+

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

Percent of Multiple Product Users With Add-Ons Included in Monthly Fee

0%

20%

40%

60%

80%

100%

Imag

ing

Afte

rmar

ket

parts

Sal

vage

parts

Fram

edi

men

sion

s

Den

t rep

air

Tire

data

base

Est

imat

eau

dit

ADP Shoplink Mitchell UltraMate CCC Pathways

Percent of Add-Ons Included in Monghtly Fee for Single Product Users

0%10%20%30%40%50%60%70%80%90%

100%

Imag

ing

Aft

erm

arke

tp

arts

Sal

vag

ep

arts

Fra

me

dim

ensi

on

s

Den

t re

pai

r

Tir

ed

atab

ase

Est

imat

eau

dit

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

51

Pricing – DRP Fees

0%20%40%60%80%

100%

<45 46-55

56-65

66-75

76-85

86-95

95+

DRP Fees for Users of Single Product

ADP Shoplink Mitchell UltraMate CCC Pathways

0%

20%

40%

60%

80%

<45 46-55

56-65

66-75

76-85

86-95

95+

DRP Fees for Users of Multiple Products

Distribution of DRP fees similar for shops using multiple products vs. single products, regardless of main brand of computerized estimating software used

Over 2/3 of all shops pay less than $45 in DRP fees

52

Switch Offers

Approximately ½ of collision repair shops have been approached by a competing software provider– 54.76% have been approached

– The most common switch offers include:• 44.09% of shops say they were approached with an offer not listed in as

one of the possible choices• 35.48% of shops were approached with lower monthly payments for

similar estimating software solutions

– Product bundling and discounts are not common offers• Only 16.3% of shops were approached with an offer matching current

monthly fee and including optional product add-ons• 10.75% of offers included matching monthly payments and offered free or

reduced fee DRP communication

53

Switch Offers

Over ½ of shops approached by competing software providers were made “other” offer not identified in the survey

44.57% Other

10.87% Reduced DRP fee

16.30% Add-ons included

35.87% Lower monthly

payments

16.30% Limited free usage

7.61% Buyout of contract

44.64% Not Approached

54

Switch Offers

Collision repair shops using ADP Shoplink more likely to be made offers on reduced prices– 18.42% offered free usage with reduced price thereafter

0%

5%

10%

15%

20%

25%

30%

35%

Oth

er

Red

uce

dm

on

thly

pay

men

ts

Ad

d-o

ns

incl

ud

ed

Red

uce

dD

RP

fees

Lim

ited

free

usa

ge

Co

ntr

act

bu

you

t

ADP Shoplink

Mitchell UltraMate

CCC Pathways

Switch Offer

55

Reasons to Switch – Unwilling Customers

Current Estimating Software Product– Brand Loyalty

– Nearly ¼ of shops currently using any of the three main computerized estimating software products unwilling to switch

0%

10%

20%

30%

40%

50%

60%

70%

Approached Not Switch

ADP Shoplink

Mitchell UltraMate

CCC Pathways

56

Reasons To Switch – Unwilling Customers

Experience– Older shops less willing to switch estimating software providers– Shops with more experience using computerized estimating software

less willing to switch products

0%

5%

10%

15%

20%

25%

30%

35%

5 years orless

5-10 years 10 yearsor more

How Long ProvideCollision RepairService

How Long UseComputerizedEstimating Software

57


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0-500 500-1000 1000-5000

Annual Revenue ($ 000s)

Pe

rce

nt

of

Sh

op

s N

OT

Will

ing

to

S

wit

ch

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1 to 5 5 to 10 10 or more

# of EmployeesP

erc

en

t o

f S

ho

ps

NO

T W

illin

g t

o

Sw

itc

h Shop Size

– Shops with more employees less willing to switch computerized estimating software

– Shops with larger annual revenues also less willing to switch products

58

Reasons to Switch – Unwilling Customers

Long-term contracts– Collision repair shops who prefer longer term contracts may be less

willing to switch estimating software products

Month-to-Month

1-year 2-years 3-years 5-years

Percent Unwilling to Switch

19.72% 24.64% 36.84% 37.5% 50%

Preferred Contract Term Length

59


DRP Relationships– Shops having a larger number of

DRP relationships with insurance carriers are less likely to switch products

– Shops encouraged by a larger number of insurance carriers to use a particular brand even more unwilling to switch

0%

5%

10%

15%

20%

25%

30%

35%

Sh

op

s U

nw

illin

g t

o

Sw

itc

h

# of DRP Relationships

# of Insurance Carriers Recommending Particular Brand

60

Reasons To Switch – Most Common

Current Estimating Software Product– All users more likely to switch based on recommendation of

insurance carriers

– Price only 2nd most common reason for all 3 main brands

– Desirable contract length not important in causing shops to switch

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Ins

ura

nc

eC

arr

ier

Re

qu

es

ts

Co

ntr

ac

tL

en

gth

Pri

ce

Pro

du

ct

Fe

atu

res

Cu

sto

me

rS

up

po

rt

ADP Shoplink

Mitchell UltraMate

CCC Pathways

61


Length of Service

0% 10% 20% 30% 40% 50%

Insurance Requests

Contract Length

Price

Product Features

Customer Support 10yearsormore5-10years

5yearsorlessLength of Using Computerized Products

0% 10% 20% 30% 40% 50%

Insurance Requests

Contract Length

Price

Product Features

Customer Support10yearsormore5-10years

5yearsorless

Experience– Length of service in

providing collision repair• Insurance carrier

recommendations more important to older shops

• Younger shops much more attracted to price and specific product features

– Length of time in using computerized estimating software

• Less experienced shops also target products with specific features

• Almost 50% of shops with 10 or more years of experience would switch based on the request of an insurance carrier

62


Customer Satisfaction– 75% of all satisfied customers would switch because either the insurance

carrier would request a particular brand or they were offered a better price

– Only 2% of responding collision repair shops would switch based on contract length

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Insura

nce

Carr

ier

Requests

Price

Pro

duct

Featu

res

Custo

mer

Support

Contr

act

Length

Reasons To Switch

Pe

rce

nta

ge

of

Sh

op

s W

illin

g t

o

Sw

itc

h

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cu

mu

lati

ve

Fre

qu

en

cy

of

Sh

op

s

Willin

g t

o S

wit

ch

63


0%

10%

20%

30%

40%

50%

60%

70%

Insu

ran

ceR

equ

ests

Co

ntr

act

Len

gth

Pri

ce

Pro

du

ctF

eatu

res

Cu

sto

mer

Su

pp

ort

Shop Size in Terms of Annual Revenues ($ 000s)

0-500

500-1000

1000-5000

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Insu

ran

ceR

equ

ests

Co

ntr

act

Len

gth

Pri

ce

Pro

du

ctF

eatu

res

Cu

sto

mer

Su

pp

ort

Shop Size in Terms of # Employees

1-5 Employees

5-10 Employees

10 or moreEmployees

Shop Size– Shops with greater annual revenues primarily concerned with what

products are recommended by insurance carriers

– Larger shops more willing to switch based on insurance carrier requests

– Product features only important to smaller shops

64

Reasons To Switch – Importance of Insurance Carriers

0

0.2

0.4

0.6

0.8

0 1 to 2 3 to 4 5 or more

Number of DRP Relationships

ADP Shoplink Mitchell UltraMate

CCC Mitchell Users of One Product

Users of Mult Products

0%

10%20%30%

40%50%60%

0 1 to 2 3 to 4 5 or more

Number of Insurance Carriers Requesting Particular Brand

Shops using Mitchell UltraMate less likely to maintain DRP relationships– 31.6% using only Mitchell have 0 DRPs

– Also report fewer insurance carriers encouraging them to purchase a particular brand of computerized estimating software

Users of multiple products maintain more DRP relationships– 63.2% of shops using >1 product have 5

or more DRP relationships

– Only 25% of shops, on average, using 1 product have 5 or more DRPs

CCC Pathways users have more DRPs– 47% of shops using only CCC brand have

5 or more DRPs

– Only 16.4% of shops using only CCC Pathways have 0 DRP relationships

65

Reasons To Switch – Importance Of Insurance Carriers

Influence of insurance carriers– Requests for specific brand

more important to large shops• 60.9% with annual revenues

of $1-5MM• 64.1% with 5 or more DRPs• 50% with 10 or more years of

experience

– Smaller shops more price sensitive

• 34.2% with revenues <$500K and 57.1% with revenues between $500-1000K

• 43.8% with No DRPs and 37.5% with 1-4 DRPs

• 29% with <5 years experience

0% 20% 40% 60% 80%

$0-500

$500-1000

$1000-5000

0

1 to 4

5 or more

<5 years

5-10 years

10 or more years

month-to-month

1-year

2-years or more

% of Customers Willing to Switch

Price

InsuranceCarrierRequests

Annual Revenue

(000s)

# of DRPs

Length of Use

Preferred Term

66

Summary of Key Findings

Use >1 Estimating Software Product

Willing to Switch Products

# of DRP Relationships:

Legend:Limited (0-25%)

Low (25-50%)

Medium (50-75%)

High (75-100%)

ADP Shoplink

Mitchell UltraMate

CCC Pathways

Satisfied with Current Product

None

5 or more

Main Estimating Software Product for Responding Collision Repair Shop

67

Summary of Key Findings

Preferred Contract Length:

Legend:Limited (0-25%)

Low (25-50%)

Medium (50-75%)

High (75-100%)

ADP Shoplink

Mitchell UltraMate

CCC Pathways

Annual Revenues (000s):

1-year

Month-to-month

Main Estimating Software Product for Responding Collision Repair Shop

<$500

$1000 - 5000

$500-1000

68

Agenda

Project Overview Recommendations Questionnaire Design Key Findings Appendix

Calculations for Weighted Average Rankings

70

Matrix – Users of Multiple Estimating Software Products

2nd Estimating Software Product

Primary Software Product

ADP Shoplink

Mitchell UltraMate

CCC Pathways

Other Total # Users

ADP Shoplink

7 17 3 53

Mitchell UltraMate

7 12 1 36

CCC Pathways

17 12 6 91

71

Rankings Estimation – Reasons for Dissatisfaction

Rank Product Problems

Inaccurate Data

Difficult to Use

Poor Technical Support

Expensive

1 4 10 2 4 11

2 4 5 9 6 7

3 12 10 4 1 4

4 9 3 7 9 3

5 2 3 9 11 6

Weighted Average

18.8 15.4 21 22 15.8

Overall Rank

3 1 4 5 2

Return

72

Rankings Estimation – Importance of Product Features

Rank Easy to use

Fast and accurate

Automated Product add-ons

Customer Support

Training

1 57 54 24 5 24 5

2 37 55 26 2 30 19

3 37 24 40 7 43 18

4 16 21 38 17 42 35

5 15 11 31 35 24 53

6 7 4 10 103 6 39

Weighted Average

70.5 66.5 98.8 148.5 89.5 122.7

Overall Rank

2 1 4 6 3 5

Return

ADP Claims Services Group - Online Questionnaire

74

Demographics

1. How long has your shop been providing collision repair services?a. Less than 1 yearb. 1 to 2 yearsc. 2 to 5 yearsd. 5 to 10 yearse. More than 10 years

2. How long has your shop been using computerized estimating products?a. Less than 1 yearb. 1 to 2 yearsc. 2 to 5 yearsd. 5 to 10 yearse. More than 10 yearsf. Never. Do not use computerized estimating product.

3. Which computerized estimating software product(s) do you use? You may select more than one item.a. ADP Shoplinkb. Mitchell FirstEstimatec. Mitchell UltraMated. CCC Pathwayse. Other

4. Are you satisfied with your current estimating software product(s)?a. Yesb. No

75

Pricing

4a. Why are you unsatisfied with your current computerized estimating product? Please rank your reasons in order of importance from (1) most important to (5) least important.a. Product functionality problems

b. Inaccurate data

c. Difficult to use

d. Poor technical support

e. Expensive

5. How may DRP relationships do you have with insurance carriers?a. 1

b. 2

c. 3

d. 4

e. 5 or more

f. None. We currently do not have any DRP relationships with insurance carriers.

6. How many insurance carriers associated with your DRP relationship(s) encourage you to buy a particular Brand of computerized estimating product?a. 1

b. 2

c. 3

d. 4

e. 5 or more

f. None.

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Attributes/Options

7. Which of the following optional features or product add-ons do you use? You may select more than one item.

a. Imagingb. Paintless Dent Repairc. Frame Dimensionsd. Aftermarket Partse. Salvage Partsf. Tire Databaseg. Estimate Audith. None of these.

8. Which of the following optional product features or product add-ons do you like but do not use currently? You may select more than one item.

a. Imagingb. Paintless Dent Repairc. Frame Dimensionsd. Aftermarket Partse. Salvage Partsf. Tire Databaseg. Estimate Audith. None of these.

9. What is the primary reason for not buying the add-on(s) you like most?a. Planning to buy itb. Costc. Not available with current productd. Othere. None. I do not like or want any add-ons.

77

Attributes/Options

10. Relative to your current product, please rank the following features in order of importance to you from (1) most important to (6) least important.a. Easy to useb. Fast and accuratec. Automatedd. Availability of product add-onse. Customer supportf. Training

11. For each computerized estimating product you own, what is your average contract term?Month-to-month 1-year 2-years 3-

years 4-years 5-yearsa. ADP Shoplinkb. Mitchell FirstEstimatec. Mitchell UltraMated. CCC Pathways

12. What is your preferred contract term?a. Month-to-monthb. 1-yearc. 2-yearsd. 3-yearse. 4-yearsf. 5-years

78

Attributes/Options

13. Why do you like your preferred contract term? You may select more than one item.a. It is cheaper than other options.b. We prefer to stay with one product.c. We prefer to try new products.d. We like the flexibility of changing product.e. Our product requirements change seasonally.

14. For each computerized estimating product you use, on average how much do you pay in monthly fees? Please exclude product add-ons.

<170 171-230 231-260 261-300 301- 350 351-400 401-450 >450

a. ADP Shoplinkb. Mitchell FirstEstimatec. Mitchell UltraMated. CCC Pathways

15. For each software vendor you use, on average how much do you pay in monthly DRP communication fees (fees to upload estimates to DRP insurance carrier)?

<45 46-55 56-65 66-75 76-85 86-95 >95

a. ADP Shoplinkb. Mitchell FirstEstimatec. Mitchell UltraMated. CCC Pathways

79

Sales Tactics

16. Please answer the following questions for each optional product add-on that you use. If you do not use any of these options, then please enter “0” for each product.If a product add-on is already included in the fees of your computerized estimating product, please put a “9” in the box associated with that optional product.

How do you pay on a monthly basis for each listed product?Imaging Paintless Dent Repair Frame Dimensions Aftermarket Parts Salvage

Parts Tire Database Estimate Audit

transaction subscription

What are your monthly costs for each product add-on?Imaging Paintless Dent Repair Frame Dimensions Aftermarket Parts Salvage

Parts Tire Database Estimate Audit

$

17. In the past year, have you been approached by a competing estimating software provider to switch to their product?1. Yes2. No

80

Sales Tactics

18. Which of the following best describes the switching offer(s)? Please select all offers made in the past year.1. Buyout of current contract.2. Free usage of competitor product for a limited time, and reduced price thereafter.3. Lower monthly payments for similar estimating software solution.4. Matched monthly fee and included optional product add-ons.5. Matched monthly payment and offered free or reduced fee DRP communication.6. Other

19. Which would cause you to switch to a new computerized estimating software provider?1. Insurance carrier requests a specific estimating vendor.2. Desirable contract length.3. Price.4. Specific product features.5. Customer service/support.6. I would not switch.

81

Sales Tactics

20. How many employees does your shop have (include part-time employees)?a. Blank

b. 2

c. 3

d. 4

e. 5

f. 6

g. 7

h. 8

i. 9

j. 10

k. More than 10

21. How many employees in your shop use computerized estimating product?a. Blank

b. 2

c. 3

d. 4

e. 5

f. 6

g. 7

h. 8

i. 9

j. 10

k. More than 10

82

Sales Tactics

22. What is your shop’s average annual revenue from collision repair services?a. Don’t know.

b. Up to $100,000

c. $100,001 – $250,000

d. $250,001 - $500,000

e. $500,001 - $750,000

f. $750,001 - $1 Million

g. $1 Million - $5 Million

h. More than $5 Million

23. Where is your shop located? Please enter the City and State.a. City___________________

b. State__________________

Computerized Estimating Software Products

84

ADP Claims Services Group

ADP CSG offers claims information product solutions to insurance companies, claims adjusters, and collision repair shops.

Main claims services products: Automated Collision Damage Repair Estimating products Integrated Electronic Digital Imaging and Communications

services Vehicle Valuation Services for total losses Collision Repair Management systems products Aftermarket and Recycled Parts Locating and Pricing services Related Management Information products

85

ADP CSG Products - Shoplink

ADP Shoplink is a software used in the collision repair industry to:

Create estimates of the cost of repairing damaged vehicles, including parts and labor

Submit estimates (with digital vehicle images, if desired) to the insurance company in order to secure payment approval for the repair job

Qualify for direct repair program relationships with insurers

86


Industry’s only vehicle-driven and option-specific automated estimating system

Fast, accurate and detailed Shoplink Imaging:

– Attaches and uploads digital images faster

– View photos and related comments without even opening the claim

– Increases shop's productivity by transmitting estimates and images in the same simple communication session

ADP Database – Shoplink's powerful engine

– Most comprehensive and widely accepted parts database in the collision repair industry

– Accessed by over 13,000 users across North America

87


– Provided the data to process more than 100 million estimates over the past 20 years.

– Covers over 98% of the vehicles on the road today and leads the industry in coverage of new models.

– Contains over 3 million part numbers and prices, and nearly ½ million labor records

– Every user receives a fully updated database CD, featuring manufacturer, after-market and salvage part pricing every month. "Real steel" salvage data is updated daily and is available via modem.

Source: Press Release, ADP CSG Website

88

CCC Information Services Group, Inc.

CCC Information Services provides automobile claims information, processing services, and claims management software.

Main products: Total loss Integrated Imaging Forms and Correspondence Built-In Digital Imaging Pathways Independent Appraiser Solution Pathways Digital Imaging Recycled Parts services Recycled Part Valuation Recycled Part Location EZFrame Measurement System EZNet Communications Pathways Image Management AutoSearch

89

CCC Products - Pathways

Total Loss: Primary vehicle valuation product total loss Provides insurance companies ability to settle total loss claims

based on market-specific vehicle valuesPathways: Provides up-to-date pricing Offers interactive decision support and computer-assisted logic to

produce accurate collision repair estimatesEznet Communication services network Connects insurers, appraisers, and collision repair facilities Pathways workflow management software designed to integrate

each of the company’s product offerings on a common platform with common graphical user interface.

90


Functions of CCC Pathways suite: Collision estimating digital imaging data mining applications claim audit Reinspection management tools

CCC Pathways consists of: CCC Pathways Appraisal Solution (for insurance customers); CCC Pathways Estimating Solution (for collision repair facility

customers); CCC Pathways Independent Appraiser Solution (for independent

appraisers); CCC Pathways Digital Imaging; Recycled Parts Service; Comp-Est Estimating Solution.

91


Features of CCC Pathways Estimating Solution software : Enhanced communications capabilities - customers can complete their

estimating work while transmitting information from their CCC Pathways unit to and from the EZNet communications network, eliminating unnecessary downtime.

Automated custom profiles -saves insurance carriers hours of manual input time. With the custom profile feature, users can make changes to individual user profiles for each of the carriers' claim offices and repair shops.

The integration of a Paintless Dent Repair The option to integrate other CCC products and features such as a

total-loss valuation tool, Pathways Digital Imaging, Recycled Parts Services and CCC Valuescope, which allows users to attach pictures to an estimate, and Forms & Correspondence, a tool users can employ when communicating directly with their customers.

The MOTOR and recycled-parts databases

92

Mitchell Repair Information

UltraMate UltraMate ShopPac

Mitchell’s main product, UltraMate, includes the following:

93

Mitchell Products - UltraMate

Functions– helps to create estimates that are accurate, verifiable, and readily

accepted throughout the industry.

– combines database accuracy with Windows

– Includes automated calculations and repair procedure pages that virtually eliminate errors.

– Produces estimates that are right the first time.

– Reduces the need for supplements.

– Delivers powerful estimating technology with intuitive, uncomplicated navigation, clear graphics, and simple-to-follow help instructions.

Mitchell’s main product, UltraMate, includes the following:

94

Mitchell Products - UltraMate

Features– Powered by the Mitchell Database – Tab Menu Structure – Configurable Repair Screen – Right Click and Drag and Drop Functionality – Automatic VIN decode – Procedure Pages – Based on CIECA standards facilitating open communications – Communicate electronically to retrieve assignments and send

estimates – WebCom Broadband Communications (TCP/IP, DSL, T1 and ISP

connections Benefits

– Increase productivity and flexibility – Saves time – Reduce errors due to greater accuracy – Connect easily and quickly with business partners

95

Mitchell Products – UltraMate ShopPac

Features– Turns UltraMate estimates into repair orders

– Generate a parts order and fax it to vendors

– Built-in reports

– Productivity snapshots

– Status Reports

– Instantly shows which parts have been received, back-ordered, or returned

Benefits– Adds a business advantage to your UltraMate estimates

– Saves time and increases productivity

– Fully integrated with UltraMate

Mitchell also offers a more advanced product, UltraMate ShopPac

Auto Repair Industry

97


The market grew 3.2% in 2001 to a value of $120.5 billion.

98


Service/garage stores from the biggest chunk of market share in the repair industry, a value of 37.8%, dealers form another 21%.

Parts, Chemicals form 57% of the market, the remaining is labor.

99


Leading Companies

Daimler Chrysler Ford GM Midas Firestone Mastercare Gemini

100


The market is forecast to reach $142.5 billion, a growth of 14.5 % from 2002.

ADP Claims Services Group

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