3 Common Myths About TPA’sAug 22, 2019
Here are the three most common myths about TPA’s (Third Party Administrators)
- You can’t make any money with TPA assignments
- The admin work required is so tedious that it’s not worth the trouble
- TPA’s are just terrible to work with
All three myths are not true; however, some explanation is required to clarify why some people have this belief. The 2019 Cleanfax Restoration Survey reports 48.5% of restoration companies participate in these programs.
You can’t make any money with TPA assignments – It’s not like the old days where you complete your Xactimate estimate and as long as you had a good relationship with the adjuster, it got paid in full – or worst case, he asked you to take off one fan or a labor hour or two. We routinely ran P&L’s by TPA and compared the GP% to non-program jobs. With one exception, the variation was inconsequential. (Call me and I’ll tell you which TPA must be handled in a unique manner.)
THE GOOD NEWS – You can significantly improve your revenue and net profit $’s by joining TPA programs.
The admin work required is so tedious that it’s not worth the trouble – The administrative work is most likely more involved than what you’re accustomed to if you’ve never been on a TPA program but if you have a good administrative person, they won’t have a difficult time picking it up.
THE GOOD NEWS – The new requirements on your company from an administrative standpoint will make you a better organization. Most of what you’ll experience is a demand for a high level of communication with the customer & claim handler(s) through a web portal and more stringent equipment use scrutiny. In some cases, my clients even found their technicians were regularly placing too few pieces of equipment.
TPA’s are just terrible to work with – They really aren’t bad people. It’s just not true. Some of my closest business relationships are with people who work at these companies. Just like the employees on your team, they have performance goals and are being monitored. They’re just trying to do their jobs. Don’t get me wrong, you might run into someone you don’t care for but I wouldn’t let that get in the way of adding significant revenue and profit dollars to your company.
THE GOOD NEWS – Some are easier to work with than others for sure. For the most part, it’s just like any other new relationship. You need to figure out what they are looking for from you and your team and then deliver. When you give them what they want, you’ll be known as a high-level performer and you’ll be happy for the extra revenue. Another benefit is that you can add geographic coverage and/or add a new service. If you aren’t doing repairs, you can start small with one TPA and ask them to turn on the GC trade for you.
There are systems and strategies for getting on TPA programs and delivering on their unique service level agreements. If you’re thinking of trying to work with third party administrator program or if you are already on programs and are struggling in any way, stop struggling – I can help. Click below to schedule a free call or call me now.
In future blogs, I’ll go into more depth on each of the following seven programs for increasing your top line. If you want to learn more about executing on any of these strategies in the meantime, let’s schedule some time to talk. (Be sure to check out my last blog – Getting more work from your online presence – other than social media)
- Agent Marketing
- Adjuster Marketing
- Plumber Marketing
- Property Manager Marketing
- Local Networking Groups
- Email Marketing to Past Customers
- Social Media
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