Here’s a clip from our recent podcast with Rod Cruce from Trifecta Growth Institute where he talks about understanding what a TPA (Third-Party Administrator) really does from being a sales funnel, a program and project management office for an insurance company and more.
Rod Cruce has owned multiple different businesses and has spent many years running and building a top performing Restoration company where they properly learned how to utilize TPA by understanding the fundamentals and developing an Algorithm of success.
“Well, first of all, this is only three variables of the algorithm, you know, we do have a follow on parts that are, we’re going to release about three more part, three more pieces of the, three more variables of the algorithm. And ultimately there’s between 15 to 18 of these variables that make up the algorithm.
And it’s something that we put it in bite sized pieces. Hopefully you chew on it, look at it. Does it make sense? Does it not make sense? Sure. So, but in this article, you know, one of the first things I think is very important. Is it figure out one, you understand, you got to understand what a TPA does.
And a lot of people, you know, and when we’ve asked a lot of questions about this from companies what do you like about TPA? What do you think they do? And almost everyone comes back and they say, okay, they provide us jobs. And I said, well, why is that? You know, and they’re just like, well, you sign up, they give you jobs. And I’m like, yeah.
Well, that’s called a sales funnel. So, you know, if you look at it, one of the biggest responsibilities and something that fulfills for a contractor is a sales funnel, just like we were talking before, whether it’s Google ads, Facebook ads, or you got business development, or you’ve got something out there that’s attracting your leads, this is considered a sales funnel, and it should not be on your own.
It should not only be, but should not be your only sales funnel. So we’ll make sure that’s very, very clear up front. And so understanding that piece of it is great. And from a contractor’s perspective, you’re like, yes, I’ve got a sales funnel. I got jobs coming in. Okay. You know, and that’s all good.
Now, the second piece of what a TPA does, it’s also a program and project management office for an insurance company. Okay. And so you got to understand the TPA is in the middle between the contractor and it’s also in the middle between an insurance company. Insurance company, the TPA is handling their claims management and from an insurance company, that’s great because they don’t have the bandwidth.
They don’t have the personnel to do that. And so they outsource that and they’re willing to do that. Now, with that comes some metrics. You know, they want to hold that TPA to a standard as well, and they have to make that business decision is that TPA doing what they want it to do? Is it meeting their requirement?
And if a TPA has certain requirements to meet with the insurance company, of course, they’re going to put those requirements on you. And that’s what a project management office does. If you look at some of these bigger companies, you know, Belfor, some of the store posts, some of the big, big conglomerates within the industry.
I guarantee you they have something similar to a project management office that is putting parameters on to their people or to their companies underneath that. You know, Lockheed Martin has a project management office. I mean, you look at those companies, Boeing, every one of them, and those are to manage the projects within the company and in the same sense, every contractor who’s an owner or has an executive leadership or the headquarters aspect of it, even for the smallest company, that’s maybe 15 or 20 people in there, they are considered a project management office to their departments.
So it’s not, it’s a concept that rolls downhill and everybody does it. So as long as you understand that aspect of what a TPA is, I think it gives you a better perspective. And that’s what I wanted to bring out in that, that first section of it.”
If you missed the full Podcast Episode, watch it here:
Rod Cruce from Trifecta Growth Institute (Podcast Replay Inside)
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Benjamin Ricciardi is the founder of Ironclad Restoration Marketing, A digital marketing agency that specializes in the Restoration and Cleaning industry based in South Florida. Benjamin is the author of The No Bulls**t Guide to Internet Marketing for Restoration Contractors and hosts The Restoration Rundown Podcast, a podcast that is focused on everything related to marketing and owning a Restoration and Cleaning Business. Connect with Benjamin and Ironclad Restoration Marketing on social media for the latest tips and tricks on how to grow your Restoration Business.