Just Sayin’ Blog – Interview with Paul Heinauer – Glasspro

Paul, you have a wealth of experience and knowledge in the automotive glass repair and replacement (AGRR) industry. I appreciate your taking the time to talk with me today.

I know that you got your start in the industry in 1979 by joining PPG Industries as a management trainee and over the course of your time there you became a branch manager for them in Greenville, South Carolina. What sparked your initial interest in the AGRR industry?

PH:

I liked the idea. Everyone who owned a car was a potential customer. I also liked working directly with customers. It was a good fit with my personality.

 

You left PPG in 1986 to open Coastal Glass Distributors in Charleston, South Carolina. Do you mind sharing the reason why you left PPG?

PH:

I loved working with PPG and they taught me so much, but I saw an opportunity to open a glass distribution business in Charleston. The market seemed underserved to me.

 

So you saw a great opportunity to open a wholesale business to fill a need in the marketplace and Coastal Glass proved to be a success. That’s great, but what caused you to decide to exit a successful wholesale business that had grown quickly in the market and move into retail?

PH:

The auto glass business was changing and a number of our retail customers were being purchased by large retailers.

I realized that you couldn’t serve two masters.

 

So after starting Glasspro in 1995 and turning your focus solely on the retail side of the AGRR industry what did you learn about the differences between the wholesale and retail business and especially when it came to serving the needs of your customers?

PH:

The insurance industry paid better than contractors did. But more importantly, I felt insurance customers valued service and quality more than a lot of glazing contractors did.

 

So how long did it take you to open additional stores in the South Carolina market?

PH:

We opened our second location in 1995.

 

Knowing you and understanding that ensuring that each and every customer you do work has the absolute best experience and is “delighted” with that experience, as I’ve heard you say, and service they receive from Glasspro, what suggestions or ideas can you offer to the readers of this blog on how to achieve that with their customers?

PH:

It is a total commitment from all of our people to recognize that it is a one job at a time business.

 

What were some of the challenges you faced in finding and then keeping the best people to make sure your customers are always delighted with Glasspro?

PH:

We hire “nice,” and we use a personality profile assessment on every potential new hire. We want to make sure it is a good fit for all parties concerned.

 

Is it difficult in a market like South Carolina to sell people on windshield repairs?

PH:

We spend a lot of time, energy and training on explaining the benefits of a repair.

Do you provide any non AGRR services for customers at Glasspro?

PH:

No, auto glass is all that we do.

 

You and Glasspro are and have been leaders in the AGRR industry for quite some time. In the past 8 years you’ve had 4 of your auto glass technicians win the Auto Glass Olympics in the United States and 1 who won the world title. That is truly an amazing feat for one AGRR company to have achieved and I’m sure you’re quite proud of those who have competed in and those who have won these events. What drives your auto glass technicians to not only excel in what they do for your customers in South Carolina, but to work so hard to become Auto Glass Olympic winners?

PH:

We have been fortunate again in hiring the right people who are committed to striving for excellence, each and every day.

For other companies in the AGRR industry that would like to compete and have the success that you’re auto  glass technicians have had in excelling in these events, what advice do you offer them?

PH: 

Train to the Auto Glass Replacement Safety Standard® (AGRSS®)  and then install with it on each and every windshield.

 

As a strong supporter of the AGRSS® standard and the goals of the Auto Glass Safety Council, Inc. what advice would you offer to other AGRR companies about joining the safety organization, following the ANSI standard and opening the doors of Glasspro to third party auditors to validate to your customers that you provide the safest installations possible?

PH: 

I believe it is good for your customers and sends a message to your employees that providing safety is the most important thing that we do.

What advice can you offer on how you successfully compete against a national player in the market place?

PH:

We respect all of our competitors, but we also take great pride in striving to deliver excellence and value to our customers.

 

I know that you may be uncomfortable about talking about some of the things you and Glasspro do to help those in need in your markets, but you’re a big supporter of your community and I commend you for your the efforts. You have developed a program called “3 Degree Guarantee” to help many in your community and the coastal area of South Carolina with special needs. Could you tell us a little about what you and your company accomplishes with “3 Degree Guarantee”?

PH:

It helps us bring awareness to many non profits as well as give them funds. This allows them to serve our local community.

 

I’m very proud that Glasspro is one of the co-branded partners of Windshield Centers. As a locally owned and operated AGRR business that has found great success in the markets you serve, what attracted you to becoming a part of Windshield Centers?

PH:

Windshield Centers is customer focused and committed to delivering excellence just like Glasspro strives to be. There were many things that I found attractive about Windshield Centers, but two in particular stood out. First, Windshield Centers is using advanced technology which provides a quick response to customers’ needs in a way that really keeps a customer in the loop. Secondly, they have created a Windshield Centers “Centers of Excellence”, which focuses on an environment that fosters continuous improvement for its members. These two advancements are just a few of the things which I believe help us bring value to our insurance partners.

 

Is there anything else you’d like to talk about with the readers of this blog?

PH:

I believe we are entering a special time in our industry and I am confident the future is bright for the committed independent auto glass company.

 

Well thank you very much Paul for taking the time to talk with me about Glasspro and the success that you’ve achieved and also passing along how positive you are for the future opportunities that exist in the AGRR industry. I’ve had the fortune to spend time with you and your team and it is quite obvious why you and your company have enjoyed such great success. There are always opportunities in the market place for those who desire excellence for their company and the people that work with them to achieve that success. I wish you and your organization the best in 2013 and the years to come.

Just sayin’.

Just Sayin’ Blog – The Pain of Regret

In these cold days of winter my sports focus starts shifting away from the NFL, even though the ultimate game is taking place this coming Sunday night. The so called “HarBowl” pits the San Francisco 49ers coached by Jim Harbaugh versus the Baltimore Ravens coached by John Harbaugh. I wrote a blog last year titled “Meaningful Quotes – Harbaugh, Hogan and Einstein”. In that blog I used a quote from their father Jack Harbaugh  

“Attack this day with an enthusiasm unknown to mankind.”

While watching this NFL season we’ve witnessed how both of these coaches have guided their teams this season and on to win their divisional playoffs games. The two teams and coaches will meet in New Orleans on February 3, 2013 at Super Bowl XLVII. The Harbaugh brothers’ enthusiasm for the game and life is quite evident.

How about you? Do you have a similar level of commitment and enthusiasm for what drives you in your life?  Are you committed to doing the best that you can each and every day? Be that in business or in sport, there are times when you face difficult challenges that require you to make that extra effort that separates your company from another, one sports team from another.

The ability of you and your company to excel in business today demands that you have that enthusiasm and that you must surround yourself with those who you know have it too. Enthusiasm and the ability to give it your all, to use every play in the book and design your own new plays to beat your competition are keys to your success. This doesn’t mean that you’re always going to win just because you gave it your all,but you have to put yourself in the position to win. That’s certainly what I’m attempting to do and I want to associate myself with team members with similar enthusiasm who will help us to win.

As I mentioned earlier, this is the time of year that my sport focus moves away from the NFL and moves to NCAA Men’s Basketball. It ends quickly with March Madness, but right now, as a fan, I enjoy watching big games between NCAA powerhouse names. Whether you’re a fan of the Big 10, 8 or 12; the ACC; the SEC; the Big East; the Pac 12 or other conferences, you know what those big games are. In any game a top team can be defeated by another team not as highly ranked and seemingly with less talent. How? With enthusiasm and the desire to win underdogs can prevail. Upsets happen and, as long as your team is not the loser, it’s always fun to watch. In recent games you could see:

13th ranked Butler Bulldogs (now 9th)

over the then 8th Gonzaga Bulldogs (now 7th)

or the

25th ranked Miami (Florida) Hurricanes (now 14th)

over the number 1 ranked Duke Blue Devils (now 5th)

or the

unranked Villanova Wildcats (still unranked)

over the 3rd ranked Syracuse Orange (now 6th)

or the

unranked Georgetown Hoya’s (still unranked)

over the 5^th ranked Louisville Cardinals (now 12th)

Just to name a few.

The Gonzaga versus Butler game on Saturday, January 19, 2013 played at Hinkle Fieldhouse in Indianapolis was especially exciting and turned into an instant classic. After a hard fought game, Butler won the game on a last second shot by sophomore forward Roosevelt Jones. After the game Butler Bulldogs men’s head basketball coach Brad Stevens in an interview with ESPN suggested that,

“The pain of losing isn’t as great as the pain of regret.

You have to give it your best.”

The message is do everything you can to win your game even if you sometimes come up short. Don’t let anyone or any company determine the path you take and then find that you regret it later.

Win or lose in business or sport you must have what Jack Harbaugh exhorted his sons to always do and give it your all.

“Attack this day with an enthusiasm unknown to mankind.”

Great advice. And as Jack Harbaugh has also told his family for a longtime,

“Who’s got it better than us? Nobody!”

With his sons battling each other as head coaches in Super Bowl XLVII it appears a fitting motto for his family.

Just sayin’.

Just Sayin’ Blog – The Times They Are (Always) A-Changin’

The ability to accept and adapt to change is a critical component to finding success in business. As much as we find comfort in the places we know best, we must continually push ourselves and our company toward a place that no one else has found yet or will never figure out.

How do you set the bar higher than your competitors so that you can outperform them? That’s a question that you need to answer for your market and business.

In 1964 the singer songwriter Bobby Dylan released a song “The Times They Are A-Changin’” which portrayed a time of great change in the United States. Every new generation looks back at the preceding generation as one being unwilling or unable to change and stuck in the past unable to move forward. The 60’s were a time of great change in social norms, fashion and music, as well as in the political landscape. We’ve been experiencing a great deal of change in retailing for quite some time, but especially so in this new Millennium and it doesn’t seem to be abating.

Right now there is a ferocious retail battle royal in the retail consumer market with two of the largest retailers, Walmart and Amazon.com (big box versus internet retailer), fighting to determine how consumers will buy countless products in the years to come. In 2009 Amazon.com began rolling out a program offering same day shipping in a number of cities. It has since developed a large network of warehouse distribution centers to service its customers across a large part of the United States. To counter Amazon.com, Walmart started a Walmart To Go offering online shopping of a select number of products shipped directly from their store locations to customers. And in a few markets Walmart is offering same day delivery of products. The strategy that Walmart is attempting is difficult and a potentially dangerous one as it already has 4,000 big box stores (including Sam’s Club) which have a very high cost to operate. The margins that Walmart operates under are also very small, so the gambit is one that is sacrificing current profits to maintain and hopefully gain market share against Amazon.com and other retailers unable to compete. When your sales are $ 444 billion a year versus Amazon.com’s $ 48 billion it would seem that you’d have an edge, but last year Amazon.com saw a 41% increase in sales versus Walmart’s 6% overall increase in sales.

Which company is following a strategy that will allow it to be the most successful retailer in the future? Time will tell, but even when you’re Walmart you’ve got to consider that your strategy for taking market share from the mom & pop businesses, which has proven to be such a successful model for years, could ultimately be at risk from other companies with strategies that don’t require big box brick-and- mortar stores. Each is trying to find a unique selling proposition (USP) that will attract consumers to ensure long-term success and neither will stop until it is found.

Who remembers A & P (The Great Atlantic & Pacific Tea Company)?A company that once was considered the Walmart of its time,  A&P held the title of the world’s biggest retailer in the 1930′s when  it had 16,000 stores in the United States. In the late 1930′s A & P began the self-serve grocery store concept, but by the 1950’s it failed to recognize the changing marketplace and failed to listen to the demands of the ever-changing consumers. It eventually became an irrelevant retailer. By not adapting to the changes that were taking place in the marketplace, A & P began a decline in sales that ultimately caused it to file for bankruptcy. The company did emerge from bankruptcy, but A & P probably never again will capture the greatness it had once achieved.

There are many ways for your business to remain relevant and continue to survive in the retail world. Whatever you believe it is that you must do to remain relevant you need to make sure that your customers believe it too. For some businesses remaining relevant may mean selling or merging with a competitor. In recent weeks several businesses have announce that they are doing just that. You’ve probably read about recent acquisitions announced or completed by Gerber Collision & Glass (in Florida), ABRA Auto Body & Glass (in Minnesota), Guardian Auto Glass LLC (in Maryland) and Safelite Auto Glass (in Wisconsin and South Carolina). Of course buying and selling companies in the auto glass repair and replacement (AGRR) industry isn’t new, it’s been going off and on in spurts since the mid 1980s. During the past 30 years, a number of companies have acquired others in the AGRR industry to increase their own market share and separate themselves from or take out competitors. It certainly seems that there has been an uptick in acquisitions of companies of all sizes and I’m sure you’ll be hearing of others very soon.

Other ways you can remain relevant are by finding that USP that separates you from your competitors. So what is that something that only you can do in your market, something that raises the bar so high that your competitors either can’t or won’t try to achieve it therefore distinguishing you from others in the eyes of consumers? If you find that USP, you will survive against other retailers in the battle royal that exists in your market. Of course the need to find that extra something has always existed in business, but maybe more so today with the pace of change that you see across the retail industry. When you see the mega-retailers like Amazon.com and Walmart fighting over current customers to determine which will find the USP that will secure future customers and separate it from others, you know that the same battles that have been going on for years aren’t subsiding anytime soon. It is the same in the AGRR industry and you can be sure that things that you’re doing today in your business will change tomorrow and you need to change with it.

So when Bobby Dylan wrote in the last stanza of his hit tune in 1964,

“The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin’
And the first one now
Will later be last
For the times they are a-changin’.”

I think that he could have added another word to the last lyric, “For the times they are always a-changin”.

Just sayin’……

Just Sayin’ Blog – A “Reasonable” Path to Follow

In 2012 elected representatives in two states, South Carolina and Massachusetts, introduced legislative initiatives related to the auto glass repair and replacement (AGRR) industry. In both states the initiatives ultimately turned into bills that were passed and signed by the respective state’s governor. The legislative process is often referred to as “sausage making” (attributed to American poet John Godfrey Saxe), taking ideas of a diverse group of interested parties (in this case both large and small AGRR retail companies, manufacturers and distributors, networks or remarketers, third-party administrators, insurance companies and others) who attempt to influence legislation in hopes of making the sausage to their own individual taste. Legislators, with the help of all the interested parties and of course the lobbyists employed to help influence the outcome for their clients, attempt to find common ground so that when possible all of the interested parties see something of what they originally wanted in the bill that is ultimately passed but probably not everything each was hoping to achieve. There is of course always next year…

In the blog I posted on June 12, 2012 titled Auto Glass Repair & Replacement Industry Legislation in South Carolina ***UPDATED*** , I wrote about the law that was passed and signed by the governor in South Carolina earlier this year and what it meant to those who compete in all facets of the AGRR industry in that state. The South Carolina law takes effect on January 1, 2013. In this blog post I’d like to take a look at the bill that was passed and signed into law by Massachusetts Governor Devel Patrick and what its guidelines mean to those that it is truly meant to protect – consumers in the State of Massachusetts. I believe that this law is one that should be a template for use in other states that want to pass AGRR legislation in the coming year.

Massachusetts Bill 2216 took full effect on November 1, 2012 and the law’s primary focus is on what it should be – consumers. When you review the requirements of the law, it states that businesses that provide AGRR services in the state are required to follow a number of guidelines in order to be licensed which ultimately will provide a variety of protections to consumers. Licensed? That seems “reasonable” doesn’t it? With the importance of a safe installation of the windshield to vehicle owners in the state it seems like a “reasonable” expectation that residents of the state should feel confident that the Massachusetts Division of Standards is watching out for them and their passenger’s safety.

What are some of those protections? The first is that any company or individuals doing replacements for Massachusetts residents register with the state and maintain an address in the state. Any new company or a company that is seeking renewal of its license for a shop or shops must have a physical location or locations and that the company maintain indoor facilities to perform repairs to vehicles. Again that appears to be a “reasonable” expectation on the part of consumers.

If you’re going to operate in Massachusetts a company must register its vans as commercial vehicles and obtain all licenses and permits that are required by the various governments (local, state or federal). Again that seems like a “reasonable” expectation of a consumer in the state.

There is a requirement in the law that a “registered motor vehicle glass repair shop shall maintain records for each motor vehicle upon which motor vehicle glass repair services have been performed”.  That the registered motor vehicle glass shop has to maintain records to “show(ing) the usage of all glass parts, major accessory parts, including moldings and major hardware and component parts”. Remembering that the law is really all about protecting Massachusetts residents, the bill goes on to address the requirement that the registered shop maintain records about “the brand, product number or name and lot and batch numbers for the adhesive system product used” (language that relates to the Auto Glass Replacement Safety Standard – AGRSS™) and again is a “reasonable” protection of the consumer in case of a failure or recall of the glass part or adhesive product used. The law requires that the registered shop maintain records for “18 months or for so long as a warranty  on the motor vehicle glass repair service is performed is in effect, whichever is longer.” This is another guideline in the law that is now in effect that seems like a “reasonable” expectation of a consumer in case they experience an issue relating to the AGRR service provided in the future.

The law also requires that the consumer must be provided, upon their request that a “registered motor vehicle glass repair shop shall disclose all information relating to the charges for the repair or replacement services, including the amount of the charges, the identification and line item charges for the parts provided and verification of the parts used, regardless of whether the amount is paid by the consumer or billed to the consumer’s insurance company.” That seems “reasonable”. If a Massachusetts consumer has a glass repaired or replaced, shouldn’t they expect that the price that is being invoiced by the company that is actually doing the repair or replacement is the price that is actually being charged to their insurance company when a claim is filed against the consumer’s insurance policy? Yes that does seem “reasonable”. I’m not sure how a network or remarketer who is used to receiving a “spread” on the work being done by others on its behalf in Massachusetts deals with that new guideline, but it is now the law.

There are also requirements relating to the actions that are allowed to take place by third party administers, networkers or remarketers and insurance companies that operate in the state. The law also includes a section relating to guidelines that outlaws anti-steering by any of the aforementioned to ensure that consumers can use a shop of their choice. No third party administer, network, remarketer or insurance company can require that a Massachusetts insured use a particular AGRR glass shop. That also seems “reasonable” expectation doesn’t it? A law that is providing the consumer the opportunity to choose the shop they want to use via this legislation is a good thing.

The law authorizes the Massachusetts Division of Insurance to not only enforce all of the guidelines, but authorized the authorities to collect fines associated with any violation of the law by those providing AGRR services to Massachusetts residents. The law requires consumer transparency and that too is a “reasonable” expectation that consumers should expect to receive when they are in need of auto glass repairs or replacements.

I believe that Massachusetts Bill 2216 which has was enacted by the state legislature and signed by the governor into law could be a template for similar legislative initiatives in other states in the coming year. In a previous blog titled Network Participation Agreement – “Special Update” I suggested that as an AGRR retailer you might want to,

“continue to focus on the customer and provide exceptional value with outstanding transparency.” 

It seems to me that the Massachusetts law provides transparency and new protections to residents of the Bay State who may require the services that AGRR industry provides to them and those protections are indeed “reasonable”. The guidelines in the law and the protections it provides must be abided by AGRR retailers in the state, third party administrators, networks, remarketers and insurance companies or there are consequences to any who may attempt to circumvent the law. The guidelines provide protections for residents/consumers that are “reasonable” for all to follow and are in the best interest of residents/consumers. The Massachusetts law is, I believe, a great place for other states who are interested in protecting its residents to start. What do you think?

Just sayin’……………

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Just Sayin’ Blog – Hopes for the New Year (Fall Update)

We are now in the last quarter of the year; so how has 2012 been for you so far? In the first month of this year I posted a blog titled ‘Hopes for the New Year’ and then wrote a spring and summer update to that posting. When you take a look back over the past 9 months pretty much all the hopes for 2012 I had have fallen short.

The first hope was that:

“Our industry is affected by three key business drivers:  weather, the economy and miles driven. Sadly we have no control or influence over any of these so I’m hoping for some luck for 2012.”

The weather this year hasn’t been very cooperative for the automotive glass repair and replacement (AGRR) industry. We started with a snowless winter in most of the northern states and as reported by HailReporter.com we’ve experienced about 2/3 of the hail storms that we had in 2011. You know that snow, ice and hail all are big influencers to auto glass breakage and all were busts (pun intended) this year.

Early in the year many experts forecasted the economy would be anemic. Most of those forecasts were accurate. Kiplinger.com provides a variety of information on financial advice and business forecasts via its Economic Outlook section of the website which they regularly update with current outlooks. As of September 27, 2012 Kiplinger reported that:

“The stubbornly tepid economy will persist for the rest of this year and next.”

“It’s clear now that job creation will continue at a sluggish pace in the second half of 2012.”

“The U.S. is likely to add fewer jobs this year than last — about 1.6 million, compared with 1.8 million in 2011.”

“Instead of lending, banks remain wary.”

“Higher gasoline prices pushed inflation in August to an annualized rate of over 7%.”

“Business managers will remain very cautious about expansion at least into the early half of 2013.”

“Expect the recent roller coaster in oil prices to keep on going a while longer.”

“Rising prices of fuel and other goods pose a risk to the increased growth rate, even as consumers shrug off anemic job growth and continue to spend.”

Not very positive views from Kiplinger’s relating to another key influencer – the economy – to the AGRR industry.

Miles driven had been trending upward this year, but with rising gasoline prices the Department of Transportation’s Federal Highway Commission reports that as of July 2012 miles driven starting heading lower again. Earlier this year many forecasted that 2012 would not be a good year for gasoline prices and it appears that the forecasts were fairly accurate. This is the time of year when historically prices decline, but even though the price of oil has moderated; issues with a number of gasoline refineries across the country has caused prices to go higher as reported by a GasBuddy.com blog. The AGRR industry would like to see miles driven go back to the peak levels of seen in 2007 – 2008 for this key influencer.

The second hope was that someone becomes a market leader for the AGRR industry. I’m not holding my breath, but I’m still hoping for that one. My third hope was for fewer imported (non OEM) auto glass parts in 2012 so that prices might be able to stabilize. There may be fewer imports this year, but that’s only because the overall market size is down. The fourth hope was that every windshield be installed according to the Auto Glass Replacement Safety Standard – AGRSS®. It’s the right thing to do for your customers.

 

The fifth and final hope was that somebody would step up and compete against Safelite® at the both the retail and network level. It was a tall order considering the extremely envious dominant position that it enjoys with its strong retail and network. It’s not as though there aren’t individuals or companies at all levels of the AGRR industry with the unrelenting goal (and hope) of providing consumers with an alternative. At some point you have to believe that insurers and fleets might become wary of the tremendous influence the market leader has achieved with its dominant market position. It’s hard for me to see how Safelite® could maintain its market position or really grow its market share larger long-term. Unless they are willing to restart its acquisition program or maintain the onslaught of media advertising over the long-haul it’s going to be tough for Safelite® to move its sales upward in a meaningful way. Time is running out this year, but who knows what the New Year will bring.

 

Here’s hoping that in the last three months of 2012 you’re seeing positive signs pointing to improvement in your business or at the place that you’re working.

Just sayin’……….

 

 

Cartoon courtesy of Tom Fishburne

 

 

 

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Just Sayin’ Blog – Inconvenient Truth(s)

An inconvenient truth is a truth that no one likes to admit, but it is the truth nonetheless. A number of these inconvenient truths exist in the auto glass repair and replacement (AGRR) industry and everyone in the industry deals with them every day.

 

 

Over the years it has become more and more difficult to find success in the AGRR industry. Once upon a time, anyone could own a retail auto glass company and survive, but I think that has changed. One inconvenient truth is that some in our industry aren’t going to survive. As an owner you’ve got to master many new tasks that didn’t even exist 10+ years ago and some owners just aren’t capable of doing so. As a business owner you’ve got to figure out how to attract customers, especially in a time when the weather, the economy and miles driven are working against your business.

As we entered the new millennium, who in our industry really would have seen the need to understand the concept of search engine optimization (SEO) for a “website”? Who would see social media sites such as Facebook™, Twitter™, Craigslist, etc. becoming such an important way to market and communicate with customers; or that the Yellow Page Book™ that we once relied on would become a relic of the past?

Who, other than Steve Jobs, the co-founder of Apple®, would have thought that you could ask someone called Siri, the lady that lives inside my iPhone to list the “closest auto glass shops” near where I live in Chicago. Siri told me “Careful with the broken glass, David,” and then she gave me a listing of fifteen AGRR shops with two names (Safelite® Auto Glass and Gerber Collision & Glass) you’d easily recognize in the market because both are big advertisers in the local media. I also told Siri I was looking for “auto glass in Chicago” and she told me “I found fifteen glass repair shops in Chicago:” followed by a slightly different list of companies, but including the same two names aforementioned. Somebody is paying attention to their internet strategy aren’t they? Are you?

How convenient you make it for your customers to interact with you online will contribute to your future success. If you’re not willing to embrace innovative ways to grow your business in the ever changing marketplace you compete, you will not attract the customers willing to pay you the best price for the products and services that you provide. The truth is that if you’re going to survive and thrive as an AGRR retailer or as a network, you have to know that no one is going to turn the clock back to make it easier for you to be successful in your business. You have to compete in the marketplace with the hand that is dealt to you each day and if for some reason the way business is done changes tomorrow, you’ve got to figure out how to deal with it.

 

Another inconvenient truth is that AGRR networks provide great value to the clients that utilize the various services offered. As much as those who don’t participate in networks complain about the existence of them; clients vote with their feet and they obviously perceive value in the bundled services that networks provide. Can, or will, that change? Certainly it can change, but in the absence of a client deciding to take back direct responsibility for managing its AGRR losses (or a new platform that could take the place of the current networks that operate in the AGRR industry) it’s unlikely. We could certainly see movement of clients from one network to another network in the coming year(s) of course; and depending upon the relationship that your company has with the network that “wins” a new client you can hope that more profitable jobs come your way. But if that hope is what you need to make your business successful you might look for another source of jobs that you have more control over.

 

And staying on the topic of networks; I don’t think that a network that utilizes a “buy/sell” or “spread” (when the network “buys” the glass repair or replacement from an AGRR retailer providing the repair or replacement and then “sells” the repair or replacement to its client at a higher price) pricing model for its clients can continue to exist long-term in the marketplace. Relying on the AGRR retailers who actually do the repairs and replacements to accept lower and lower prices, while continuing to provide high quality repairs and replacements has to someday hit a wall. At some point AGRR retailers will push back and the networker that only makes profit on the “spread”  is going to have difficulty providing its clients with the same levels of service other competitors can provide in the marketplace. Those networkers must know this.

 

You can’t really find the greatest success in your business without surrounding yourself with the best people you can find. Basketball legend John Wooden was quoted as saying,

“Whatever you do in life, surround yourself with smart people who’ll argue with you.” 

Sound advice from a true winner.

If you’ve been in the AGRR industry for a while you’ll remember one of the true gentlemen that help build it –Larry Anderson, President of Harmon Auto Glass back when it was a part of Apogee Enterprises, Inc. On his office desk in Minneapolis there was a small sign that read “Delegate Authority. Ruthlessly.” Larry surrounded himself with many of the best in the industry. There are some owners in the AGRR industry who don’t value the people that work for them. You can’t be successful if you don’t take care of those who work for you and let them have a voice.

 

Yet another inconvenient truth is that just because you have money, it doesn’t mean that you’re going to find success in the AGRR industry. History has proven that businesses owned and managed by those who have direct experience in the industry find the greatest success. Sadly, those that don’t have the experience, regardless of the size of their checkbooks, historically have tended to not be successful.

 

In writing my blog posts over the past year I’ve tried to raise issues about which I think those in the AGRR industry (or are associated with it) should give thought. I know that there are more inconvenient truths regarding the industry that no one likes to admit that I’ve not touched on, so please let me know what yours are.

Just sayin’……

 

  

 

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Just Sayin’ Blog – “Are you better off than you were four years ago?”

In the current presidential election season I’ve been seeing several news outlets play clips of Ronald Reagan in 1980 during the presidential election when at the end of a debate with then President Jimmy Carter he asked a question to the viewing audience,

“Are you better off than you were four years ago?”

The question Reagan asked was a seminal moment during that year’s presidential campaign with the majority of voters answering with a strong “NO” catapulting Reagan into the Presidency.

 

It made me think about how those who compete in the auto glass repair and replacement (AGRR) industry are doing this year compared to the past one, two, three or more years. Are you, your family or the company you work for better off this year than the past few years?

 

This past week I attended Auto Glass Week 2012 (AGW) in Louisville, Kentucky and while there I talked with a number of attendees who all work in the AGRR industry. I spoke with retailers, wholesalers, distributors, suppliers and networkers; and I didn’t get very many positive answers to the question “are you better off?”..… That’s not to say there weren’t those in attendance who felt that their company was doing better this year than over past years, but since I asked the question at an industry conference even people who aren’t doing better may be trying to put a more positive spin on their own story.

 

While at AGW I had several retailers tell me that they’ve been looking closely at what they’re currently allowed to charge to insurers for replacements versus their costs to acquire the part to be replaced, cost of labor and benefits, the cost of urethane (and primer cost if needed), fuel costs for mobile vans, insurance costs, etc. Each of them told a story that they had seen profit margins shrink over the last year or years. One retailer told me about a customer for whom he had replaced a windshield for a few years ago and again replaced the windshield in the same car. The customer happened to be insured with the same insurance company and they still had the invoice from the first replacement in the cars glove box. When the retailer looked at that prior invoice and then looked at the current invoice, with the pricing that he’s allowed to charge under the insurance pricing guidelines, he saw that he was getting less money today for the same replacement. More than a little surprised when he got back to his store he went back to look up what he had paid for the part and urethane from a few years ago versus his current costs and found out that he actually paid more for the part and urethane this time around too. So he got less for the sales invoice and paid more for the part and required supplies to install it; and that doesn’t even take into consideration the increase in all his other costs.

He started to question why he’s agreed to the pricing guidelines and was also giving consideration about whether he should pull out of or stay in the pricing/billing mechanism required to bill for work he does for the network that the insurance company uses to manage its auto glass losses. He asked me what I thought about that. His idea which might be beneficial to some, could also be a very risky strategy for others. Still it is an interesting question to ponder don’t you think?

 

While talking with another retailer he was lamenting the fact that gasoline prices are killing margins. That’s understandable since the price of gasoline has gone up over the past year and depending where you live regular gasoline is up $ 2.00 a gallon since 2009.

The average price of regular gasoline on January 29, 2009 was $ 1.84 a gallon as per a ConsumerReports.org.

As per the American Automobile Association Daily Fuel Gauge Report the average price of regular gasoline today is $ 3.81.

By the way, in 1980 the average price of regular gasoline as per the website 1980sflashback.com was $ 1.25.

The retailer said that the price he’s paying at the pump to fill up mobile vans, along with the delivery surcharge he’s being charged by his auto glass supplier due to the rising cost of gasoline is a killer; with no opportunity to pass those costs along to insurance customers.

 

One supplier complained about competition from foreign suppliers in the market with goods of “lesser quality and price” putting even further pressure on wholesale prices.

Another supplier talked about the market size shrinking and suggesting that surely some weaker competitors will drop out of the market this year which could certainly benefit the stronger competitors.

One supplier mentioned that this coming winter was going to be a good one (of course meaning a bad one) since acorns are abundant and that woolly worms are darker this year and not as light as last year….  I said, “What?” He went on to explain what he read in the Farmers’ Almanac. I went online and looked up both of these legendary prognosticators of a bad winter and he was right! The Old Farmer’s Almanac says that when woolly bear worms are darker in color it signifies a bad winter coming. I found in the Farmers’ Almanac a story on when there are more acorns than normal it can predict a rough winter as well. I’m not sure about either as true predictors of this coming winter’s weather, but maybe if we all also cross our fingers; find a four-leaf clover or a penny face up; knock on wood; see a rainbow; rub a rabbits foot and don’t step on a crack, break a mirror or open an umbrella indoors………  I think you get the idea.

 

Certainly other costs of doing business have gone up over the past year or more which most AGRR businesses are bearing with little opportunity for upside revenue to cover them. Many of us have lived through lean years and bountiful years in this industry. It’s always been that way hasn’t it? Hopefully the pendulum will swing back to an improved time for the AGRR industry in 2013.

 

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

– Charles Dickens, A Tale of Two Cities 1859

 

The reality is that the current marketplace demands that everyone in the AGRR industry find ways to deliver or provide a superior product and/or service offering via a low cost model to combat those who are willing to deliver or provide a poor product and/or service via an even lower cost model, if you want to survive.

 

So if you’re asked the question,

“Are you better off than you were four (or one or two or more) years ago?”

what would your answer be? Obviously you are the only one that can answer that question, but here’s hoping that you’re surviving all the turmoil that’s been experienced by many in the industry over the past few years. And that the upcoming year will have a definite swing to the better for you, your family and your business. Wouldn’t that be a welcomed change? You bet!

Just sayin’.

 

Cartoon courtesy of weblogcartoons.com

 

 

 

 

 

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Just Sayin’ Blog – Auto Glass Networks – Part 2

Cartoon courtesy of TomFishburne.com

In a recent blog post titled “Auto Glass Networks – Part 1” I wrote about difficulties that auto glass repair and replacement (AGRR) networks or TPAs face in managing auto glass losses for clients. In order to survive, networks and TPAs must manage a never-ending “effort to create some semblance of uniformity amongst a very large, broad and diverse set of participants” that actually do the auto glass repairs and replacements across the country.

In this blog I’m focusing on how networks attempt to demonstrate better performance for its clients versus what those same clients could achieve by directly managing auto glass losses.

The network does this by reporting on its operational “metrics”. Investopedia defines “metrics” as:

“Parameters or measures of quantitative assessment used for measurement, comparison or to track performance or production. Analysts use metrics to compare the performance of different companies, despite the many variations between firms.”

The reporting of metrics to clients begins with a network measuring:

1. How many rings or seconds it takes a network to answer a telephone call from someone reporting an auto glass loss;
2. How many seconds or minutes a policyholder is on hold while reporting the loss; and
3. How many total minutes a policyholder has to spend on the telephone reporting their claim.

Why are these three metrics important to a network? Most policyholders believe that they are talking directly to their insurance company when they call a network that manages auto glass loss for insurers; generally that’s not the case. Since the network customer service representative (CSR) is acting on behalf of an insurer while talking with a policyholder, the insurer expects that a network is providing the same level of customer service to its policyholders that the insurer would provide. These three metrics are ones that the network has complete control over and are important metrics to measure how responsive it is to the insurance company’s policyholder.

But networks aren’t only tracking the performance metrics of areas under its direct control while handling auto glass losses; each also provides metrics on the performance of the AGRR retailers that actually perform the auto glass repairs or replacements. Why track that performance? It depends of course upon the network, but keeping track of the level of service that the AGRR retailer provides can determine how much work the AGRR retailer may get in the future.

What are some of the metrics on which AGRR retailers are measured or should be measured?

1. The AGRR retailer that provides repairs or replacements is graded by its own individual customer service index (CSI). In determining CSI there are a number of key components and you’d like to think that a CSI score is the most critical metric that an AGRR retailer has in determining its value to a network. The basics of CSI is clearly spelled out via the RATER Model by tracking these five elements:
   1. RELIABILITY – A company’s ability to perform the promised service dependably and accurately;
   2. ASSURANCE – The knowledge, competence and courtesy of employees and their ability to convey trust and confidence;
   3. TANGIBLES – Physical facilities, equipment and appearances that impress the customer;
   4. EMPATHY – The level of caring, individualized attention, access, communication and understanding that the customer perceives;
   5. RESPONSIVENESS – The willingness displayed to help clients and provide prompt service.

Each network uses either its own questions or metrics for determining CSI or it may use CSI metrics that the client prefers used for its policyholders.  Ultimately these CSI metrics show which AGRR retailers are providing great service and those that aren’t based on what’s being measured. Do you know what your company’s CSI is for each network? If not you should ask.

2. What is the windshield repair percentage performed by an AGRR retailer? If the network believes that a policyholders broken windshield is repairable, does the AGRR retailer repair it or replace it?

Repair over replacement can obviously save big money and if you’re an AGRR retailer that ends up replacing a windshield that the network feels should have been repaired you’re making them look bad in the eyes of the client as it drives up the average cost of the claim.

If the network has a GAI (guaranteed average invoice) agreement with a customer when an AGRR retailer replaces instead of repairing a windshield, you’re costing the network money so you can anticipate fewer calls for your service or greater oversight of glass losses you must bill through the network. So your repair percentage is a critical metric.

3. How many warranty claims (problems of any kind while handling a glass loss such as customer call backs for leaks or air noises, scratched glass, improperly installed moldings, any damage done to a vehicle during the repair or replacement, etc.) does an AGRR retailer have on work performed for the policyholder?

Obviously the more warranty claims you have the higher the likelihood a network will not be looking for your company to handle glass losses on its behalf.

4. Customer service cycle time is also important. How long does it take for the policyholder to have a glass loss repaired or replaced from the first call reporting the loss to the time it takes to be completed and billed by the AGRR retailer?

That’s a pretty straightforward metric relating to service levels and customer care.

5. What is the percentage of dealer or original equipment manufactured parts (OEM) used in a replacement versus non-OEM parts priced via NAGS® (National Auto Glass Specifications®)? Why is this important?

If an AGRR retailer has a higher percentage of OEM glass versus non-OEM it is costing the network and/or the client a whole lot more money.

Now back to TPAs versus networks. There are certainly other important metrics that networks track and report to current clients and tout to potential clients that use other networks and TPAs. Every network presumably wants its clients customers serviced by the best AGRR retailers that provide the highest level of customer service, but let’s face it, price versus service unquestionably creeps into the decision-making process of what AGRR retailer is referred a glass loss or not by a network.

That can be especially true if the network is using a “buy/sell” or “spread” pricing model for its clients. The network “buys” the glass repair or replacement from an AGRR retailer and then “sells” the repair or replacement to its customer at a higher price or “spread” that covers the networks cost to operate plus its profit. Do you ever get those calls from a network asking, “If you just give me another point or two on the NAGS discount I can keep sending you jobs” with the implied message if you don’t……? Probably you have.

In my last blog titled “Network Participation Agreement – Special Update” I wrote:

“From the view of this blog, transparency only serves to benefit consumers in making informed claim decisions, making their policy dollars work to their fullest, and identifying safe auto glass replacement services.”

 How much transparency is there in how networks or TPAs report metrics? Well, last Friday glassBYTEs™ reported in a press release titled “Lynx Services Amends Contract Services Agreement” that the “Pittsburgh-based Lynx Services will amend its contract services agreement effective September 12. The most notable addition to the agreement is the availability of online scorecard access for shops. These scorecards will provide auto glass shops with performance records based on a variety of factors called Key Performance Indicators (KPIs).” This is definitely a big step in the right direction that allows AGRR retailers to see metrics (KPI’s) showing their performance. Perhaps other networks and TPAs will follow in a similar fashion? That should certainly be a welcomed change.

As I also suggested in my last blog, as an AGRR retailer you might want, “continue to focus on the customer and provide exceptional value with outstanding transparency.” In the long run exception value and outstanding transparency will pay off.

Just sayin’.

 

 Today marks the 11th anniversary of 9/11.

Never forget.

 

 

 

 

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Just Sayin’ Blog – Network Participation Agreement – “Special Update”

  Cartoon courtesy of TomFishburne.com

 

“Can’t tell the players without a scorecard”… an old school expression but those words seem particularly relevant today, as one looks at recent events surrounding the subject of auto glass networks.

In my recent blog titled “Network Participation Agreement” from August 6, 2012, I discussed the ADDENDUM announced by Safelite® on July 20, 2012 regarding its www.SGCNetwork.com Network Participation Agreement.  It stated in the last sentence of Section 1.10 of the ADDENDUM, “Further, Participant shall not offer, directly or indirectly, to any insurance agent or its personnel anything of value in consideration for the referral of work paid for from the proceeds of an automobile insurance policy.” 

In that post, I also asked “do you think that Safelite® is also a participant, having signed the Network Participation Agreement and having to follow all of the sections of the agreement? If yes, then Safelite® has to follow the same rules as everyone else. That seems fair right?”

I guess that question entered the spotlight sooner than I could have imagined with the publication of the glassBYTEs.com™ article from August 23, 2012 titled “Safelite Funds Allstate Windshield Repair Marketing Material” written by Casey Neeley.

In that story, an Allstate consultant is quoted as saying, “Safelite approached us about creating marketing material for our agents to distribute and the first run of such materials was funded entirely by Safelite and provided to our agents”.

Now we get to the scorecard part because I have to wonder “which” Safelite it is that is funding promotional materials. Would that be Safelite® Solutions LLC, the self-proclaimed “third party administrator” of glass claims, or Safelite Auto Glass®, the self-proclaimed “largest vehicle glass repair and replacement organization in the U.S.” After all, both those entities are involved – but as noted in the prior blog, it is just not very clear about the role that Safelite® Auto Glass plays in the equation, either with the insurance carrier or its agents. If you follow the link at the end of this sentence, Safelite® refers to all of its organizations as “A Family of Companies” (*referenced from http://scheduling.safelite.com/companies.jsp).  

While this distinction, or lack thereof, is not at all apparent from any public information I find on this subject, one thing becomes crystal clear – the auto glass repair and replacement (AGRR) industry could certainly use a whole lot more transparency. In fact, one could make the case that much of the recent legislation efforts have been focused on creating such transparency in auto glass claims transactions, with particular attention, rightly or not, on Safelite® and its “Family of Companies”.

From the view of this blog, transparency only serves to benefit consumers in making informed claim decisions, making their policy dollars work to their fullest, and identifying safe auto glass replacement services.

I guess I have to rephrase my original blog question to now ask, “Do you think that Safelite® [Auto Glass] is also a participant, having signed the Network Participation Agreement and having to follow all of the sections of the agreement?”

One can only hope that in the interest of transparency and consumer informedness, the players involved make it quite clear about the roles and participation as pertain to Safelite® Auto Glass, an entity portrayed as separate and distinct from Safelite® Solutions LLC. And there is one organization that could answer that question today.

For the rest of us, the best course of action might be to continue to focus on the customer and provide exceptional value with outstanding transparency.

In the meantime, not a bad idea to keep the scorecard close by to recognize the players on the other team, and act accordingly.

Just sayin’……

 

 

 

 

 

 

 

 

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Just Sayin’ Blog – Auto Glass Networks – Part 1

In my last blog I wrote about Safelite® Auto Glass and its SGC Network, which is one of the networks (or third party administrator -TPA) that operates in the auto glass repair and replacement (AGRR) industry in the United States. Safelite® released a new addendum to its Network Participation Agreement that outlines new guidelines or requirements  on AGRR companies that either participate in the SGC Network as sub-contractor’s that Safelite® uses to do repairs and replacements for Safelite® or those AGRR companies that are forced to invoice work they do for certain customers through the Safelite® SGC Network. A reader of that blog suggested that I write about networks in general, so here goes.

While Safelite® is the largest AGRR network it is by no means the only one. All AGRR networks share some similarities, but each is unique in how it operates. Since there is no single AGRR company that covers every square mile of the United States providing services solely through its own AGRR technicians to consumers, every network must attempt to aggregate the services of thousands of disparate AGRR service providers into a single “quasi-retail” service entity. Each of the networks attempt to replicate a full service AGRR company that looks like it is capable of servicing each and every consumer with a single price and service offering that suits the needs of every insurance or fleet company customer it has in its network. That’s where the problems begin.

The first problem a network has to manage is the reality that each of the AGRR companies that participate in its network are not under its control, so a network has to deal with inconsistency of service levels to its customers. That is an issue; a really BIG issue. Currently, a network attempts to counter inconsistencies by stipulating increasingly detailed and specific guidelines in its effort to create some semblance of uniformity amongst a very large, broad and diverse set of participants. How do the networks accomplish that? It takes a great deal of work to try to herd all those cats.  Some do it poorly while some are more accomplished at the task.

It’s quite the challenge though, and perhaps never so clearly indicated as by Safelite®’s recent addendum whereby it now seeks to go beyond standards of repair and replacement practices to actually regulate the business conduct of its participants. By venturing into this area it may seem as a case in point that the network may be leaning into “too big to fail” territory, as it tries to corral a wide range of participants into a single product offering. It is likely to be very difficult, if not impossible for a large network to monitor and enforce all of the stipulations on which it seeks agreement from its numerous participants.

It makes me wonder if the newest Safelite® addendum might actually be showing off some of the real challenges that at least one of the largest network entities is experiencing in trying to solve a problem and meet its entire customer needs.

As I mentioned, every AGRR network must attempt to cobble together its own group of AGRR service providers (participant) attempting to provide a service model that it hopes attracts its targeted customer(s).

That’s the networks strategy. Now how about your decisions as an independent AGRR retailer?  It’s probably best to make your own assessment of how network participation fits into your overall marketing and sales strategy. You may not be able to avoid networks altogether, as most insurance companies require that billing for the service provided be processed through a network. But remember, in all cases, it is the choice of every AGRR company to decide whether it will or won’t participate in the opportunity to receive repairs or replacements from every AGRR network. As an AGRR retailer, you may prefer to do work for one or more of the networks because the network provides value to you in exchange for the value you provide. Some AGRR retailers choose not to agree to the pricing or service requirements that a network has on participating. That again is the choice of the AGRR retailer. It’s probably not a good strategy if you’re relying on a network for your repairs and replacements, but if you do you should be consistently working on lowering your costs as you can be assured that the network will be looking for you to lower the value you receive for repairs or replacements.

Networks are an established part of the AGRR industry and they aren’t going to go away. Legislative initiatives may be attempted state by state to help regulate or moderate how networks operate, but networks do provide value to the customers that use them. Whether or not the networks that operate today will be in business five years from now will be determined by the value, service and quality that it provides to its customers. Only the strong will survive. More on how networks operate in a future blog posting.

Perhaps the best advice for today’s AGRR retailer is simpler than we all have been thinking: “focus intently on the customer, listen to what they need, and set about to do the right thing.” A very simple and straightforward concept.

Sam Walton is quoted as saying,.

 

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Stay focused on your customer and provide value to them and you should do okay.

Just Sayin’….

 

 

 

 

 

 

 

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