Posts Tagged OEM Glass

Just Sayin’ Blog – Disruption Innovation in Business

 

Clayton Christensen developed his disruption innovation theory studying the computer industry. Disruption in virtually any industry will determine winners and losers in business. If you visit the Christensen Institute web site you’ll read that:

“The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost are the status quo. Initially, a disruptive innovation is formed in a niche market that may appear unattractive or inconsequential to industry incumbents, but eventually the new product or idea completely redefines the industry.”[1]

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Courtesy of TomFishburne.com

At the annual Code Conference held at the Terranea Resort, located in Rancho Palos Verdes, California that brings together some of the world’s geekiest folks; Google’s Sergey Brin debuted Google’s driver-less car (link). These cars were designed without a dashboard, steering wheel or a brake pedal. Why? A driverless car doesn’t need any of those accessories in the cars of the future as seen by the visionaries at Google. Could this be an example of “disruptive innovation” that could affect multiple industries?

This Google designed driver-less vehicle is very different from the self-driving vehicles that Google equipped with the driver-less technology installed on the Toyota or Lexus models that Google first began using. The initial self-driving cars Google used were off –the-lot models made by original equipment manufacturers so each came equipped with a dashboard with all of the typical accessories you’d expect to find both on and under the dash. But this new Google car comes without many of the accessories deemed required, up until now, and Google added a few other things that you will find disruptive long-term. It evidently is equipped with a flexible plastic windshield.

The car can only top out at 25 miles per hour and you’re not going to be seeing it on the highways anytime soon, but nonetheless with Google behind it one can only assume that the company’s long-term goal is to dramatically change driving habits. Will this technology be successful in disrupting the car industry? It would take time and a lot of treasure, both human and monetary. Google certainly has the wherewithal to attract the best and brightest to make this project a reality and money isn’t an issue.

Experts believe a self-driving car will make driving safer. Imagine that you can text or talk on your phone to your heart’s content as you won’t need to be concerned about distractions. Human driving errors should be greatly reduced if all the other cars around you are interconnected resulting in greater safety. Older drivers would have more freedom which would be good for them and great for everyone else concerned about grandma and granddad getting behind the wheel. Disabled drivers would also gain new freedom to rely on themselves versus others. An EY Automotive study says that autos with Autonomous Vehicle Technology will surge from 4% in 2025 to 75% by 2035.

There are going to be winners and losers as self-driving cars gain traction in the coming years. What will greater safety and independence for everyone mean to the insurance industry and all of those in claims departments today if the number of accidents drops? To the collision and automotive parts repair industry? To the rental car industry? To the auto glass repair and replacement (AGRR) industry? To the trucking industry? Countless industries will be affected. There’s going to be a lot of businesses that will rise and fall with this disruptive innovation and a lot of people at risk of losing their current job in an industry affected by the self-driving car.

There will probably be a day when those who want to drive their own cars could be viewed similarly as today’s drunk driver or someone that is texting as they are putting self-driving car riders at risk.

What will the likely outcome be if Google’s self-driving cars become a “disruptive innovation” and disrupt car manufacturers, the transportation industry as a whole and change the habits of the driving public in the years to come? We’ll have to wait to see.

So is there something a company or companies are doing today (or will be doing) in the AGRR industry that is (or will) disrupt the way things operate? Are there innovations that will “completely redefine(s) the AGRR industry”? I think the answer is yes to both questions. There are plenty attempting to disrupt what it is you are doing today and I know that there are those trying to disrupt the future of the industry with new innovations.

Here is another definition of disruption innovation:

“A disruptive innovation[2] is an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.”

You probably think we already have enough disrupters in the AGRR industry, but what is your plan going to be if you’re not one of the one’s who has designed or is designing a “disruption innovation” in the industry? Something is certainly coming.

Just sayin’.

 

 

 

[1] http://www.christenseninstitute.org/key-concepts/disruptive-innovation-2/

[2] http://en.wikipedia.org/wiki/Disruptive_innovation

 

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Just Sayin’ Blog – Wind at Our Backs?

As we near the end of the first three quarters of 2013, it appears that we may have some wind at our back. There has been some slight improvement in a couple of the key drivers of the automotive glass repair and replacement (AGRR) industry. The key drivers of the AGRR industry are weather, the economy and miles driven.

How Optimism Works

The Old Farmer’s Almanac has been published since 1792 and is “North America’s most popular reference guide and oldest continuously published periodical”. Forecasting the weather is a specialty of the Almanac and the publication touts an 80% success rate at correctly forecasting winter weather. The Almanac recently published the weather maps for 2013 – 2014. The Almanac is forecasting the following weather for regions they report for this coming winter:

  • The Northeast a winter milder in the North and colder in the South with slightly above average snow in the region;
  • In the Atlantic Corridor a colder winter with snowfall above normal;
  • The Appalachians will see a colder winter with snowfall near normal;
  • The Southeastern United States will see colder weather and above normal snowfall;
  • In the Lower Lakes temperatures will be slightly milder with below normal snowfall;
  • In the Ohio Valley area winter will be colder, along with below normal snowfalls;
  • The Upper Mid-West will be a mixed bag with a warmer winter in the eastern part and below normal in the western part of the area. Snowfall will be above normal;
  • The Heartland will be colder than normal this winter and snowfall near normal;
  • The rest of the country is expected to be colder than normal with average to above average snowfall;

All-in-all a mixed bag with the weather and I hope that wherever your business is located you’re benefited by a colder and snowier winter.

The economy is also a bit of a mixed bag. Positive news came from new car sales which can be an important factor in an improving AGRR industry. J.D. Powers detailed year-on-year improvement in new-vehicle sales in the United States by reporting in their August 2013: Monthly Automotive Sales Forecast that “August new-vehicle sales reached the highest level in seven years.” The report went on to state, “New-vehicle retail sales in August 2013 are projected to come in at 1,270,400 units, 12 percent increase from 2012”. That’s great news for the AGRR industry. J.D. Powers is predicting growing new-vehicle sales for the remainder of 2013 and well into 2014. Really great news for the AGRR industry!

CNNMoney reported this past week in an article titled, “Jobless claims fall to 7-year low, but…” the rate of unemployment showed signs of dropping which is great news, but is tempered with the suggestion that it’s a result of people continuing to drop out of the work force. There are “11.3 million Americans who remain unemployed” the article reported with “three unemployed people for every job opening”. As with the weather, unemployment figures vary by region so its how your local economy is doing is what could affect how good your business will be in the next year.

The price of oil and how oil prices effect gasoline prices is another key part of the equation for the AGRR industry. As reported by the United States Energy Information Administration in the “Gasoline and Diesel Fuel Update”, prices year-on-year through September 9, 2013 on regular gasoline show that prices are down $ 0.26. Lower gasoline prices are great for both the consumers we rely on for business and for all of those company vehicles providing mobile service. Hopefully the price of gasoline will stay low.

You can look at reports from the U.S. Department of Transportation – Federal Highway Administration (FHA) as positive or negative depending where you reside. The FHA showed in its June 2013 Travel Monitoring and Traffic Volume Report that year-on-year miles driven were relatively unchanged with a slight decline of 0.1% from June 2012. The news that miles driven is not showing growth wasn’t great news for the AGRR industry that thrives on vehicles out driving on roads, but staying level was better news than a drop.

So how are these three key drivers affecting your business and do you think the wind is at your back? Regardless of whether the wind is at your back or not, I think there is a fourth key driver to your business and it is the most important one for finding success in your business. That key driver is you. So how are you going to take advantage of the marketplace you compete? What is it you’re doing to make your business stand out among all those with whom you compete?

I’ve written in previous blogs “The Times They Are (Always) A-Changing” and “The Times They Are (Always) A-Changing – Part II” about the opportunities in the marketplace for AGRR companies. I strongly believe that there are opportunities for independents in our industry, but you’ve got to surround yourself with the best people and make sure that they are all committed to the goals and aspirations that you have for your business. If you haven’t got that you’re going to be struggling.

What else are you doing to separate yourself from your competitors? Look for ways to be successful and be relevant in your market so that you stand out. There is a recipe for success in your market and you’ve got to figure out what it’s going to take to make sure you find and keep being successful. It starts with you as you’re the key driver of your business.

If the three key drivers are beginning to turn to your favor and with the possibility of the wind at our backs, what is it you’re going to do in the next year to see that you not only survive, but thrive in the AGRR industry? It’s really up to you.

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 – 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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 thePittsburgh-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 – A Lesson in Perseverance

(Autographed Pin Flag from Ernie Els last major win in 2002 at The Open Championship held in Scotland)

Perseverance is a key trait to achieving success in any undertaking. It doesn’t matter if it’s a personal one or one that you have in your business life. It doesn’t matter whether the undertaking is a big or small one. The ability to maintain an unrelenting focus on any goal that you are pursuing requires you to work through the difficulties and obstacles that confront you.

This past Sunday you saw that trait in the 2012 Champion Golfer of the Year – Ernie Els – by his winning The Open Championship that was played this past week at Royal Lytham & St Annes Golf Club in Lancanshire, England. The Open is the 3rd of the four majors (The Masters, The U.S. Open, The Open Championship, and The PGA Championship) which are held each year and where winning one of them defines a PGA Tour player’s career.

Sunday’s final round was a test for the 83 tour players who had made the cut after the end of the second round on Friday. Only Ernie and 8 other players were able to shoot under par on Sunday with Ernie carding a 2 under par. After 72 holes were played during The Open Championship this year only 18 golfers scored level par or better. Ernie was able to put pressure on Adam Scott who had started the final round in the lead at 11 under par and who led the tournament through 16 holes. Ernie made a crucial birdie putt on the final hole of his round that placed added pressure on Adam Scott who ended up bogeying the final 4 holes on Sunday and saw his goal of winning his first major championship slip away.

Ernie Els is a storied professional golfer who has certainly had great successes in his 22 year career, but at 42 years of age he hadn’t had a win on the Professional Golf Association (PGA) Tour since 2010 (the Arnold Palmer Invitational) and earlier this year he was questioning whether he would ever be able to find a way to win again, let alone win a coveted major. With all the success Ernie had achieved in his career he seemed to have lost many of the considerable natural talents, along with ones he had developed over years of practice that together made him a successful PGA Tour Pro. Over the past several years he changed a number of people he surrounded himself with who he felt could help him find the right mix of ingredients that would allow him the opportunity to win again. As he focused on 2012 he had a number of heartbreaking near misses at winning tournaments which would have allowed him to gain an invitation to The 2012 Masters Tournament, a tournament which he had played for 19 consecutive years. Having suffered that professional setback to his career Ernie continued to work on his game, despite many opining that his career was over or certainly had to degrade to a level where he would be unable to again regain the level of play he had achieved.

Ernie’s ability to utilize all of his talents to emerge as The Open Champion this year is a testament to his perseverance. After winning he thanked his wife Leizl, along with his daughter Samantha and his son Ben for all the support they give him. Ernie also thanked a number of others who stood by him as he worked his way through the many issues that he faced in his journey to again win. And winning a major; a feat he felt he may have never achieve again, but did with hard work, dedication and perseverance.

If you operate a business in the retail or wholesale automotive glass repair and replacement (AGRR) industry; or if your business sells products to those in the industry, 2012 has probably been a year full of difficulties and obstacles requiring you to show perseverance. As I mentioned in a recent blog titled “Hopes for the New Year (Summer Update)”, the key drivers – the weather, the economy and miles driven – have not been trending positively this year and have been affecting many (6 out of every 7 of you in a recent survey question I asked) in the industry. Without those key drivers being a help to many in the industry, business owners and those who lead organizations are required to find solutions which will allow them to survive the negative environment we find ourselves. How you persevere and deal with the issues your business faces today will have a long-lasting effect on your business and for all the people who work for you. The various steps that you’re taking now will unquestionably determine whether your company will be able to take advantage of opportunities that will certainly exist in your market when the key drivers turn positive and business improves. What steps are you focusing on in your business to ensure that you’re in position to take advantage of your competition when the current environment begins to improve?

Ernie Els didn’t lose sight of what was most important for him to focus on during Sunday’s final round at The Open and that was his own game. He could only do his best, making the best decisions in ensuring that he played at the highest level he could which would allow him to post the lowest score possible and put him in a position to win. Ernie was able to accomplish that by changing his strategy on how he was going to play those final 9 holes. He knew he was lagging behind and that Adam Scott was leading by 4 strokes with just a few holes to play. Ernie decided that he would become aggressive in how he played those final holes. At age 42 he never lost hope that he could play with against the best golfers in the World and find a way to win. By utilizing skills he had accumulated over his lifetime; and with the help of those he surrounded himself and trusted most he once again found the path to success and to win and win a major.

It certainly isn’t easy to make the hard choices that business owners or business managers must make in order to be fully prepared for when business does improve, but those who just sit by and watch their market share dwindle as they hope for better days aren’t going to be in a position to take advantage of opportunities when they do appear. You have to be able to take an honest look at your business and assess the value proposition that your business brings to customers in your market, you have to evaluate the capabilities of your competitors and take all of the appropriate steps that you can to ensure that you are positioned correctly, which will allow you to take advantage when things do improve in your market.

Ask those people closest to you that you trust and respect for their opinions; solicit their honest views of the pros and cons of your abilities, of your company in the marketplace, ask them about their views of your fellow workers. Are you marketing your company properly? Are you just copying what your competitors are doing or are you trying new things to improve how your business operates? You can’t just sit back and hope for the key drivers to improve because they might not improve fast enough, you certainly can’t just sit back hoping that a competitor or two in your market will falter or that something else will somehow happen to improve your business prospects. You have to focus on what can you do to improve your business; without worrying what others are doing around you. What steps can you take to ensure that you’re ready when things turn positive for you in your market?

You will find that by your continually working hard to find ways to improve how you market or position your business to your customers, making sure that you have the right mix of talented people to work with you in your business and then ensuring that your business is operating as a “low cost” provider in your market that you will be prepared to find new success and to win in your marketplace when the key drivers begin to improve. Work through difficulties and obstacles that you face so that you can persevere.

Admittedly, sometimes even by working hard and being dedicated to your business things may not work out for you, but you can’t stop trying. Ernie Els never gave up on his goal. He believed that if he worked hard and continued to tweak his game; he’d find a way to beat his fellow competitors and win again.

So can you.

Just Sayin’……

 

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Just Sayin’ Blog – Interview with Marc Talbert – Guardian Auto Glass

Today I’m talking with Marc Talbert, Vice President and Managing Partner with Guardian Auto Glass, LLC.   Marc was formerly the president of PGW Auto Glass Wholesale, LLC until he left the auto glass manufacturer and wholesaler in late 2009. In the Fall of 2010 Marc, along with Jim Latch (a former executive with PGW Auto Glass and PPG Industries, Inc.); and Jerry Ray and Neil Smith (who passed away on June 17, 2011) who together were founders involved with Glass Pro and Elite Auto Glass formed a partnership titled LRST LLC. The four equal partners joined with Guardian Industries and LRST was given the management responsibilities of Guardian Auto Glass, LLC. This unique partnership was formed to grow the number of stores under the Guardian Auto Glass banner. The goal is for Guardian Auto Glass to provide automobile glass repair and replacement (AGRR) services using a local ownership/management model. The model looks very similar to the one that Wes Topping and his partners (including Jerry Ray and Neil Smith) used to rapidly grow Elite Auto Glass across the western United States before selling to Belron in 2005. Guardian Industries Corp. had owned the platform for years.  At this time Guardian Auto Glass operates over 90 stores in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Ohio, Pennsylvania, Virginia and West Virginia.

DR:  I know that you and your partners have been busy the past two years working on growing Guardian Auto Glass and I appreciate you taking the time to talk with me today Marc.

MT:  Thank you for the opportunity to participate.

 DR:  What year did you get your start in the AGRR industry and what was your first position in the industry?

MT:  My ARG (automotive replacement glass) experience began in 1994 as manager of PPG’s branch distribution centers in Dallas/Ft Worth.  I started my career with PPG in 1980.

 DR:  What were the positions and responsibilities you’ve had since you first started in the industry in 1994?

MT:  I relocated to Southern California in 1995 as manager of PPG’s western distribution locations, then to Pittsburgh in 2003 with responsibility for PPG Auto Glass, LLC.

 DR:  Which of those jobs did you find most interesting and why? And which was the worst one and why?

MT:  Honestly all were equally interesting because they presented increasing challenges and responsibilities.  Working in the field for the first 23 years of my career I anticipated the move to PPG’s corporate office would be the most intimidating, but I was fortunate to work with some very good people who made the transition much easier, and even enjoyable.

 DR:  You left PGW Auto Glass in 2009 as a President and your responsibilities at PGW included wholesale sales and distribution for the company. What made you jump from the wholesale side of the AGRR industry to retail?

MT:  I had the opportunity to partner with Jim Latch who I had worked with at PPG and two of our long-time customers Jerry Ray and Neil Smith.   Jerry and Neil brought significant and successful retail experience along with a proven business model, and together we saw an opportunity to partner with a company like Guardian to expand their retail business.   There remains quite a gap between the largest US retail provider and the next largest and one of our goals is to try and reduce this gap.

DR:  About a year after you entered the LRST partnership Neil Smith sadly passed away. Did his passing change the plans you’d made in your goals at Guardian Auto Glass?

MT:  Neil’s passing was certainly a shock to us and we miss his experience and counsel every day, not to mention his humor.  Our plans to grow Guardian Auto Glass will be more difficult to achieve without Neil but we have not altered our plans.

DR:  What are your key responsibilities at Guardian Auto Glass?

MT:  Jerry and I share the responsibilities for new market growth and acquisitions, and Jim has responsibility for managing the legacy Guardian locations and our administrative support center in Worthington, Ohio.  We all share responsibility for the management of Guardian Auto Glass.

DR:  Did you find the retail side of the AGRR industry a little harder than you had expected it to be?

MT:  I think you ultimately have similar issues with retail and distribution, or any business for that matter.  As you effectively pointed out in a recent blog you try to attract the best people and provide enough support for them to succeed without bogging them down with non-value added work.  That is the focus of our business and the core of our local ownership model, and what we believe differentiates Guardian Auto Glass in each of our markets.  Having local owners with a stake in our collective success changes many aspects and costs of traditional corporate management, and we believe is the key to growing profitably. 

The primary difference we’ve learned in retail is the need in some cases and with certain third-party administrators to retain customers who have chosen a Guardian Auto Glass location to complete work we’ve already sold through our local marketing and customer relationships.   This is a dynamic we did not face in distribution and one we are increasingly concerned with.

DR:  How many brick and mortar locations did Guardian Auto Glass have before you partnered with Guardian on this new venture versus the number that the company has today? How are you doing on achieving the strategic goals that were set for the first two years of the venture?

MT:  We currently pay rent at over 90 locations and I believe Guardian had 25-30 locations when we started.    The economy and lack of weather is certainly not generating a tailwind for us this year but we have continued to expand as anticipated and build a competitive infrastructure.

DR:  Many in the industry are waiting for Guardian Auto Glass to do something with the call center/third party administration (TPA) that you operate, especially with Jim Latch participation in the partnership. Does Guardian Auto Glass have any plans to become a bigger factor in the call center or TPA side of the industry?

MT:  Guardian’s network is not part of Guardian Auto Glass and is not operated by LRST.   As you point out Jim’s experience in this area provides a unique opportunity for us and we anticipate working with Guardian’s network to help expand both businesses. 

 DR:  What advice can you offer other retailers on how to successfully compete against Safelite®?

MT:  I don’t think we are in a position to provide advice to anyone, but we are concerned as I’m sure many ARG retailers are with maintaining access to our customers who have chosen to have their vehicle glass serviced by one of our Guardian Auto Glass locations.   We will continue to direct our efforts and investments in building our local customer relationships, and retaining access to those customers will be an area of increased focus for us going forward.

 DR:  Where do you see Guardian Auto Glass in 5 years? What will make you and your partners feel that it will be a success?

MT: Our mission is to grow profitably through our local ownership model and to continue our expansion, so we will need to see how we measure up at the end of our 5th year.   We remain excited about the opportunities in the ARG retail market and will continue to seek strategic partners and existing businesses in all markets to help us reach our goals. 

 DR:  How’s your golf game coming along? I know that in some circles you’re considered to be a tough guy to beat in a game.

MT:  Must be very small circles, however I would welcome a rematch with you and others free from the constraints of customer golf.

DR:  Perhaps. I look forward to the opportunity to a rematch. Some of my team members I’m going to change out, as I would guess you will too. Loser pays?

Thank you again for taking the time to talk with me Marc. I know that many in the industry are looking for someone, some company to step up and take on Safelite. Perhaps Guardian Auto Glass can be one that does. Good luck in achieving the goals that you have for Guardian Auto Glass.

Just sayin’….

98

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Just Sayin’ Blog – Decisions

A couple of weeks ago my mother experienced shortness of breath along with chest pains. Two hours later she called her sister who lives close by and told my aunt she was thinking that she should go to the emergency room. They could’ve called 9-1-1, but instead together they made the decision to have my aunt drive my mother to the closest emergency room in a hospital about 30 miles away.

My aunt is 91 and my mother is 90……

They made it to the E.R. and after a few days in hospital my mother was released and is doing fine. I talked with them about whether they thought they really made the best decisions to drive down themselves based on the symptom’s my mom was experiencing, the fact that ambulance service was readily available and that it was snowing that day. I hesitated to mention their age to them.

They both are very independent women who have great genes. I’m very happy that they both are very independent and it’s great that they rely on each other, but they reluctantly agreed that they probably made a bad decision even though it turned out okay so it wasn’t that bad of a decision. I suggested that perhaps they should’ve called 9-1-1 and they said that next time they would. I’m not so sure they will though.

If you look up the definition of decision in the Merriam-Webster Dictionary you will find:

“a determination arrived at after consideration”.

We make countless decisions every day just like my mom and aunt did. There are good decisions and bad ones, and all are based on a myriad of bits and pieces of information that we take into consideration. Most decisions we make are uneventful, but some carry great consequence for those who can be affected by them. Consequential decisions are often forks in the road and generally require more information and greater evaluation of the right or wrong road to follow. Those consequential decisions will most likely be based on the values or principals you hold. They therefore provide a clear view of who you are and what is truly important in your personal and business life.

You can be decisive in your decision making or you can hesitate and be indecisive.  Indecision makes all decisions more difficult because when you’re uncertain, unsure of your decision, it will often lead to less-than-positive results. Even after giving great thought and consideration to a decision it can turn out badly, but with careful consideration and a look at all the information available, those difficult decisions you make tend ultimately to be the right ones.

If you’re an auto glass shop owner or manager you make decisions relating to whom you hire to work for your company. You decide what kind of on-going training you provide to your employees. You decide the quality of the auto glass you buy for them to install and you make a really big decision on the urethane adhesives that you buy for your auto glass technician (AGT) to use when they install windshields for your customers.

Does the urethane you buy cure in 1 to 4 hours and provide a safe drive away time for your customers and their passengers? Do you tell your customers when their vehicle is safe to drive? Is it really safe for them to drive? As the shop owner it’s your decision. You make a decision on whether your company will join the Auto Glass Safety Council and follow the Auto Glass Replacement Safety Standard – AGRSS® as a registered company or not. If you become an AGRSS Registered Company you open your doors to an independent 3rd party validation process proving that you adhere to AGRSS®. That decision is important to all consumers who expect that their auto glass replacement is installed safely. I strongly feel that supporting the Auto Glass Safety Council is an easy decision for anyone who provides auto glass replacements to consumers. What do you think?

Your AGTs are responsible for making decisions when they are installing auto glass too. An AGT could make the decision to take a short-cut during the installation, or he could go forward and complete an installation of a windshield where a rust issue exists which could cause an adhesion problem effecting the safe installation of the glass. Or he could contaminate the surface of the pinch-weld or glass, he could use an outdated urethane which could affect the adhesion of the glass installed, etc. Whether your company is a small one or the largest, you have AGTs making decisions that affect safety with each install. Are they making the right decisions for your customers?

When an insurance company makes decisions regarding which company it chooses to replace auto glass for policyholders, what information do you think it uses to make those decisions?  What information do you think is important for agents or brokers who are in a position to recommend auto glass service providers to policyholders? 

What are the key drivers for these decisions?  Quality should certainly be the key driver. Price is also certainly a factor as is the importance of an efficient claim handling process for the insurance company, agent and/or broker.  The service and convenience provided to the policyholder should also be a factor in the decision making of those who are in a position of influencing where a policyholder has their glass replaced. Neither the steering of a customer to a particular AGRR company that also happens to be answering the call for the insurance company nor the practice of handing a gratuity to the agent/broker should be a part of the decision-making process. Sadly it is. What do you think the key factors for those making these important decisions should include?

We all have had to make many consequential personal and/or business decisions over the years. When we make those consequential decisions they often affect not only you and your family, but they also often have an unintended effect on others too. They aren’t easy, but they say a lot about your character.

The last stanza of the poem “The Road Not Taken”, penned by the great America poet Robert Frost says:

I shall be telling this with a sigh

Somewhere ages and ages hence:

Two roads diverged in a wood, and I—

I took the one less traveled by,

And that has made all the difference.

Just sayin’…….

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Just Sayin Blog – Be Smart In 2012

There have certainly been a number of events happening since the first of the year that are effecting or may affect the auto glass repair and replacement (AGRR) industry in 2012. Where to start? Well let’s see:

 

1.    First the earth shook on January 2, 2012, when Safelite® Solutions officially took over the responsibilities for administrating Allstate® Insurance auto glass claims from PGW Lynxservices®. By all accounts Safelite® Solutions must be doing a masterful job in this new role administering claims for Allstate® as I’ve heard from a number of you that your auto glass claims from the second largest insurer in the United States are dramatically lower since the administrator change took place. Mild weather could also be a contributing factor. Adding to the pain of lost units, the pricing for those Allstate® replacements are also lower.

 

Have you seen your auto glass claims with Allstate decline since January 2, 2012?

 

2.    On January 6, 2012, glassBYTEs.com™ reported that Grey Mountain Partners Acquires Binswanger. Binswanger is a truly amazing full-service glass company with its roots going back to 1872 with its first location in Richmond, Virginia. It is certainly great news to hear for all of the Binswanger employees that they have a new owner who is interested in working with them to help build the company. I think that a strong Binswanger is healthy for the glass industry in the United States.

 

How about you?

 

3.    Neil Duffy recently announced in his very well written blog View From The Trenches that he’s considering a new career by starting a ‘new third-party glass claims administrator’. It sounds as though he’s thought it out pretty thoroughly by looking at all the pros of this new venture and I for one think he should go for it. I don’t see any cons.

 

What do you think?

 

4.    Then there is that anonymous letter from a ‘Concerned Citizen’ that surfaced yet again last week titled “New Anti-Trust Concerns”. This letter had a postmark from Bloomington, Illinois, and its resurfacing at this time might have some relationship to #1 above.

 

It does seem pretty obvious that the letter was written by someone in the auto glass industry as no one else would really care about the issue. The letter does raise a number of interesting points, but the conclusion of the ‘Concerned Citizen’ is that:

 

‘While the relationship between a TPA and its insurance company clients may not be illegal, the abuse of that position could be unfairly excluding independent competitors.’

 

There are a number AGRR initiatives taking place in various states where attempts are being made to try to restrict the big guy from taking your lunch money day in and day out. If one of them was successful it would certainly be good for independents in the industry.

 

Are there any legislative initiatives happening in your state that will be of any help to you in your business?

 

5.    For those of you who happen to follow @Safelite on Twitter you may have seen them sending out ‘Tweets’ asking for your input. One ‘Tweet’ poses a question to its followers and directs you to a web page survey question asking ‘How likely are you to recommend Safelite?’ Safelite® gives you the opportunity to answer with a ‘Not Likely’ – 0 score to an ‘Extremely Likely’ – 10 score.

 

I’m not sure to whom exactly Safelite® is targeting the question, but you’ve got to provide an email address in order to answer the question which is somewhat problematical. If you’d like to offer your view anonymously I guess you could use a fake email address.

 

I know what my number is in answer to the question. What number would you mark as your answer?

 

6.    And finally there was an article in the Chicago Tribune on January 18, 2012, reporting that the average age of vehicles in the United States has climbed to 10.8 years. The article stated that in 2010 the average age of vehicles was 10.6 years with the average age of vehicles having climbed steadily since 1995 when it was at 8.5 years. Over the past several years low new vehicle sales has certainly been a major factor in the increase in the average age, but with new car sales picking up new car manufacturers are expecting a great year in 2012. That will help to slow the growth in average age and hopefully bring it down. What does average age have to do with the AGRR industry?

 

One byproduct of an aging vehicle fleet is that you see an increasing number of the ‘do nothings’ (consumers that delay replacements) when auto glass breaks. Consumers obviously will be more accepting of a repair over replacement if the vehicle is older. New vehicles typically provide a higher average invoice value since the only replacement glass initially available to consumers will be auto glass manufactured for the vehicle by the Original Equipment Manufactured (OEM) glass company (i.e. Pilkington-NSG, PGW, Saint-Gobain Sekurit, etc.). The cost for non-OEM manufactures to reverse-engineer a replacement part for new vehicles is initially too expensive due to the low volume of parts needed in the aftermarket. The older the age of the vehicle fleet the more opportunities for non-OEM suppliers to sell reverse engineered replacement parts that are typically cheaper than the OEM’s. Ultimately that can mean less profit for the AGRR industry as a whole. New vehicle sales should mean more profit opportunities for those in the AGRR industry.

 

What do you think?

 

 

I hesitate to mention other things going on so far this year that may have an effect on your business like the lack of a severe winter in the East, the predictions for much higher gasoline prices later this year, a sputtering economy, the price changes that have taken place in the State Farm® Insurance Company auto glass program and various people coming and going from here to there. How you’re dealing with the variety of issues that you’ll face in 2012 will determine how you survive the year. Someone I’ve known for a long time in the industry commented to me last week that, ‘2012 is shaping up to be a watershed year for many in the industry. Survive this year and hope that next year will be a better one.’ That outlook makes sense to me. We’ll see if he’s right.

 

In closing, a former Princeton University men’s basketball coach by the name of Pete Carril wrote a book titled “The Smart Take from the Strong”. It’s a great book. Pete Carril was 5’6” tall, he was an All-State Pennsylvania high school basketball player, an Associated Press Little All-American in college and he coached at Princeton for 29 years before going on to the NBA to become an assistant coach for the Sacramento Kings. Coach Carril is also a member of the Naismith Memorial Basketball Hall of Fame. When he was young man his father told him:

 

            ‘The strong take from the weak, but the smart take from the strong.’

 

So be smart in 2012!

 

Just sayin’…….

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ZIP Code based pricing

About a month ago on November 14, 2011, Nydia Han (link), a television news reporter for the local ABC Channel 6 Television affiliate WPVI in Philadelphia, reported on that station’s nightly news program about the auto glass replacement pricing by zip code strategy that, according to the station, Safelite® Auto Glass was utilizing in the local market.  It was certainly interesting and entertaining to watch the 4+ minute “Action News Investigation” segment that Ms. Han presented on the television stations ABC News Channel 6 “Special Report” (link).  During the segment she asked this question:

“Is it fair for a company to charge you more for its services based on where you live?” 

ABC Channel 6 visited a Safelite® store location in Cherry Hill, New Jersey, asking about replacing a windshield and reported that they were told – “So book it online” – by the store.  She did just that by getting on a computer and going to the Safelite® “Get a quote” web page. It was there that she found that she first had to put in a zip code as required by Safelite® in addition to other required fields detailing the make, model and year of the car; along with the piece of glass she wanted quoted.  Based on her report she then started to put in a number of different zip codes in the area serviced by Safelite®.  Ms. Han reported that what she found was that “for the SAME windshield replacement on the SAME car at the SAME Safelite® shop” she got a number of different prices, depending upon the zip code used for the quote.  She reported that the prices varied about $ 80 for the same windshield replacement on the same car and the question she asked was does that pricing strategy model seem fair to consumers?

Based on the television stations investigation and report, the director of Philadelphia’s Consumer Affairs Lance Haver believes that it is not.  As Mr. Haver said in the report:

“It’s just wrong.  There is no two ways about it.  This is just wrong.  It should be one price for everyone; it shouldn’t depend upon where you live and how much they can gouge out of you.”

So why did Safelite® use zip code pricing?  Their spokesperson Melina Metzger was quoted in a glassBYTEs® article¹ as offering the following in response to WPVI’s investigative report saying:

“Pricing strategies are confidential.  This is a case of an investigative journalist attempting to create scandal where there is none.

Like all businesses, Safelite uses a dynamic consumer pricing model that fluctuates based on many variables, such as what other competitors the customer might choose to repair or replace your vehicle glass, the availability of a technician in [an] area, and the availability of the right part in [an] area. At Safelite, we believe our consumer pricing model to be fair and offer value.”

Okay, Safelite® certainly has the right to use any pricing model it would like to achieve its goals as does any other company.  It is an interesting model when someone on one side of a street who has the same car as someone on the other side of the street can be charged different amounts for the same item quoted and installed by the same store.  But in Safelite’s® defense, doesn’t every company have the right to price its products and services anyway it wants?  Even if the same store location actually does the work and/or those two different people in two different zip codes who might live across the street are sent the same installer to do the work on the same year, make and model of car?

I looked at a number of other auto glass repair and replacement retailers operating in a variety of markets as Safelite® and each of the retailer web sites I visited asked for a variety of customer information along with details of the car and what glass was needed to be replaced.  The web sites I looked at asked for zip codes only to determine what store was closest to the customer.  None offered quotes online.  Each of those web sites also said that a customer service representative would be in touch via email or the telephone to follow up on the quote request from the customer.

Then I visited a number of other web based auto glass replacement quoting sites.  Each of the web sites I visited requested zip code information (In all fairness to them it appeared that none of the ones I looked at actually operated auto glass shops themselves and were aggregators selling customer replacement opportunities to others who would do the replacements).  Those sites require the zip code in order to know where the customer asking for a quote for auto glass replacement service is located. This is so that the web site can make contact with the appropriate retailer(s) who will actually be doing the work for their price quote.

I’m not sure what other businesses use zip codes in pricing models, but since I had some spare time I did a little unscientific survey of local Chicago area businesses where I live by walking around to a number of Walgreens Drug Store locations in different zip codes in the downtown Chicago area where I did a store-by-store price comparison on a variety of non auto glass products.  For my very unscientific survey I chose three different products

  1. a 7.8 ounce tube of Crest® Pro Health Fluoride Toothpaste Clean Mint ($ 4.99),
  2. a 6 ounce box of my personal favorite GOOD & PLENTY® Licorice Candy ($ 1.59),
  3. and a 100 count bottle of Genuine Bayer® Aspirin 325 mg Pain Reliever ($ 6.79).

Granted those retail items aren’t even remotely close to windshields, but I did say my survey was unscientific so I took some latitude.  Anyway, I found that with all of the Walgreen stores that I visited in my survey area, the prices were actually the same for each of the products surveyed.  I also checked their online web site where I found prices were the same. 

I then extended my survey to a few other online web sites.  I visited two very popular retail web sites called Amazon® and the iTunes® Store.  Neither asked for my zip code to determine pricing for the products I checked.

One last observation I made when visiting the Safelite® “Get a quote” web page.  I found it interesting and wondered why they asked the question:

“Are you thinking of filing an insurance claim?” 

If you respond – yes – you’re then asked to provide the name of your auto insurance company from a long alphabetized drop down listing.  Under that drop-down box there is a statement:

Asking your insurance provider about your policy coverage and deductible is not considered filing a claim in most cases. We can help you with information regarding your insurance coverage. (You can always change your mind before your appointment.)”.

It was easy getting a quote when I didn’t say that it was an insurance claim.  It wasn’t as easy when I answered that I was filing an insurance claim.  Do you think that the price would be the same if you said it was for insurance versus if it wasn’t for insurance?  I was just wondering and I’m…..

Just sayin’………

 

1  Articles reporting on Ms. Han’s ABC Television affiliate WPVI in Philadelphia’s report that appeared in glassBYTEs® Auto Glass and Insurance Industry News on November 15, 2011, and on November 16, 2011.

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