Archive for December, 2011
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Mike Paley is someone I think you should get to know. He experiences all of ups and downs of being an entrepreneur in the auto glass repair and replacement (AGRR) industry. Mike is the owner and president of Freedom Glass, an independent auto glass repair and replacement business providing auto glass repair and replacement services to customers in the greater Richmond, Virginia area markets. He started his AGRR business in 2004 after working as Service Manager at a car dealership in the Midlothian, Virginia area. Mike served as a Gunnery Sergeant in the United States Marine Corps, where one of his assignments was the business of recruiting. His patriotism remains steadfast, as is evident by his aptly named business, Freedom Glass and its red, white and blue colors.
Last year at the 2010 Auto Glass Replacement Safety Standard® Council (AGRSS®) Conference, held in Oakbrook Terrace (Chicago), Illinois, Mike was honored for having the first auto glass company to successfully complete the AGRSS® independent third party validation process with a 100% score on November 11, 2009. I know that it takes a lot of work to make sure that your organization follows AGRSS® and being the first company to be validated and pass the validation with a score of 100% was an amazing feat.
Additionally, at the September board meeting of the AGRSS® Council Mike was elected to the Board of Directors of AGRSS®.
On a personal side, Mike is the proud father of three sons; Jason, Justin and Austin, all of whom reside in the Richmond area.
First let me thank you for your military service Mike. I’d then like to congratulate you for being the first AGRR company to be validated by the auto glass safety organization. Sadly, that is one experience (or risk) that many in our industry are unwilling to allow their companies to have.
With an estimated 45 – 50% of the auto glass that’s repaired or replaced in the United States being installed by independent single owner businesses, Freedom Glass is a great example of the vast number of auto glass repair and replacement companies in the AGRR industry today. I think many in the industry would like to hear from someone such as you Mike, a strong competitor providing the highest level of quality workmanship to the customers in your marketplace. What attracted you to the AGRR industry?
Mike Paley: “Attracted” is an interesting term. I think it was more fate than attraction! While transitioning from my job as a Service Manager, a chip in my windshield spread into a crack that required replacement. During the replacement process, the technician asked how long it had been chipped. When I told him three years he asked why I never called to have it repaired. I confessed that I had never heard of repairing a chip. (As a dealership Service Manager, no one had ever approached me about repairing chipped windshields for our service clients bringing their vehicles in… hint to those in marketing). So I began looking at every parked car’s windshield and was surprised to see how many were chipped. From there I started researching the “repair” industry and I felt it was a job I could perform without employees for the time being. And I’ve always been confident that I could “sell” anything that I believed in. So Freedom Glass was created with only the repair industry in mind.
In May of ’05 I started to contemplate adding replacements to our services. But since I didn’t know anything about replacing auto glass I needed to research that, just as I had done earlier for repairs. During my research, I learned just how critical windshields were to safety in the event of a crash or collision. Shortcuts or errors could be catastrophic, so I wanted to make certain I was replacing windshields correctly. I contacted a glass company in Jacksonville, Florida, and asked if I might come down to shadow a couple of their technicians for a week. They graciously agreed, and in July I went down. I learned a tremendous amount in a very short time from those two technicians. In September I traveled to Charleston, South Carolina to attend the NGA’s Auto Glass Technical Institute (AGTI) course. Exactly one year after opening our doors, we began doing replacements in addition to repairs.
Without a background in the AGRR industry, what prompted you to want to enter this industry as a business owner rather than an employee?
Mike Paley: Two words come to mind as for why I wanted to own rather than work for the business; leadership and responsibility. The Marine Corps instilled in me leadership by example. I have never asked, nor expected, an employee to do anything I would not be willing to do. Case in point, I required of myself to get trained and certified before I ever brought on a technician. That enabled me to learn what was expected and required to perform the job. As the owner, I am responsible for the technicians and their ability when I place them in the field. To this day, we have never installed a windshield whereas an NGA certified technician was not at that job. Some owners may not deem that necessary, but it is for me! Someone is trusting Freedom Glass with their most precious cargo, and I take that responsibility very seriously. Another responsibility the owner has is the material his technicians have to work with. I often say the greatest technician in the world can’t be great if his company’s owner refuses to provide him with the best material. But likewise, if an owner provides the absolute best material available and the technician is untrained or doesn’t care, the installation can still be compromised. It takes both.
Independents have to stay competitive by finding ways to differentiate themselves from not only the larger companies they compete against in their local markets, but also other independents such as themselves. What advice can you offer independents such as yourself to stay competitive against the larger chains?
Mike Paley: There are several things that we emphasize. We encourage our clients to call me if there is ever a question, concern or issue about a job after our technician has left. Plus, I let people know that when you’re dealing with a company our size you’re no more than two phone calls away from talking with our President; try calling a “big” company to talk with their President. I would strongly encourage smaller independent shops to focus on quality, not quantity. I would rather have a technician do five jobs a day correctly, then eight incorrectly. I also express to clients and contacts that because we don’t have a TPA feeding us business we must rely on referrals and word-of-mouth. So we “ask for referrals”! If you don’t ask, you probably won’t receive.
By your being the first auto glass company to pass the AGRSS® independent third party validation, what advice do you offer those in the industry who are considering joining the association? Why did you join and why should other AGRR companies join AGRSS®?
Mike Paley: There are a multitude of associations and organizations that an AGRR company can join, and they all have their place. But for me, our participation in AGRSS® is my priority because its focus is on the safe installation of windshields. And without that, nothing else matters! To me that is. And so, if an auto glass company is genuinely concerned about the safety of its clients, they owe it to themselves, their staff and their clients to be a part of AGRSS®.
Why did we join AGRSS®? Let me first say that it took some time for us to join AGRSS® and the reason was purely fiscal. I had read the Standard and recognized that we were following it, but for anyone to be able to simply write a check (and sign an affidavit) stating they were doing installations correctly without any way to substantiate it didn’t sit well with me. Perhaps I was being too cynical, but I expressed this concern to someone at AGRSS®, and was advised that a validation process was in the works. So I politely asked to be contacted once that validation came to fruition. Several months later I was contacted and advised the validation process would be rolled out soon, so we jumped at the opportunity to demonstrate that we were indeed performing our replacements correctly and in accordance with the AGRSS® Standard. Unfortunately, the roll out didn’t take place as soon as we had expected. But ultimately validations did start and we are thrilled to have been the first auto glass company in the Nation to pass the third-party validation with 100% compliance.
Why should other AGRR companies join AGRSS®? David, I didn’t realize my “sometimes” lack of being politically correct would be tested this early! While I do believe that every AGRR company “should” be registered with AGRSS®, I know that not all companies can be! As someone who is still very close to the front line of windshield replacements, I will tell you that far more windshields are being replaced improperly than should be the case. And I’m confident that our area is not the exception, but rather the rule. So let me answer your question this way. I feel as though any auto glass company that “claims” to be performing safe and proper windshield replacements should be, and should want to be, a registered company with AGRSS®!!! I don’t know why those companies wouldn’t be excited about being registered with and connected to AGRSS®. After all, AGRSS® is trying to educate and promote that there is a difference between a safe and an unsafe windshield replacement. And they’re promoting those shops that care enough about wanting to keep their clients safe. So I guess I’ll answer your question with a question. Why would any auto glass company performing replacements properly and safely NOT want to be a part of AGRSS®? Personally, I can’t think of one reason!
What can you share about the experience of what it was like for you and your people to go through the AGRSS® validation process that other registered companies will be going through in the next few years?
Mike Paley: When I learned of our scheduled validation, I did get nervous. But my nervousness stemmed from the validation process being new and perhaps there being some bugs in the system that may not have been worked out yet. I felt we had a lot riding on the results of our evaluation. So our company went over the Standard again, worked with our adhesive manufacturer representative and prepared for what I feared would be an interrogation. Turned out it was anything but an interrogation. The validator, who is not a glass-industry person but rather statistician or assessor, went down a list of questions that everyone familiar with the Standard will already know, and merely asked questions. The questions weren’t tricky or deceptive. It was almost as if our validator were simply curious as to what we were doing and why. I likened it to a curious client watching and questioning a technician during an installation. The one piece of advice I would offer everyone, regardless of your company’s size, is to have a trainer, manager, or owner present during the actual validation for each technician. We found this to be invaluable to clear up any misunderstandings about nomenclature, verbiage or procedures.
Regardless of the size of your company, whether you’re the biggest or the smallest, why doesn’t (or shouldn’t) everyone who installs auto glass strongly embrace AGRSS®?
Mike Paley: I think every auto glass company should embrace AGRSS®, and its intent! A major part of my presentation when a potential client calls in for a quote is to educate them on windshield safety. Yes, I want Freedom Glass to perform their replacement, but most important to me is that they know what to look for and ask about. For those AGRSS® registered companies in my area, if you didn’t already know it (but I suspect you do), I am constantly promoting you. While I’d love to install every windshield needed in my area, I recognize that we simply can’t do it; we’re just not large enough. So if someone elects not to use Freedom Glass, I strongly encourage them to contact a competitor who is also registered with AGRSS®. Some may question my reasoning for that, but I do not. As I tell everyone that will listen, my family and friends will be safe with their windshield replacements because they will have us do the installation. However, I can’t protect those I care about from someone else’s windshield coming out during an accident and striking them. So I feel as though it behooves me to insure that everyone has a safe windshield installation. And with that, I believe it is in every AGRR owner’s best interest to promote education, not lowest price. I don’t ever want to read another story about a fatality resulting from a windshield failure. As much as I hate to actually say this, I believe there are two types of auto glass companies out here today; those who genuinely care about safety and those who will do anything for the almighty dollar. At Freedom Glass we have, and will continue to, turn down any job that will not result in a safe installation. Making a living is important to us, but not at the expense of someone else not living!
What do you see as key opportunities for you (and for others like you) in the AGRR industry and what do you feel differentiates you in the marketplace.
Mike Paley: David, I sincerely believe AGRSS® brings us the single greatest opportunity to demonstrate to the driving public that those of us registered with and adhering to the AGRSS® are indeed putting safety first. As the saying goes, a lot of glass companies talk the talk, but only a few of us walk the walk. And again, the way we try to differentiate ourselves from our competitors is by educating. I do not want a client because I’m the cheapest out there. I want that client because they care about those persons in their vehicle, and they’ll heed our warnings, i.e. Safe Drive-Away Time. I feel if every AGRSS® registered shop would spend more time educating and less time concentrating on price, some of the 800-lbs gorilla’s business would come our way and some of the fly-by-night installers would either leave the industry or get trained and certified.
From your prospective, what do you see that is right with the industry and what do you see is wrong with it?
Mike Paley: There are several things that I see as right in our industry, and that gives me reason to hope more positive things are forthcoming. I sincerely believe that the formation of AGRSS®, and its validation program, is the absolute best thing that could have occurred for our industry. I also know from attending the conferences over the years and talking with other glass companies around the nation, there are others that truly care about consumer safety and place that in the highest regard. And while independents, especially small independents, can’t compete head-to-head with that 800-lbs gorilla in our industry, if we can work together to educate and demonstrate our collective professionalism, I believe that we can gain some of that gorilla’s market share.
As for what I see wrong in our industry, there are several things there as well! Of course the biggest is that gorilla. Anytime a company can have an affiliation with the majority of the insurance companies out here; answering their glass claim calls, dispatching their own installers, using the glass they manufacture, and getting paid a Guaranteed Average Invoice (GAI) price; that’s about as “wrong” as it can get for the rest of us. And there are several “wrongs” I feel are being self-inflicted by many in our industry, including some by independents. Freedom Glass does not, has not and will not waive any portion of a client’s deductible. If a client wants a zero deductible, I encourage them to talk with their agent. After all, if anyone reading this does waive even a portion of that deductible and our industry’s compensation keeps getting smaller and smaller, I would implore you to write a letter to AGRR Magazine as to how you’re doing that and staying profitable. But the truth is, I already know! And my company will never do anything to compromise anyone’s safety. The other issue I see are the numerous installers who, after working for someone else, have decided to open their own auto glass company. The problem is that while they may have the best of intentions and may even be very good technicians, their inability to quote and market properly is driving the value of our industry into the ground. Often times these “new” independents will survive for a month or two based on family, friends and connections, then they begin calling other glass companies to inquire about performing subcontracting work for them. Then, within six months their company is no longer in business. And finally, we have those companies in our industry, large and small, that do not see the value and importance of training and educating their personnel. To me, that’s a frightening shame.
What industry associations or organizations do you belong and why did you join them?
Mike Paley: We have been members of the Auto Glass Replacement Safety Standard (AGRSS®); Independent Glass Association (IGA®); National Glass Association (NGA®); and, National Windshield Repair Association (NWRA®). We currently belong to only AGRSS®. The reason we joined each of these associations was to learn more about our industry as a whole, each association independently including its goals and objectives, and to become certified by each. I don’t believe we can ever learn too much.
You may be uncomfortable answering this question, but what advice can you offer others in the industry that you feel could possibly help them improve their businesses? Can you pass along any ideas on how they can grow sales in their markets in the difficult environment that the industry is facing?
Mike Paley: I believe I’ve already addressed a couple of ideas, but let me offer this. In my humble opinion, I believe owning an auto glass company is a marathon, NOT A SPRINT!!! Go to work each day with the goal of educating everyone and making at least one friend. Share something about auto glass safety with everyone you come in contact with. Do those things and the sales will take care of themselves. People ultimately do business with people they like and trust. Sure, the cheapest guy may get the job today, but he probably won’t be around tomorrow when that client needs their service again. So stay true to yourself, your clients and your industry. It may be tempting to lower your prices or your standards, but once you’ve compromised them, they’re gone!
And finally, one thing I have to ask you about is how your Carolina shag dancing is coming along with the Richmond Shag Club and how do you rate your dancing prowess versus your skills in the auto glass repair and replacement industry?
Mike Paley: Talk about being blind-sided, LOL! Having never danced until I reached the half-century mark, and always thinking I had two left feet, I’ve grown very confident in my dancing. Five years ago you couldn’t have dragged me onto an empty dance floor; today you can’t keep me off one. My skills in the auto glass industry have also grown tremendously, and with that, so has my confidence. Without that confidence I would never have even considered accepting the honor of being nominated, much less elected, to the Board of Directors for AGRSS®. Ten years ago I wouldn’t have dreamt of owning an auto glass company, but today I’m proud of where we stand and the reputation we’re building daily. And that’s my hope for the future of our industry as a whole, to grow in skills and knowledge, abilities and confidence. Can we learn more? Absolutely! Can we get better? Without question! Are we passionate? We better be; people’s lives depend on us!!!
I want to thank you for taking the time to answer my questions Mike. I very much appreciate your candor and willingness to share your views on the industry. We both have a great desire to see everyone who runs and operates a glass company in the AGRR industry find ways to remain viable during the difficult competitive landscape that exists, especially today. With all of the changes that have taken and are taking place in the industry you need to find ways to compete in the marketplace and not only maintain the customers you have, but grow your business by differentiating yourself in the marketplace. I hope that many in the industry can see through your experiences and advice in opening Freedom Glass that there are ways to be successful in the industry, regardless of the size of your company.
Thanks again Mike and I wish you great luck in the prosperity and growth of Freedom Glass. I’m glad I’m not currently competing against you in Richmond.
p.s. The Auto Glass Replacement Safety Standard (AGRSS®) changes its name to the Auto Glass Safety Council® effective January 2012.
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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
- a 7.8 ounce tube of Crest® Pro Health Fluoride Toothpaste Clean Mint ($ 4.99),
- a 6 ounce box of my personal favorite GOOD & PLENTY® Licorice Candy ($ 1.59),
- 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…..
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.
ABC Channel 6, Aftermarket glass, AGR, AGRR, AGRR Magazine, agrss, AGRSS Standard, amazon, auto glass, Auto Glass Company, auto glass industry, Auto Glass Safety, Auto Insurance, Automotive Expert, automotive safety, bayer, chicago, consumer affairs, crest, David Rohlfing, glassbytes, good & plenty, Independent Glass Association, Insurance Industry, investigative report, itunes, just sayin', lance haver, No Shortcut to Safety, Nydia Han, oem, OEM Glass, philadelphia, philadelphia consumer affairs, pricing strategies, safe drive away time, safelite, safelite auto glass, Small business, US Govt, walgreens, windshield repair, windshield replacement, windshields, WPVI, wpvi in philadelphia, zip code, zip code pricing
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