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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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What Will Winter 2019 – 2020 Bring?

Winter 2019 2020 v2 Photo by Val Vesa on Unsplash

If you read the recent “Farmers’ Almanac’s Extended Forecast 2020” article on the outlook for the coming Winter in North America you’d have seen that it’s predicted to be what the self-proclaimed provider of “perception, experience, and common sense” is calling a “Polar Coaster”. Their forecast for this Winter anticipates that we will experience bitter cold from the Rockies to the Appalachians. A forecast likes this tends to be great news for the retail automotive aftermarket as weather extremes are a key driver whether you’re in the Emergency Roadside Service (ERS) industry or the auto glass repair and replacement (AGRR) industry.

For 201 years the Farmers’ Almanac has been providing seasonal weather predictions and this Winter the worst areas for cold and snow include the Northern Plains, Great Lakes Region all the way to the Northeast. The prediction indicates that the worst weather could take place from late January through early February.

Winter weather often brings feast or famine to the automotive aftermarket depending on whether it’s a colder or warmer season. It doesn’t matter whether you’re a manufacturer of products used by the automotive industry’s that operate in the aftermarket, a company distributing replacement parts into markets across North America or a retailer providing services to the end user, the spikes in opportunities that cold weather extremes bring includes probable logistical and supply issues. Potential issues that extreme cold, ice and snow brings can include keeping plants open and fulfilling increased parts orders, keeping delivery vehicles on the road getting those products to the retailers who also have to deal with scheduling repairs that come along with the increased opportunities.

With the current historically low unemployment rates that we’re seeing across North America an extreme Winter also will bring additional stress due to difficulties finding those qualified to manufacture, distribute and provide repairs that consumers and businesses alike will require. Currently there are numerous examples of difficulty finding and keeping qualified technicians in both the AGRR and ERS industry’s. In the AGRR industry a glass repair or replacement can often be deferred for some period of time, but weather extremes effect on automotive batteries will drive volume spikes in jump starts and replacement opportunities putting strains on companies that provide services in the ERS space.

So if the Farmers’ Almanac prediction turns out to be accurate for Winter 2019 – 2020, has your company planned and prepared its best so that you can take care of your customers parts and service needs? Those who have done the best job planning before any extreme cold, ice and snow appears will be the ones able to capitalize on the opportunities that are available.

Just sayin’.

 

* Photo by Vel Vesa on Unsplash

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Just Sayin’ Blog – Wind at Our Backs? – Part III

Last September and December I wrote blogs titled “Wind at Our Backs?” and “Winds at Our Backs? Part II” writing that “it appears that we may have some wind at our back” when looking at the key drivers (the weather, the economy and miles driven) of the automotive glass repair and replacement (AGRR) industry. If you focus mainly on the weather as a key driver and look at what we’ve experienced in the United States this past winter, many would describe it as harsh or brutal in much of the country. Based on the weather over the past week, even though the vernal equinox or the first day of spring arrived on March 20, 2014, our winter really hasn’t seemed to have ended yet. I live in Chicago and this past winter was the coldest (December – March) ever on record and snowiest (9.7 inches from snowiest on record – 1978-79 as reported by the WGN-TV Weather Blog) I’ve ever experienced anywhere, except maybe for one when I lived in Montreal.

Chicago Lakefront 2014x

Chicago/Lake Michigan February 2014

The Old Farmer’s Almanac forecasted that the 2013 – 2014 winter season would bring us colder weather and heavier snowfall in many sections of the country and for those who were hoping that the forecast would come true they weren’t disappointed. Stretching from the Rockies to the East Coast the weather has been a big boon to the industry with extreme or unseasonably cold weather that included snow and ice storms. I’ve talked with a number of retailers and suppliers who had a great first quarter of 2014 which followed a rather lackluster 2013. One supplier told me, with his tongue firmly planted in his cheek, that on a trailing twelve months he looked like a genius since all the strategies that his company had used in the past year to increase business had really paid off.

Starting in 2011 The Weather Channel started naming winter storms that are strong enough that meet the criteria set by the prognosticators. For the winter of 2013 – 2014 The Weather Channel’s list of 26 alphabetical names were developed with the help of a Bozeman, Montana high school Latin Class. The potential storms this winter began with the name Atlas and will end with Zephyr. Through today there have been 24 named storms with the current storm that hit the Upper Midwest with up to 18” of snow before heading off to Canada. Since it is now the first week of April and a couple of weeks since the first day of spring winter storm Xenia is dumping snow in parts of Minnesota, Wisconsin, Michigan, South Dakota, Nebraska and Iowa. Enough already. Although this winter may have been good for some in the AGRR industry I’m thinking of it more like a Dr. Seuss book I read countless times to my sons when they were growing up – “Marvin K. Mooney Will You Please Go Now!

 

When you look back at this past winter named storms starting out with Atlas in early October that delivered feet of snow from the Rockies to the Upper Plains winter storms kept hitting almost every week including some areas that haven’t seen much in the way of winter weather for a few years. In early February starting out in Georgia and hitting especially the Atlanta metroplex were a couple of storms that CNBC described as a catastrophic ice storm that effectively shut down Atlanta for several days before continuing on up the east coast wreaking havoc along the way. In early March the greater Dallas-Fort Worth and North Texas area got hit with an ice storm that crippled the metroplex. The Carolinas got hit by a couple of storms in February and March with the last one being Ulysses hitting around March 10th. If you live in the North you expect to get snow and you’ve learned how to deal with it, but it’s not quite the same below the Mason-Dixon Line.

Every year there is a contest that awards a trophy called The Golden Snowglobe that recognizes the snowiest city with a population of 100,000+. The trophy typically goes to Syracuse, Rochester or Buffalo, New York each year, but as of today it appears that for the winter of 2013 – 2014 the winner for The Golden Snowglobe will be Erie, Pennsylvania with 137.2” of snowfall.

For this blog I’m not going to address the economy or the miles driven. Neither of those has really changed all that much since my December blog. Regardless whether you feel the wind is at your back or not, you and your employees are the key driver(s) in your business. How you’re dealing with the various opportunities and obstacles that you face each day in your business determines the success you achieve. All that really matters is what is going on in the market or markets you operate and I hope that you’re achieving success in the markets you compete.

As good a predictor that The Old Farmer’s Almanac was for this past winter, the prediction for the 2014 – 2015 winter season from this long-time source hasn’t been published yet, but I recently saw a very detailed prediction made by The Weather Centre for next winter. Please take the time to read and interpret all of the information and let me know what you think what the upcoming winter will be like.

Since weather is so important to the AGRR industry, in the coming months I’m hoping that you get some hail in the markets you compete. I know a couple of suppliers that think that could be their winning strategy for 2014.

Just sayin’.

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Just Sayin’ Blog – Wind at Our Backs? – Part II

As 2013 comes to a close I thought I’d take a quick look back at a blog I wrote in September titled Wind at Our Backs? I suggested that “it appears that we may have some wind at our back.” The wind was related to the three key drivers of the automotive glass repair and replacement (AGRR) industry: weather, the economy and miles driven.

The Weather – I wrote that The Old Farmer’s Almanac has a pretty good record at forecasting winter weather. For the 2013 – 2014 winter season, the magazine forecasted that we would be experiencing colder weather and snowfall in many sections of the country. When you take a look at the past month the forecast seems to be a good one. I live in Chicago we’ve seen January and February cold in December already. And we’ve had snow too. If you believe that cold, ice and snow are good for the AGRR industry and you live in markets that experience them, the start of winter in many areas has been good. The map below shows the snow cover in the United States as of today.

us_snowcover_large_usen_600x405

Let’s keep hoping for cold, ice and snow for the rest of winter 2013-2014.

The Economy – Economic news continues to be positive with the United States Department of Labor – Employment Situation Summary reported that unemployment rate declined in November to 7.0% from October’s 7.3%. The major U.S. Indexes have soared to new highs the past month, but as someone I know always says “so far things are going well today, but it’s early”.

The Los Angeles Times reported in an article this week titled “U.S. economic recovery is expected to gain strength in 2014” stated, “The nation’s economic outlook has vastly improved in recent weeks with signs of stronger job growth, bigger gains in personal incomes and an improving housing market.” The article pointed out that the economic outlook for the country has improved sharply and that consumer buying is influencing businesses to hire which means that confidence in the both the long and short-term economy.

The positive economic outlook is reported at a national level but what really matters is how are things going in the market or markets you compete. I hope things are going well in the markets in which you compete.

Miles driven – On a trailing twelve months ending September 2013 the U.S. Department of Transportation–Federal Highway Administration (FHA) reports that travel overall was up 1.5% or 3.7 billion vehicle miles versus September 2012. For all of 2013 versus 2012 miles driven is up 0.4%. The only area of the country not reporting an increase year-on-year was the West with a 0.2% drop. The South-Atlantic and the South-Gulf regions both reported a 2.4% increase, along with a 2.0% increase in the North-Central and the North-East a 1.0% increase. Overall miles have increased 9.8 billion miles driven so far in 2013. The September 2013 Travel Monitoring and Traffic Volume report was good news for the AGRR industry.

An improving economy is helping to fuel this increase in miles driven, but so is the drop in the cost of oil. The graph below shows the rise and fall of gasoline prices during 2013 and as you can see prices are trending lower.

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Lower gasoline prices are obviously positive for your business and its helping to increase miles driven by consumers. Let’s hope that 2014 continues this trend.

As reported in an article titled “U.S. roads, bridges are decaying despite stimulus influx” that appeared in the USA Today earlier this year, “Indeed, just 38% of the pavement on roads stretching miles across the USA is in “good” condition…” Bad roads are good for the AGRR industry and as the article points out, “The cumulative cost of these tattered roads isn’t just about dollars and cents. Though poor pavement conditions do cost consumers billions annually in vehicle repair…” With government budgets tight both at a national and state level we’re probably not going to be seeing much money spent on fixing roads and the money that is spent will probably be short-term.

The three key drivers appear positive at the moment. You can probably argue that there are other key drivers in your business today such as the competitors you face in a market. As I’ve mentioned before I believe that you are the key driver in your business. You and the people you surround yourself. Taking advantage of opportunities in the marketplace the best you can as they come up will make the difference in how 2014 starts for you in your business. In talking with a number of people I know in the industry 2013 and the past few years have been tough.

With the three key drivers turning positive as we close 2013 and if you agree that the wind is at your back, what are you going to do in the next year to make your business stand out and drive success?

I hope that you have a Happy Holiday and that the New Year will most definitely be a very good year.

Just sayin’.

 

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

In a recent blog titled The Times They Are (Always) A-Changin’ I mentioned a few of the acquisitions that have recently taken place and I wrote about why an owner might consider that selling at this time is a good choice.

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 announced that they are doing just that.”

Later in that paragraph I wrote:

“During the past 30 years, a number of companies have acquired others in the AGRR industry to increase their own market share and separate them 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.”

It didn’t take long to hear of others. On December 31, 2012, The Boston Globe posted on its www.boston.com web site a story titled “Safelite declines to comment on talks to buy Giant Glass”. If the story was true it was big news in the greater Boston market. Safelite has been trying to regain its position in New England for a number of years. A couple of days later it was confirmed by glassBYTEs™ and also in a story titled, “its official: Giant Glass is now owned by Safelite”. As a local company Giant Glass advertised against using “national” companies, but now Giant isn’t a local company anymore and its now owned by a company that’s headquartered in Belgium. I wonder how that’s going to play in the marketplace. Then last Friday, January 11, 2013 glassBYTEs™ posted another article titled “Safelite Acquires Second New England Area Shop this Month” reporting the acquisition of Windshield World based in Vermont.

There are all sorts of good and bad reasons to buy or sell. I think we’ll be hearing of further acquisitions announced by Safelite, Gerber and others in the near future. Maybe you’re hearing some of the same rumors that I’m hearing?

Regardless of the ongoing consolidations that are taking place I’m certainly a firm believer that there are opportunities for independents in the automotive glass repair and replacement (AGRR) industry. In order to be successful you’ve got to make sure that you surround yourself with the best people and that they are committed to the goals and aspirations that you have for your business. You’ve got to deliver on the promise of providing the best service and products that you can versus your competitors and then do it at a fair price. In The Times They Are (Always) A-Changin’ (Part One) I wrote,

Other ways you can remain relevant are by finding that unique selling proposition (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 Wal-Mart 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.”

 In times like we’re in now you need to focus on what you’re doing and how you can differentiate yourself from your competitors. Non U.S. based companies like Safelite and Gerber seem to be gobbling up the competition. Find your USP and find a way to compete. As the cartoon below suggests, “keep changing the game”. 

Keep Changing the Game

Cartoon courtesy of http://www.TomFishburne.com

 Just sayin’…….

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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 – 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 – Network Participation Agreement

On July 20, 2012 Safelite® announced through its www.SGCNetwork.com an ADDENDUM to its Safelite Network Participation Agreement/Safelite® Solutions Network Participation Agreement which effectively lays out the rules between Safelite Solutions LLC (Safelite®) and what they call the “notified party” or “participant” (participant). A participant refers to auto glass repair and replacement (AGRR) companies that repair or replace damaged or broken auto glass for insurance policyholders whose insurance companies or fleet companies use Safelite® to administer auto glass losses. The addendum is fairly straightforward and if you are a “participant” it is binding upon you unless you notify Safelite® within 10 days that you object to the changes in the new addendum. Of course, if you object to the addendum you effectively terminate your participation in the Safelite® network.

As reported in glassBYTEs on July 31, 2012 in an article titled “Safelite Releases Addendum to Network Participation Agreement”, Section 1.10 of the ADDENDUM states:

“1.10 Participant shall comply with each applicable insurance and/or fleet company’s program requirements or marketing guidelines, whether communicated by the company or by Safelite Solutions orally or in writing. Notwithstanding, Participant agrees and acknowledges that unauthorized use of insurance or fleet company trademarks, logos, or other intellectual property is prohibited. 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.” 

The section seems reasonable. If a participant wants to do work for either insurance or fleet companies that utilize Safelite® for handling glass losses, the participant shall comply with the “requirements or marketing guidelines, whether communicated by the company or by Safelite Solutions orally or in writing” for those companies that Safelite® provides administrative control over glass losses. How would Safelite® ever prove “requirements or marketing guidelines” that were communicated “orally” to a participant? It’s the last sentence in the addendum that I’m writing about today. 

I find it interesting that the last sentence of Section 1.10 appears limited only to “any insurance agent or its personnel” by stating:

“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.”

My first question is 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 was also just wondering why the language of Section 1.10 refers only to “any insurance agent or its personnel”. Does the last sentence mean that you can provide something of value to an employee of a fleet company? Perhaps I’m missing something.

What I don’t understand is why Section 1.10 is limited only to insurance agent(s) and those who work for an insurance agent if what the section is attempting to do is to stop influencing auto glass repairs and replacements for insurance companies. Does Safelite® operate under the same rules that are laid out in Section 1.10?

Section 1.10 of the new addendum just doesn’t seem all that clear. Or maybe it is.

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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Just Sayin’ Blog – Army Staff Sergeant Ty M. Carter – Defining Moments

This past Monday, August 26, 2013 at The White House, United States Army Staff Sergeant and Calvary Scout Ty M. Carter received the Congressional Medal of HonorThe Congressional Medal of Honor is the highest award for valor in action against an enemy force which can be bestowed upon an individual serving in the Armed Services of the United States. The medal is generally presented to its recipient by the President of the United States of America in the name of Congress. There have been 3,462 medals awarded over the years and there are 79 recipients still living today. Ty Carter is being honored for his gallantry in helping to defend Combat Outpost Keating, located in a remote section of Afghanistan, from an unwavering attack by a Taliban force. He and his fellow Americans were severely outnumbered.

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When talking about the actions he took at the outpost that day on October 3, 2009 Ty was quoted as saying:

“When good men are dying all around you, you have to decide what your last moments are going to be like. Are you going to die behind something, or are to going to die standing and firing. Are you going to die pushing forward or falling back?”

What a great quote and an amazing mindset to have when you are in battle and facing terrible odds. It is impossible for me to imagine the horrific setting and events that took place that fateful October day.

When reading about Ty’s receiving this amazing honor for his valor and acts of selflessness, I started thinking about the character traits required to possess his mindset. I then thought about traits required to be so determined, driven and/or committed to achieve a specific goal. How those traits determine or define success. That led me to wonder about the traits required to be successful in the auto glass repair and replacement (AGRR) industry today. Now before you say “what the &$%#”, I’m not in any way attempting to liken the American heroes who are brave enough to take up arms and defend our nation to the issues faced by retailers in the AGRR industry. There is obviously no real comparison. What I am suggesting is Ty Carter’s quote makes you consider that if you are going to be successful as an AGRR retailer or in any endeavor you had better have that determination, that drive and commitment to fight the good fight or you won’t be successful in the task at hand. You must discover the ways to find success as you are confronted with new obstacles; and you had better never take that success for granted because someone is always coming after you and yours.

There was once a time finding success being an AGRR retailer was a fairly easy task. A time when networks or third party administrators didn’t exist and when you didn’t have to deal with steering or any of the other tactics seen today. The landscape has changed and continues to change. In all likelihood it’s not going to be changing in any positive way and certainly not to your advantage, so you’d better be working hard to find ways to ensure your continued success.

In previous blogs (“It’s all a matter of perspective”; “Auto Glass Networks – Part 1” and “Auto Glass Networks – Part 2”) I’ve written about various tactics used and what actions you might consider in maintaining and growing your business. You have to focus and fight for your customer(s) and you can’t let anybody keep you from doing so. You can’t stop pushing forward. You can’t stop trying out new ideas or strategy’s to grow your business. You need to find that special something that makes you and your company stand apart from the others. You can’t ever give up trying. Don’t suffer from what Brad Stevens; former head men’s NCAA basketball coach for the Butler Bulldogs and new head coach for the Boston Celtics said after an NCAA game earlier this year, “The pain of losing isn’t as great as the pain of regret. You have to give it your best.”

Ty Carter didn’t stop fighting at Combat Post Keating on that fateful day in Afghanistan almost four years ago. He didn’t give up and he didn’t let the circumstances keep him from continuing his “pushing forward”. He never allowed himself to “fall(ing) back” as in doing so the outcome of that day would have been very different for both himself and the men he served with at Combat Outpost Keating.

In my last blog post I wrote about “Battles Won and Waged”. Nothing that I have ever done in my life or in my career in the AGRR industry are on the level or scale of the horrific battles that Ty Carter has faced in his chosen field.  As a country we honored Ty Carter for his service to our nation and the many sacrifices he has made and continues to make on our behalf. Just as he never gave up on the day that he faced unimaginable challenges neither should we in the much lesser challenges that we face in being AGRR retailers. In my last blog I wrote,

“You’ve got to try to never let anyone, any company or thing get the better of you. Work hard to figure out a work-a-round to your challenge. Always remember that when you face a challenge it’s not always the battle won, the battle waged is just as important. It defines who you are.”

Ty Carter defined himself on October 3, 2009 and he continues to do so today as he continues to push forward, not falling back in ongoing struggles he faces in dealing with post-traumatic stress disorder. He is a Congressional Medal of Honor recipient and is one of only 3,462 so honored in the history of the United States Military. Ty is an American hero.

How are you going to define yourself?

Just Sayin’.

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