Archive for category Auto Glass Networks

Just Sayin’ Blog – A Matter of Fairness

Recently I was forwarded a letter that Safelite Solutions (“Safelite” “SGC Network”) sent to an auto glass repair and replacement (AGRR) company.  The letter related to work that the company had done for a consumer that happened to be insured with a company for which Safelite manages glass losses. The AGRR company had done a replacement and was required to send the bill for the work that was done for the consumer through Safelite in order to receive payment. The letter that was received started out stating:

“The SGC Network is currently in the process of performing a random fast cure kit Audit.”

The letter went on to state:

“Please fax copies of the work orders/invoices that include the urethane lot stickers. Do not send proof of purchase or receipts. The only acceptable documentation is the urethane lot sticker attached to the invoice or work order. Please forward to ATTN: SGCNetwork at 614-210-9941 within the next three business days.”

Have you seen or received one of these letters? I hadn’t seen one before. What was requested certainly seemed reasonable to me and the company also thought the request was reasonable. The company had the information readily available since the information is required under various sections of the Auto Glass Replacement Safety Standard that is administered by the Auto Glass Safety Council™. What was interesting about the request was that Safelite was taking on the role as an independent 3rd party auditor in asking for the information. Who do you think performs that function when and if Safelite audits its own use of a “fast cure kit”?

Take a minute and look up the word “fairness” on dictionary.com and you’ll find the following:

Noun

“the state, condition, or quality of being fairor free from bias or injustice; 

evenhandedness”

            Adjective

“free from discrimination, dishonesty, etc; just; impartial”

            Adverb

“in a fair way; correctly: act fair, now!”

It’s also interesting to see the word fairness shown via TH!NIKMAP’s Visual Thesaurus®.

 Fairness 2

 

So does it smack of “fairness” that a retail auto glass company that competes for auto glass repairs and replacements in the United States is also given responsibility for performing audits of competing AGRR companies to determine if they are using a “fast cure kit”? It doesn’t seem that Safelite would be the appropriate entity to audit others if you applied the definitions of fairness:

“the state, condition, or quality of being fairor free from bias or 

injustice; evenhandedness”

“free from discrimination, dishonesty, etc; just; impartial”

“in a fair way; correctly: act fair, now!”

They certainly aren’t “free from bias” and it doesn’t seem as though they would have a strong desire to adhere to the idea of “evenhandedness”. I don’t see how they could be “impartial”. And it would seem impossible that the act of their being the auditor would be accomplished “in a fair way”.

To me it seems to defy logic when the corporate mission of any company must be to grow market share and produce increased value to its shareholders for it to be possible for them to be an independent auditor of others in the industry in which they compete.

Safelite’s company web site states:

We must do what’s right, even when no one’s watching

This means living by our values and being accountable. It is about how we treat our staff, our customers and members of our local community. We reinforce this throughout our corporate structure with legal compliances and ethics training, an employee ethics hotline and numerous channels for feedback and concerns.”

Certainly words any company would be proud to adhere. It seem appropriate to ask “who’s watching” those that are watching us? Do you think that there’s a 3rd party auditor that’s auditing the auditor?

I think you can ask the same question relating to the “pre-inspections of auto glass claims” that was discussed in a glassBYTEs article titled Safelite Solutions Accepts Recognition for Pre-Inspection of Auto Glass Claims” in May of last year. Does that practice seem to smack of “fairness” to you?

As most everyone on the planet knows, Super Bowl XLVIII is coming this Sunday, February 2, 2014 between the Denver Broncos and the Seattle Seahawks. The officiating crew this year is led by veteran referee Terry McAulay. What if for the game this year a crew of Denver Bronco fans is allowed to officiate the game instead of the impartial officials that have been selected by the NFL? If that was allowed to happen how many calls do you think would go Denver’s way? Even the most ardent Bronco fan hoping for a win for their team would see that as both blatantly “unfair” and “unjust” to the Seattle Seahawks team.

So as “A Matter of Fairness”, who thinks that how Safelite operates as an auditor and/or inspector is:

“the state, condition, or quality of being fairor free from bias or 

injustice; evenhandedness”

“free from discrimination, dishonesty, etc; just; impartial”

“in a fair way; correctly: act fair, now!”

Just sayin’.

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Just Sayin’ Blog – Doing the Right Thing Isn’t Always Easy

Whether you are an auto glass shop owner or an auto glass technician working in the auto glass repair and replacement (AGRR) industry, following the Auto Glass Replacement Safety Standard® isn’t easy, nor should it be. The AGRSS® Standard has rules and best practices which requires a higher level of diligence and reporting to be adhered to on the part of both the auto glass company and its technicians. Deciding as a company to fully embrace the standard and fulfill all of its requirements separates your company and your auto glass technicians from other companies which you compete. As a company you make the decision to follow the AGRSS® Standard then take the additional step and join the Auto Glass Safety Council™ as a registered company. Being a registered company requires that you participate in the non-profit organization’s Validation Program. Understand that if you’re a registered company, following the standard tells your customers that you are willing to open yourself to a 3rd party validation and inspection to ensure that you indeed follow the rules of the standard.

For the purposes of full disclosure, I sit on the board of directors of the Auto Glass Safety Council™. The Auto Glass Safety Council™ consists of countless industry members who donate their time and efforts to maintain the standard. They and/or the companies they work for pay for the time and travel required to spend working on behalf of the AGRSS® Standard. No one is paid for the work that they do.

By following the AGRSS® Standard you set yourself apart from others in the industry that’ve chosen not to do so; whether for reasons of profit, lack of knowledge or perhaps that you just don’t care about the safety issues involved. I’m not sure what would cause a company to not follow AGRSS®, but it has to be for one of those reasons. There are 8 deliverables that an auto glass company must adhere to comply with the standard. They are:

For Blog

Adhering to the AGRSS® Standard requires that you follow all 8 of the above deliverables. Does your company follow the standard and the deliverables? How do your customers know that you do?

A number of networks and/or third party administrators (TPA) require that auto glass shops that do replacements on the behalf of network customers replace glass according to the AGRSS® Standard. How is it possible for those networks to know that each replacement is actually performed to the standard? The only way for a network to confirm that every glass replacement is completed according to the standard is to require membership of every glass shop that does work on its behalf. No network or TPA, to my knowledge, requires 100% of the glass companies that do its replacements be members of the Auto Glass Safety Council™ to validate that its members are indeed completing replacements according to the AGRSS® Standard.

There are insurance companies that require auto glass shops that do replacements for their policyholders to complete them according to the AGRSS® standard. But what, if anything, do those companies do to enforce their own requirement? I’m not sure the answer to that question, but I’m not aware of anything more than an auto glass company being required to just say that they do installations according to the AGRSS® standard.

Do insurance companies ask you to install used glass on older cars or on cars involved in collisions? That claim has been made recently and that request is not allowable under the AGRSS® Standard. If asked would you install a used part in a consumer’s car when you can’t determine how it may have originally been installed?

Here are a few questions that are important to ask if you say you follow the standard, but don’t use a 1 to 4 hour fast cure Safe Drive Away-Time (SDAT) urethane:

·         If you’re an auto glass shop that uses a urethane that requires 24 hours or more to provide a SDAT do you actually inform your customer that they can’t drive their car for 24 hours?

·         Do you really think that if your customer is told that the car isn’t safe to drive for 24 hours that they actually will follow your instructions?

·         What do you think happens when you do the installation at their place of work knowing that they will be driving at the end of the day?

If the urethane you’re using requires a specific humidity and/or temperature level to cure properly, do your auto glass technicians have equipment with them that tells them that they are in compliance with the urethane they’re using?

What do you do if you encounter rust when doing an installation? Do you do the repair required to ensure that you comply with the standard? Do you go ahead with a replacement when there is rust damage that must be repaired according to the standard without actually doing all that needs to be done to ensure compliance? Would you walk away from a job if the customer won’t do what is required to fix a rust issue? It’s not easy to follow the AGRSS® standard.

To be sure, to do all that is required to be done by an auto glass company, auto glass technicians that perform the replacements and those who are tasked to keep proper records to execute all of the deliverables of the AGRSS® Standard isn’t easy as I said, but it is certainly achievable by companies and auto glass technicians that care. Fully knowing that a company or network or TPA that professes it follows the standard can certainly be called into question. The only way to know if some company is truly conforming to the standard is to be validated it by an independent 3rd party company.

The standard is a challenge. It is made to be. Validations can only be confirmed by an independent 3rd party organization approved to complete the inspection of an auto glass shop that says it adheres to the standard. To proclaim that you follow the AGRSS® Standard and not also back it up with an independent 3rd party verification would be similar to saying that the Affordable Care Act and HealthCare.gov has been a rousing success from its rollout on October 1st. The Affordable Care Act and HealthCare.gov may indeed ultimately provide what some profess that it will provide, but just saying so doesn’t mean that it has or will.

By the way, just because you are a registered company with the Auto Glass Safety Council™ and follow the AGRSS® Standard doesn’t mean that insurance companies or consumers will beat a path to your door. Not yet anyway. Doing the right thing when it comes to ensuring your customers safety should be enough.

There will certainly be those who read this blog who will disagree with me as to the “how” we ensure that consumers are protected when it comes time to having their glass replaced, but ensuring that consumers receive adequate protection when having auto glass replaced should be a concern to us all. That is of course if you care about consumers and the AGRR industry you wish to participate.

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 – A “Reasonable” Path to Follow

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

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

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

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

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

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

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

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

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

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

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

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

Just sayin’……………

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Just Sayin’ Blog – Inconvenient Truth(s)

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

 

 

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

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

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

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

 

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

 

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

 

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

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

Sound advice from a true winner.

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

 

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

 

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

Just sayin’……

 

  

 

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


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

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

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

 

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

 

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

 

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

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

 

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

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

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

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

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

 

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

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

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

 

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

 

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

– Charles Dickens, A Tale of Two Cities 1859

 

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

 

So if you’re asked the question,

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

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

Just sayin’.

 

Cartoon courtesy of weblogcartoons.com

 

 

 

 

 

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Just Sayin’ Blog – Auto Glass Networks – Part 2

Cartoon courtesy of TomFishburne.com

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

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

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

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

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

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

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

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

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

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

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

  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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