Posts Tagged customer
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:
- How many rings or seconds it takes a network to answer a telephone call from someone reporting an auto glass loss;
- How many seconds or minutes a policyholder is on hold while reporting the loss; and
- 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?
- 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:
- RELIABILITY – A company’s ability to perform the promised service dependably and accurately;
- ASSURANCE – The knowledge, competence and courtesy of employees and their ability to convey trust and confidence;
- TANGIBLES – Physical facilities, equipment and appearances that impress the customer;
- EMPATHY – The level of caring, individualized attention, access, communication and understanding that the customer perceives;
- 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.
- 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.
- 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.
- 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.
- What is the percentage of dealer or original equipment manufactured parts (OEM) used in a replacement versus non-OEM parts priced via NAGS® (National Auto Glass Specifications®)? Why is this important?
If an AGRR retailer has a higher percentage of OEM glass versus non-OEM it is costing the network and/or the client a whole lot more money.
Now back to TPAs versus networks. There are certainly other important metrics that networks track and report to current clients and tout to potential clients that use other networks and TPAs. Every network presumably wants its clients customers serviced by the best AGRR retailers that provide the highest level of customer service, but let’s face it, price versus service unquestionably creeps into the decision-making process of what AGRR retailer is referred a glass loss or not by a network.
That can be especially true if the network is using a “buy/sell” or “spread” pricing model for its clients. The network “buys” the glass repair or replacement from an AGRR retailer and then “sells” the repair or replacement to its customer at a higher price or “spread” that covers the networks cost to operate plus its profit. Do you ever get those calls from a network asking, “If you just give me another point or two on the NAGS discount I can keep sending you jobs” with the implied message if you don’t……? Probably you have.
In my last blog titled “Network Participation Agreement – Special Update” I wrote:
“From the view of this blog, transparency only serves to benefit consumers in making informed claim decisions, making their policy dollars work to their fullest, and identifying safe auto glass replacement services.”
How much transparency is there in how networks or TPAs report metrics? Well, last Friday glassBYTEs™ reported in a press release titled “Lynx Services Amends Contract Services Agreement” that the “Pittsburgh-based Lynx Services will amend its contract services agreement effective September 12. The most notable addition to the agreement is the availability of online scorecard access for shops. These scorecards will provide auto glass shops with performance records based on a variety of factors called Key Performance Indicators (KPIs).” This is definitely a big step in the right direction that allows AGRR retailers to see metrics (KPI’s) showing their performance. Perhaps other networks and TPAs will follow in a similar fashion? That should certainly be a welcomed change.
As I also suggested in my last blog, as an AGRR retailer you might want, “continue to focus on the customer and provide exceptional value with outstanding transparency.” In the long run exception value and outstanding transparency will pay off.
Today marks the 11th anniversary of 9/11.
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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.
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Today I’m talking with Marc Talbert, Vice President and Managing Partner with Guardian Auto Glass, LLC. Marc was formerly the president of PGW Auto Glass Wholesale, LLC until he left the auto glass manufacturer and wholesaler in late 2009. In the Fall of 2010 Marc, along with Jim Latch (a former executive with PGW Auto Glass and PPG Industries, Inc.); and Jerry Ray and Neil Smith (who passed away on June 17, 2011) who together were founders involved with Glass Pro and Elite Auto Glass formed a partnership titled LRST LLC. The four equal partners joined with Guardian Industries and LRST was given the management responsibilities of Guardian Auto Glass, LLC. This unique partnership was formed to grow the number of stores under the Guardian Auto Glass banner. The goal is for Guardian Auto Glass to provide automobile glass repair and replacement (AGRR) services using a local ownership/management model. The model looks very similar to the one that Wes Topping and his partners (including Jerry Ray and Neil Smith) used to rapidly grow Elite Auto Glass across the western United States before selling to Belron in 2005. Guardian Industries Corp. had owned the platform for years. At this time Guardian Auto Glass operates over 90 stores in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Ohio, Pennsylvania, Virginia and West Virginia.
DR: I know that you and your partners have been busy the past two years working on growing Guardian Auto Glass and I appreciate you taking the time to talk with me today Marc.
MT: Thank you for the opportunity to participate.
DR: What year did you get your start in the AGRR industry and what was your first position in the industry?
MT: My ARG (automotive replacement glass) experience began in 1994 as manager of PPG’s branch distribution centers in Dallas/Ft Worth. I started my career with PPG in 1980.
DR: What were the positions and responsibilities you’ve had since you first started in the industry in 1994?
MT: I relocated to Southern California in 1995 as manager of PPG’s western distribution locations, then to Pittsburgh in 2003 with responsibility for PPG Auto Glass, LLC.
DR: Which of those jobs did you find most interesting and why? And which was the worst one and why?
MT: Honestly all were equally interesting because they presented increasing challenges and responsibilities. Working in the field for the first 23 years of my career I anticipated the move to PPG’s corporate office would be the most intimidating, but I was fortunate to work with some very good people who made the transition much easier, and even enjoyable.
DR: You left PGW Auto Glass in 2009 as a President and your responsibilities at PGW included wholesale sales and distribution for the company. What made you jump from the wholesale side of the AGRR industry to retail?
MT: I had the opportunity to partner with Jim Latch who I had worked with at PPG and two of our long-time customers Jerry Ray and Neil Smith. Jerry and Neil brought significant and successful retail experience along with a proven business model, and together we saw an opportunity to partner with a company like Guardian to expand their retail business. There remains quite a gap between the largest US retail provider and the next largest and one of our goals is to try and reduce this gap.
DR: About a year after you entered the LRST partnership Neil Smith sadly passed away. Did his passing change the plans you’d made in your goals at Guardian Auto Glass?
MT: Neil’s passing was certainly a shock to us and we miss his experience and counsel every day, not to mention his humor. Our plans to grow Guardian Auto Glass will be more difficult to achieve without Neil but we have not altered our plans.
DR: What are your key responsibilities at Guardian Auto Glass?
MT: Jerry and I share the responsibilities for new market growth and acquisitions, and Jim has responsibility for managing the legacy Guardian locations and our administrative support center in Worthington, Ohio. We all share responsibility for the management of Guardian Auto Glass.
DR: Did you find the retail side of the AGRR industry a little harder than you had expected it to be?
MT: I think you ultimately have similar issues with retail and distribution, or any business for that matter. As you effectively pointed out in a recent blog you try to attract the best people and provide enough support for them to succeed without bogging them down with non-value added work. That is the focus of our business and the core of our local ownership model, and what we believe differentiates Guardian Auto Glass in each of our markets. Having local owners with a stake in our collective success changes many aspects and costs of traditional corporate management, and we believe is the key to growing profitably.
The primary difference we’ve learned in retail is the need in some cases and with certain third-party administrators to retain customers who have chosen a Guardian Auto Glass location to complete work we’ve already sold through our local marketing and customer relationships. This is a dynamic we did not face in distribution and one we are increasingly concerned with.
DR: How many brick and mortar locations did Guardian Auto Glass have before you partnered with Guardian on this new venture versus the number that the company has today? How are you doing on achieving the strategic goals that were set for the first two years of the venture?
MT: We currently pay rent at over 90 locations and I believe Guardian had 25-30 locations when we started. The economy and lack of weather is certainly not generating a tailwind for us this year but we have continued to expand as anticipated and build a competitive infrastructure.
DR: Many in the industry are waiting for Guardian Auto Glass to do something with the call center/third party administration (TPA) that you operate, especially with Jim Latch participation in the partnership. Does Guardian Auto Glass have any plans to become a bigger factor in the call center or TPA side of the industry?
MT: Guardian’s network is not part of Guardian Auto Glass and is not operated by LRST. As you point out Jim’s experience in this area provides a unique opportunity for us and we anticipate working with Guardian’s network to help expand both businesses.
DR: What advice can you offer other retailers on how to successfully compete against Safelite®?
MT: I don’t think we are in a position to provide advice to anyone, but we are concerned as I’m sure many ARG retailers are with maintaining access to our customers who have chosen to have their vehicle glass serviced by one of our Guardian Auto Glass locations. We will continue to direct our efforts and investments in building our local customer relationships, and retaining access to those customers will be an area of increased focus for us going forward.
DR: Where do you see Guardian Auto Glass in 5 years? What will make you and your partners feel that it will be a success?
MT: Our mission is to grow profitably through our local ownership model and to continue our expansion, so we will need to see how we measure up at the end of our 5th year. We remain excited about the opportunities in the ARG retail market and will continue to seek strategic partners and existing businesses in all markets to help us reach our goals.
DR: How’s your golf game coming along? I know that in some circles you’re considered to be a tough guy to beat in a game.
MT: Must be very small circles, however I would welcome a rematch with you and others free from the constraints of customer golf.
DR: Perhaps. I look forward to the opportunity to a rematch. Some of my team members I’m going to change out, as I would guess you will too. Loser pays?
Thank you again for taking the time to talk with me Marc. I know that many in the industry are looking for someone, some company to step up and take on Safelite. Perhaps Guardian Auto Glass can be one that does. Good luck in achieving the goals that you have for Guardian Auto Glass.
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