Posts Tagged IGA

Just Sayin’ Blog – Becoming Somewhat Extraneous

Let’s face it, the National Auto Glass Specifications (NAGS) List Price™ used in the auto glass replacement (AGR) industry for decades that has a pricing (and parts numbering) mechanism seems to have become extraneous.

Glasslinks.com has information that was detailed on a NAGS™ web site from 1998 that provides the following historical information on the company:

From N.A.G.S. Website of 1998:

National Auto Glass Specifications was founded in 1927 by Madison Tracey who made patterns to cut flat glass for automobiles. He assigned part numbers for these patterns to ‘catalog’ them for his inventory purposes. NAGS Part Numbers were soon adopted as the industry standard to identify glass.

  • The first NAGS glass pattern (#1) was for a 1926 Model K, Series 5, Touring and Roadster Chevrolet.
  • The oldest car for which NAGS has a pattern is a 1915 Touring and Roadster Ford; Pattern #49 is a 2-part (upper and lower) windshield pattern.
  • NAGS first “bent” glass Part Number was #XXX1 for the back glass on a 1940 Lincoln Zephyr
  • The first curved windshield for which there is a NAGS Part Number is #XX22, for a 1941-42 Chrysler.

In the 1940s, curved glass appeared and the pattern business declined. NAGS continued to assign Part Numbers to catalog curved and flat glass and published the ‘NAGS Catalog.’ NAGS also published a chart to ‘calculate’ the price of flat glass.

In the 1950s, manufacturers were in conflict over their published list prices. As a neutral party, NAGS was asked to assign list prices to NAGS part numbers, establishing the NAGS List Price. These list prices reflected the industry practice of discounting and were based on manufacturers’ truckload prices. NAGS started publishing the part numbers with prices, establishing the ‘NAGS Calculator’.

Through the 1980s, NAGS information was available exclusively in print form. There was little change in the industry business practices. In the late 1980s, change started happening quickly as advances in technology produced more curved, tinted and coated parts. Networks began operations and electronic commerce was introduced to the industry.

In 1991, NAGS joined the global information marketplace through its acquisition by Thomson International, a world-wide publishing and information services company, and began development of the GlassMate® Database. Today, this database is used in many ways in support of the Auto Replacement Glass industry; e.g., part identification, inventory management, purchasing, invoicing/billing, EDI, auditing, etc. The vehicle configurations in the database have been adopted as Code Source #474 by the X12 Accredited Standards Committee of the American National Standards Institute.

 

* In 1991 NAGS™ was sold to Mitchell International and Mitchell International was acquired in 2013 by KKR and Co. L.P., a large global private equity investment firm.

When I first entered the AGR industry in the 1970’s the NAGS™ list price was factored by the auto glass truckload discount listing produced by the then leading industry auto glass original equipment and replacement manufacturer. The NAGS™ formula for computing the suggested NAGS™ list price was easily understood by everyone in the industry. As a retailer you could calculate a new NAGS™ list price by using the truckload pricing list that manufacturers provided to retail customers. There was always a lag period between the time the manufacturer provided its current truckload price list and when NAGS™ then published a updated list price schedule making it available to the AGR industry. Life was certainly much simpler then.

With the rise of the “global economy” over the past several decades, the subsequent improvement in quality (certainly debatable) of auto glass manufactured from countries with lower cost from around the world, along with cost cutting achieved by domestic manufacturers; many auto glass parts have become a commodity at the wholesale level. With the mix of manufacturers the long-used NAGS™ formula to determine the list price of NAGS™ parts may have become somewhat outdated. The vaunted formula for determining the NAGS™ list must have greatly changed over the years. It was once a very open and transparent pricing mechanism.

I found an article on glasslinks.com from December 1998 titled “NAGS™ Announces Benchmark Pricing for 1999”. It’s a great article that in detail describes the “Benchmark Pricing” model NAGS™ used when the company reevaluated the list price for auto glass parts (and at the same time made changes to NAGS™ labor hours). According to the article, the revaluation that NAGS™ made reduced the list price for windshields by 68% and tempered by 53%, with NAGS™ labor hours reduced by 20%. The reduction in NAGS™ list price was intended to eliminate the large discounts that retailers were offering to insurance, commercial and cash customers off previous NAGS™ list price schedules. Discounts at the time ran as high as 65+% off the NAGS™ list price schedule with the thought that the revaluation and new re-engineered NAGS™ list price schedule would become the actual price charged by retailers to the retail customer base. That was the idea anyway…. We all know how well that worked out for retailers.

When NAGS™ was sold in 1991 to Mitchell International there was a concern raised by many retailers at the time that the treasured independence of NAGS™ pricing, that was sought out by manufacturers’ in the 1950’s, would be at risk. A major customer of Mitchell International was the insurance industry.

It’s difficult enough to fully understand pricing offered from AGR manufacturers and suppliers to retailers. Pricing is rather fluid, meaning that you receive whatever pricing you can negotiate with manufacturers and/or suppliers and there is no consistency upon what pricing is being offered to retailers. So how does or can NAGS™ have a formula today to determine suggested NAGS™ list price for auto glass parts which can be consistently used across the industry?

In an “open letter” dated May 5, 2014 written to Mitchell International/NAGS and signed by Independent Glass Association President Matt Bailey, the company was asked,

“What are the specific sources that you have collected data from since independent glass retailers and the referenced suppliers have all confirmed wholesale price increases?”

I haven’t heard if Matt received a reply to his question.

The question was a reasonable one and was related to an industry wide 5% +/- price increase put in place by a number of AGR manufacturers/suppliers to retail customers instituted on April 1, 2014. It is difficult to understand how a 5% +/- price increase from AGR manufacturers/suppliers could result in a reported .7% increase in the NAGS™ list price for the top 100 NAGS™ parts as detailed in a glassBYTEs.com™ article titled “NAGS Spring Calculator Released, Average Price Increase of Top 100 is 0.7 Percent” written by Jenna Reed. The article stated,

“The Spring 2014 National Auto Glass Specifications (NAGS) International Benchmark Calculator has been released and shows the average price change of top 100 most popular parts was a 0.7 percent increase since the last catalog. The total average price change of top 10 parts was an increase of 0.4 percent.

To view the top 100 parts, click here.

In a comparison from the Winter NAGS Calculator 2014 to the Spring NAGS Calculator 2014, the largest price increase by percentage was on the 2005 Honda Civic windshield (FW02184GGYN), which increased 4.5 percent. To view this analysis of largest price increases by parts among the top 100, click here.

In the same comparison from Winter to Spring, the largest price reduction was on 2012 Ford Escape windshield (DW01684GTYN), which is down 3.07 percent. To view an analysis of the biggest price reduction among the top 100 parts, click here.”

It seems odd doesn’t it that prices from suppliers would go up 5%+/- and the top parts would rise less than 1%.

There are countless retailers that use either a cost plus, flat or tiered pricing models to consumer and commercial/fleet customers adding a “mark-up” to their actual cost of the glass being replaced. Often those prices include both the labor and kit charge required to complete the installation. This provides those that use these models comfort that they have a consistent profit margin to operate under. Networks and TPA’s still use a discount to NAGS™ pricing model to most of their clients.

A group of industry leaders formed The Chicago Auto Glass Group over 10 years ago to address industry pricing. The group worked hard at developing a “white paper” on benchmark pricing and suggested that the AGR industry move to a pricing model they detailed as follows,

“This Guide is intended to serve solely as a recommendation for establishing benchmarks and is in no manner intended to set or determine actual prices for auto glass replacement or to reduce open competition in the local, regional, or national market place.”

You can click on this glassBYTEs.com link to read the entire Chicago Auto Glass Group proposal. The Chicago Auto Glass Group wasn’t successful in pushing the benchmark pricing proposal, but many in the industry viewed the proposal as a positive step in making industry pricing fair to all stakeholders.

AGR industry stakeholders should, on occasion, evaluate the pricing model(s) that they use, discard old or outdated ones and replace them with ones that are relevant. What do you think?

Just Sayin’.

 

 

Reference materials:

   http://www.glasslinks.com/newsinfo/nagsbnch.htm

   http://www.usglassmag.com/AGRR/Backissues/2003/0305/future.htm

   http://www.glassbytes.com/newsNAGSWinter20130114.htm

   http://www.glassbytes.com/2014/05/nags-spring-calculator-released-average-price-increase-of-top-100-is-0-7-percent/

   http://www.glassbytes.com/2013/09/mitchell-international-owner-of-nags-purchased-by-kkr/

   http://www.glasslinks.com/newsinfo/nags_history.htm

   http://www.usglassmag.com/AGRR/Backissues/supplement/NAGSNOTES.htm

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Interview with Eric Asbery, President/CEO www.Equalizer.com

Today I’m talking with Eric Asbery, President of   Equalizer Industries, Inc., an undisputed premier provider of innovative tools and products for the auto glass repair and replacement (AGRR) industry in the world. The company was founded by Eric’s father Ray Asbery in 1987. Ray unexpectedly passed away last September 27th at the age of 67.

Over the years Equalizer has received many awards, including several “Best of Show” awards. Company executives have also received a variety of industry awards including Eric’s being recognized in 2007 by the National Glass Association (NGA) with its prestigious NGA “10 Under 40” award; in 2005, Equalizer Vice President of Sales, Gilbert Gutierrez was awarded the prestigious Len Stolk Award” and Ray was honored by being awarded in 2004 the “Carl Joliff Award” by the Independent Glass Organization, in 1994 the NGA’s “Professional of the Year” and in 1992 Inc. Magazine’s “Entrepreneur of the Year” award. In fact, Auto Glass Week 2012 will be dedicated to Ray’s legacy.

Equalizer is headquartered in Round Rock, Texas which is about 15 miles north of the Texas state capitol of Austin.

 

DR:  Thank you very much for taking the time to answer some questions Eric. I’m a big fan of Equalizer and I only wished that the tools that your company has developed and brought to the market over the past 25 years would have been available when I first started as an auto glass installer 40 years ago.

Eric Asbery:  I hear that very often. As I was growing up, my Dad was transitioning from being an auto glass technician to a manager over several locations. I can remember him always talking about how there were no specific tools that technicians could use and that the taking glass out of automobiles was getting harder.

 

DR:  I know that your father got his start in the AGRR industry with U.S. Auto Glass. How did long did he work for Joe Kellman and what were his responsibilities while at U.S. Auto Glass?

Eric Asbery:  Actually, Dad got his start in AGRR as an installer in Louisville, Kentucky in the early 1960’s. He was hired in 1985 by Joe Kellman to manage the Austin, Texas market for U.S. Auto Glass. He worked there until late 1987.

 

DR:  What was the impetus for Ray to start the company and how was he able to envision the tools he developed over the years?

Eric Asbery:  Early in 1987, Dad and his technicians encountered the problematic 1986 Ford Taurus. It was a radical new design and the lower part of the windshield was attached by a thick, heavy bead of urethane that was nearly impossible to use conventional tools to remove it without breaking the windshield further. Many technicians were so frustrated by it that they resorted to just breaking it out with a hammer. One Saturday morning, after several of these tough jobs had come through his shop, Dad woke up with the design for the original Equalizer tool in his head. He went to work that Monday with the first Equalizer after building it over the weekend in our garage.

Dad was always inventing. He was a working man that really enjoyed working with his hands. He was always trying to improve upon any working situation he encountered. He listened to those around him, when they encountered a problem with their daily work; he always tried to make their job easier. Whether it was a tool or technique, it was very enjoyable for him to make work more productive for everyone.

 

DR:  Equalizer is known for its products all over the world. How did that happen and what are you planning to maintain and grow that presence, especially beyond North America?

Eric Asbery:  In the early days of Equalizer, we received a lot of attention on a worldwide scale. Every trade show we exhibited at or magazine we advertised in, people who did auto glass anywhere in the world were drawn to us because we were producing tools that hadn’t existed before. The timing was right and we knew it. We were fulfilling a need, right when it was needed the most. We simply focused on providing great customer service and the world came to us.

We now have over 100 different distributors worldwide; we are constantly traveling, researching current automotive glass installation trends and training the appropriate people necessary to satisfy the needs of technicians everywhere. As the global economy allows, we are always in search of new areas to market and support our products.

 

DR:  Equalizer has always been known as the dominant company for auto glass replacement tools. Do you plan to do the same for repair?

Eric Asbery:  The auto glass repair market is something we have always invested in. There are several great repair systems out there and we have carried several of them over the past several years. If our coverage of this market is consistent, then there is a chance we can become the dominant supplier. However, our primary goal is to ensure that any product we offer gives the auto glass technician the best opportunity to do their job effectively and easily.

 

DR:  Many people are always looking forward to the new Equalizer catalog. In the last several years, you also established a great presence on the internet. Do your customers still like to look through a paper catalog or is there a shift to see the products through electronic media?

Eric Asbery:  We have found that even though there is an ever-growing part of the industry that is becoming electronically inclined, most people still like to “flip through pages” of our catalog and that will be the direction we will continue to go until we sense that a major shift to electronic media is on the horizon. We think our catalog will continue to stay in printed form for quite some time but we always alternately develop and make available electronic versions of our promotional or marketing materials.

DR:  When did you join Equalizer and what areas of the company were you responsible? How did your responsibilities grow over the years?

Eric Asbery:  I have been at Equalizer since day one. My role at Equalizer, until 2005, had been directly related to developing Equalizer’s brand, image and marketing presence. In 2005, Dad (then 61) and I began work on my transitioning to the daily management of Equalizer. We both considered that transition complete in late 2010. Although Dad had never had any definitive plans for retirement, we all figured he’d work at Equalizer into his 80‘s. In retrospect, I am very relieved we had this foresight.

 

DR:  I know that many of the tools that Equalizer has developed over the years have unquestionably helped reduce countless injuries of auto glass technicians. The number of cuts, lacerations, back and neck strains requiring visits to hospital emergency rooms has had to have gone down by those using your tools and products. I know many companies supply auto glass technicians with Equalizer tools just for that reason. Hopefully this question doesn’t make you feel uncomfortable, but do you hear from those who buy and use your tool thanking you for how Equalizer tools make it easier for them to do their jobs?  

Eric Asbery:  It is a very humbling experience to hear from someone who has benefited greatly from something you created for them. We receive feedback from hundreds of technicians each year thanking us for offering these products to them. My favorite memories from over the years have been when a technician has walked up to my Dad or any of us working at a trade show or open house and proceeded to tell a “before and after” story about our one of our tools and how it has greatly impacted their life in a positive way. It is truly the best part of my job.

 

DR:  When new car models come out each year they often have auto glass parts factory-installed in ways that many responsible for replacing those parts feel were designed by diabolical design engineers who seem to try to cause problems. How quickly do you start looking for replacement solutions for those parts that could cause difficulties?

Eric Asbery:  We have a network of “Equalizer Inventors” who are mostly auto glass technicians who have worked with us to design or create products over the years that we sell and/or produce for them. These technicians will encounter new design problems during their job on a daily basis and within a very short time they inform us of it. In many cases, they will offer a potential solution based on their experience and that’s what gets the ball rolling to create a product that will simplify the experience.

 

DR:  With the sudden great loss of your company’s leader, mentor, friend and your father, what plans do you have in the future to continue to grow the business and provide the AGRR industry with leading edge and innovative products in your leadership role?

Eric Asbery:  Since the beginning of our company, our focus has been to serve the needs of auto glass technicians everywhere. We developed relationships and processes to ensure we have been on the leading edge of technology for this industry. Nothing has changed or will change in this area. This is why Dad founded this company, this is our purpose.

We are always on the lookout for the next big thing, the next viable trend. Be it a tool, a process or just an idea or concept. We will travel, learn, adapt and teach. We will continue to gain from the experience of technicians in the smallest auto glass shop to the biggest national chain. We will always listen, respond and provide the best products available. This is what we do.

Thank you very much for spending the time to answer my questions Eric. You have a great company and I wish you continued great success.  You and your team have provided the AGRR industry with amazing products. I know that many join me in anticipation of the next great product that you develop to further improve the installation process as well as the safety of technicians around the world. Thank you for all you and your company do.

Just Sayin’

Equalizer Industries, Inc.

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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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4 Comments

Mike Paley – Retail auto glass entrepreneur

Mike Paley is someone I think you should get to know.  He experiences all of ups and downs of being an entrepreneur in the auto glass repair and replacement (AGRR) industry.  Mike is the owner and president of Freedom Glass, an independent auto glass repair and replacement business providing auto glass repair and replacement services to customers in the greater Richmond, Virginia area markets.  He started his AGRR business in 2004 after working as Service Manager at a car dealership in the Midlothian, Virginia area.  Mike served as a Gunnery Sergeant in the United States Marine Corps, where one of his assignments was the business of recruiting.  His patriotism remains steadfast, as is evident by his aptly named business, Freedom Glass and its red, white and blue colors.    

Last year at the 2010 Auto Glass Replacement Safety Standard® Council (AGRSS®) Conference, held in Oakbrook Terrace (Chicago), Illinois, Mike was honored for having the first auto glass company to successfully complete the AGRSS® independent third party validation process with a 100% score on November 11, 2009.  I know that it takes a lot of work to make sure that your organization follows AGRSS® and being the first company to be validated and pass the validation with a score of 100% was an amazing feat.

Additionally, at the September board meeting of the AGRSS® Council Mike was elected to the Board of Directors of AGRSS®.

On a personal side, Mike is the proud father of three sons; Jason, Justin and Austin, all of whom reside in the Richmond area. 

First let me thank you for your military service Mike.  I’d then like to congratulate you for being the first AGRR company to be validated by the auto glass safety organization.  Sadly, that is one experience (or risk) that many in our industry are unwilling to allow their companies to have. 

With an estimated 45 – 50% of the auto glass that’s repaired or replaced in the United States being installed by independent single owner businesses, Freedom Glass is a great example of the vast number of auto glass repair and replacement companies in the AGRR industry today.  I think many in the industry would like to hear from someone such as you Mike, a strong competitor providing the highest level of quality workmanship to the customers in your marketplace.  What attracted you to the AGRR industry?


Mike Paley:  “Attracted” is an interesting term.  I think it was more fate than attraction!  While transitioning from my job as a Service Manager, a chip in my windshield spread into a crack that required replacement.  During the replacement process, the technician asked how long it had been chipped.  When I told him three years he asked why I never called to have it repaired.  I confessed that I had never heard of repairing a chip.  (As a dealership Service Manager, no one had ever approached me about repairing chipped windshields for our service clients bringing their vehicles in… hint to those in marketing).  So I began looking at every parked car’s windshield and was surprised to see how many were chipped.  From there I started researching the “repair” industry and I felt it was  a job I could perform without employees for the time being.  And I’ve always been confident  that I could “sell” anything that I believed in.  So Freedom Glass was created with only the repair industry in mind.   

In May of ’05 I started to contemplate adding replacements to our services.  But since I didn’t know anything about replacing auto glass I needed to research that, just as I had done earlier for repairs.  During my research, I learned just how critical windshields were to safety in the event of a crash or collision.  Shortcuts or errors could be catastrophic, so I wanted to make certain I was replacing windshields correctly.  I contacted a glass company in Jacksonville, Florida, and asked if I might come down to shadow a couple of their technicians for a week.  They graciously agreed, and in July I went down.  I learned a tremendous amount in a very short time from those two technicians.  In September I traveled to Charleston, South Carolina to attend the NGA’s Auto Glass Technical Institute (AGTI) course.  Exactly one year after opening our doors, we began doing replacements in addition to repairs. 

 

Without a background in the AGRR industry, what prompted you to want to enter this industry as a business owner rather than an employee?

Mike Paley:  Two words come to mind as for why I wanted to own rather than work for the business; leadership and responsibility.  The Marine Corps instilled in me leadership by example.  I have never asked, nor expected, an employee to do anything I would not be willing to do.  Case in point, I required of myself to get trained and certified before I ever brought on a technician.  That enabled me to learn what was expected and required to perform the job.  As the owner, I am responsible for the technicians and their ability when I place them in the field.  To this day, we have never installed a windshield whereas an NGA certified technician was not at that job.  Some owners may not deem that necessary, but it is for me!  Someone is trusting Freedom Glass with their most precious cargo, and I take that responsibility very seriously.  Another responsibility the owner has is the material his technicians have to work with.  I often say the greatest technician in the world can’t be great if his company’s owner refuses to provide him with the best material.  But likewise, if an owner provides the absolute best material available and the technician is untrained or doesn’t care, the installation can still be compromised.  It takes both.  

      

Independents have to stay competitive by finding ways to differentiate themselves from not only the larger companies they compete against in their local markets, but also other independents such as themselves.  What advice can you offer independents such as yourself to stay competitive against the larger chains?

Mike Paley:  There are several things that we emphasize.  We encourage our clients to call me if there is ever a question, concern or issue about a job after our technician has left.  Plus, I let people know that when you’re dealing with a company our size you’re no more than two phone calls away from talking with our President; try calling a “big” company to talk with their President.  I would strongly encourage smaller independent shops to focus on quality, not quantity.  I would rather have a technician do five jobs a day correctly, then eight incorrectly.  I also express to clients and contacts that because we don’t have a TPA feeding us business we must rely on referrals and word-of-mouth.  So we “ask for referrals”!  If you don’t ask, you probably won’t receive.    

 

By your being the first auto glass company to pass the AGRSS® independent third party validation, what advice do you offer those in the industry who are considering joining the association?  Why did you join and why should other AGRR companies join AGRSS®?

Mike Paley:  There are a multitude of associations and organizations that an AGRR company can join, and they all have their place.  But for me, our participation in AGRSS® is my priority because its focus is on the safe installation of windshields.  And without that, nothing else matters!  To me that is.  And so, if an auto glass company is genuinely concerned about the safety of its clients, they owe it to themselves, their staff and their clients to be a part of AGRSS®.

 

Why did we join AGRSS®? Let me first say that it took some time for us to join AGRSS® and the reason was purely fiscal.  I had read the Standard and recognized that we were following it, but for anyone to be able to simply write a check (and sign an affidavit) stating they were doing installations correctly without any way to substantiate it didn’t sit well with me.  Perhaps I was being too cynical, but I expressed this concern to someone at AGRSS®, and was advised that a validation process was in the works.  So I politely asked to be contacted once that validation came to fruition.  Several months later I was contacted and advised the validation process would be rolled out soon, so we jumped at the opportunity to demonstrate that we were indeed performing our replacements correctly and in accordance with the AGRSS® Standard.  Unfortunately, the roll out didn’t take place as soon as we had expected.  But ultimately validations did start and we are thrilled to have been the first auto glass company in the Nation to pass the third-party validation with 100% compliance.   

 

Why should other AGRR companies join AGRSS®?  David, I didn’t realize my “sometimes” lack of being politically correct would be tested this early!  While I do believe that every AGRR company “should” be registered with AGRSS®, I know that not all companies can be!  As someone who is still very close to the front line of windshield replacements, I will tell you that far more windshields are being replaced improperly than should be the case.  And I’m confident that our area is not the exception, but rather the rule.  So let me answer your question this way.  I feel as though any auto glass company that “claims” to be performing safe and proper windshield replacements should be, and should want to be, a registered company with AGRSS®!!!  I don’t know why those companies wouldn’t be excited about being registered with and connected to AGRSS®.  After all, AGRSS® is trying to educate and promote that there is a difference between a safe and an unsafe windshield replacement.  And they’re promoting those shops that care enough about wanting to keep their clients safe.  So I guess I’ll answer your question with a question.  Why would any auto glass company performing replacements properly and safely NOT want to be a part of AGRSS®?  Personally, I can’t think of one reason! 

  

What can you share about the experience of what it was like for you and your people to go through the AGRSS® validation process that other registered companies will be going through in the next few years?

Mike Paley:  When I learned of our scheduled validation, I did get nervous.  But my nervousness stemmed from the validation process being new and perhaps there being some bugs in the system that may not have been worked out yet.  I felt we had a lot riding on the results of our evaluation.  So our company went over the Standard again, worked with our adhesive manufacturer representative and prepared for what I feared would be an interrogation.  Turned out it was anything but an interrogation.  The validator, who is not a glass-industry person but rather statistician or assessor, went down a list of questions that everyone familiar with the Standard will already know, and merely asked questions.  The questions weren’t tricky or deceptive.  It was almost as if our validator were simply curious as to what we were doing and why.  I likened it to a curious client watching and questioning a technician during an installation.  The one piece of advice I would offer everyone, regardless of your company’s size, is to have a trainer, manager, or owner present during the actual validation for each technician.  We found this to be invaluable to clear up any misunderstandings about nomenclature, verbiage or procedures.         

 

Regardless of the size of your company, whether you’re the biggest or the smallest, why doesn’t (or shouldn’t) everyone who installs auto glass strongly embrace AGRSS®?

Mike Paley:  I think every auto glass company should embrace AGRSS®, and its intent!  A major part of my presentation when a potential client calls in for a quote is to educate them on windshield safety.  Yes, I want Freedom Glass to perform their replacement, but most important to me is that they know what to look for and ask about.  For those AGRSS® registered companies in my area, if you didn’t already know it (but I suspect you do), I am constantly promoting you.  While I’d love to install every windshield needed in my area, I recognize that we simply can’t do it; we’re just not large enough.  So if someone elects not to use Freedom Glass, I strongly encourage them to contact a competitor who is also registered with AGRSS®.  Some may question my reasoning for that, but I do not.  As I tell everyone that will listen, my family and friends will be safe with their windshield replacements because they will have us do the installation.  However, I can’t protect those I care about from someone else’s windshield coming out during an accident and striking them.  So I feel as though it behooves me to insure that everyone has a safe windshield installation.  And with that, I believe it is in every AGRR owner’s best interest to promote education, not lowest price.  I don’t ever want to read another story about a fatality resulting from a windshield failure.  As much as I hate to actually say this, I believe there are two types of auto glass companies out here today; those who genuinely care about safety and those who will do anything for the almighty dollar.  At Freedom Glass we have, and will continue to, turn down any job that will not result in a safe installation.  Making a living is important to us, but not at the expense of someone else not living!       

 

What do you see as key opportunities for you (and for others like you) in the AGRR industry and what do  you feel differentiates you in the marketplace.

Mike Paley:  David, I sincerely believe AGRSS® brings us the single greatest opportunity to demonstrate to the driving public that those of us registered with and adhering to the AGRSS® are indeed putting safety first.  As the saying goes, a lot of glass companies talk the talk, but only a few of us walk the walk.  And again, the way we try to differentiate ourselves from our competitors is by educating.  I do not want a client because I’m the cheapest out there.  I want that client because they care about those persons in their vehicle, and they’ll heed our warnings, i.e. Safe Drive-Away Time.  I feel if every AGRSS® registered shop would spend more time educating and less time concentrating on price, some of the 800-lbs gorilla’s business would come our way and some of the fly-by-night installers would either leave the industry or get trained and certified.          

 

From your prospective, what do you see that is right with the industry and what do you see is wrong with it?

Mike Paley:  There are several things that I see as right in our industry, and that gives me reason to hope more positive things are forthcoming.  I sincerely believe that the formation of AGRSS®, and its validation program, is the absolute best thing that could have occurred for our industry.  I also know from attending the conferences over the years and talking with other glass companies around the nation, there are others that truly care about consumer safety and place that in the highest regard.  And while independents, especially small independents, can’t compete head-to-head with that 800-lbs gorilla in our industry, if we can work together to educate and demonstrate our collective professionalism, I believe that we can gain some of that gorilla’s market share.

As for what I see wrong in our industry, there are several things there as well!  Of course the biggest is that gorilla.  Anytime a company can have an affiliation with the majority of the insurance companies out here; answering their glass claim calls, dispatching their own installers, using the glass they manufacture, and getting paid a Guaranteed Average Invoice (GAI) price; that’s about as “wrong” as it can get for the rest of us.  And there are several “wrongs” I feel are being self-inflicted by many in our industry, including some by independents.    Freedom Glass does not, has not and will not waive any portion of a client’s deductible.  If a client wants a zero deductible, I encourage them to talk with their agent.  After all, if anyone reading this does waive even a portion of that deductible and our industry’s compensation keeps getting smaller and smaller, I would implore you to write a letter to AGRR Magazine as to how you’re doing that and staying profitable.  But the truth is, I already know!  And my company will never do anything to compromise anyone’s safety.  The other issue I see are the numerous installers who, after working for someone else, have decided to open their own auto glass company.  The problem is that while they may have the best of intentions and may even be very good technicians, their inability to quote and market properly is driving the value of our industry into the ground.  Often times these “new” independents will survive for a month or two based on family, friends and connections, then they begin calling other glass companies to inquire about performing subcontracting work for them.  Then, within six months their company is no longer in business.  And finally, we have those companies in our industry, large and small, that do not see the value and importance of training and educating their personnel.  To me, that’s a frightening shame.          

 

What industry associations or organizations do you belong and why did you join them?

Mike Paley:  We have been members of the Auto Glass Replacement Safety Standard (AGRSS®); Independent Glass Association (IGA®); National Glass Association (NGA®); and, National Windshield Repair Association (NWRA®).  We currently belong to only AGRSS®.  The reason we joined each of these associations was to learn more about our industry as a whole, each association independently including its goals and objectives, and to become certified by each.  I don’t believe we can ever learn too much.     

 

You may be uncomfortable answering this question, but what advice can you offer others in the industry that you feel could possibly help them improve their businesses?  Can you pass along any ideas on how they can grow sales in their markets in the difficult environment that the industry is facing?

Mike Paley:  I believe I’ve already addressed a couple of ideas, but let me offer this.  In my humble opinion, I believe owning an auto glass company is a marathon, NOT A SPRINT!!!  Go to work each day with the goal of educating everyone and making at least one friend.  Share something about auto glass safety with everyone you come in contact with.  Do those things and the sales will take care of themselves.  People ultimately do business with people they like and trust.  Sure, the cheapest guy may get the job today, but he probably won’t be around tomorrow when that client needs their service again.  So stay true to yourself, your clients and your industry.  It may be tempting to lower your prices or your standards, but once you’ve compromised them, they’re gone!             

 

And finally, one thing I have to ask you about is how your Carolina shag dancing is coming along with the Richmond Shag Club and how do you rate your dancing prowess versus your skills in the auto glass repair and replacement industry?

Mike Paley:  Talk about being blind-sided, LOL!  Having never danced until I reached the half-century mark, and always thinking I had two left feet, I’ve grown very confident in my dancing.  Five years ago you couldn’t have dragged me onto an empty dance floor; today you can’t keep me off one.  My skills in the auto glass industry have also grown tremendously, and with that, so has my confidence.  Without that confidence I would never have even considered accepting the honor of being nominated, much less elected, to the Board of Directors for AGRSS®.  Ten years ago I wouldn’t have dreamt of owning an auto glass company, but today I’m proud of where we stand and the reputation we’re building daily.  And that’s my hope for the future of our industry as a whole, to grow in skills and knowledge, abilities and confidence.  Can we learn more?  Absolutely!  Can we get better?  Without question!  Are we passionate?  We better be; people’s lives depend on us!!!   

 

I want to thank you for taking the time to answer my questions Mike.  I very much appreciate your candor and willingness to share your views on the industry.  We both have a great desire to see everyone who runs and operates a glass company in the AGRR industry find ways to remain viable during the difficult competitive landscape that exists, especially today.  With all of the changes that have taken and are taking place in the industry you need to find ways to compete in the marketplace and not only maintain the customers you have, but grow your business by differentiating yourself in the marketplace.  I hope that many in the industry can see through your experiences and advice in opening Freedom Glass that there are ways to be successful in the industry, regardless of the size of your company.

Thanks again Mike and I wish you great luck in the prosperity and growth of Freedom Glass.  I’m glad I’m not currently competing against you in Richmond.

Just sayin’………….

 

p.s.  The Auto Glass Replacement Safety Standard (AGRSS®) changes its name to the Auto Glass Safety Council® effective January 2012.

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Associations

What associations have you joined?  The Merriam-Webster Dictionary defines associations as “organizations of people having a common interest”.  The definition seems fairly straightforward and easy to understand.  When you join a group with those who have a common interest it could be for something such as a golf club, a church group, the AARP, the NRA, a political party, the Veterans of Foreign Wars, even a company that you work for, etc.  The common interest which you have could be a hobby, a sport, an industry group or it could involve a social issue that you feel strongly that motivates you to join an association.  The list of associations and common interests are endless.  Common interests can remain for a short or long-term period of time.  In all likelihood a common interest is something that you’re probably passionate about.

If you’re in the automotive repair and replacement (AGRR) industry there are a three well known associations that serve the common interest or interests of their members.  There are associations such as AGRSS® (soon to become the Auto Glass Safety Council), the Independent Glass Association, and the National Windshield Repair Association.  You get a good sense of their main interest by their names and when you look at their web sites you’ll find:

  • The common interest for AGRSS®, which stands for the Auto Glass Replacement Safety Standard, “is a not-for-profit organization dedicated to the safe replacement of auto glass. AGRSS® was founded and is supported by companies in the auto glass replacement industry that keep safe installation as their primary goal.” 1 2
  • The Independent Glass Association and its members common interest is “the only association dedicated to the needs of the independent glass companies in North America. Its members are also dedicated to the professional and ethical installation of glass in a safe and proper manner. IGA members are located in all 50 states and ten countries.”1
  • For National Windshield Repair Association members the common interest they share is that they are “recognized nationally and worldwide as a professional source of reliable information on the windshield repair industry.  NWRA membership puts you on the leading edge of timely information and gives you a strong influence in the industry. Your membership not only couples you with the dynamic leaders of the windshield repair industry, but with a voice in your destiny equal to any other member.”1

1)     I have had the honor of being a member of this association.

2)     I am a member of the board of directors and vice-president of AGRSS®.

Each of these three associations has memberships which are strongly aligned to common interests.  When you visit their individual websites, each association clearly states their goals in representing the interests of their membership.  By joining any association members are making a conscious effort to align themselves with other like-minded individuals and companies who share common interests or who share similar goals (values, principals, interests or beliefs).  If you surround yourself with people who have a common interest, then you and the group as a whole should be able to achieve more of those shared goals and the association will further improve or execute on the shared common interest as well.  Associations need to constantly increase membership and grow their sphere of influence in order to build on their success at gaining notice of their common interest or they will fade away along with their shared goals.  If you’re going to join an association, actively participate and you’ll be able to help achieve that common interest.  Passion, along with values and principals are key fundamentals of all associations.

If you find that you no longer share a common interest in the association you belong you can leave and then find and join one that does.

Just sayin’……….

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Factotum: A Day in the Life of an AGRR Owner

When you own or operate an auto glass repair and replacement (AGRR) business, you find yourself wearing a lot of hats.  I know that was the case when I was operating a small business in Florida back in the late 70’s and 80’s. I worked hard to make it successful, and luckily I had the help of a lot of great people.  If you work in a small to mid-sized shop, there are a number of tasks to handle after the phone rings:

  1. Answer customer questions
  2. Offer quotes and (hopefully) take orders
  3. Input customer data into the point-of-sale program
  4. Participate in one of those never ending conference calls with TPA’s (Third Party Administrators) and get all of the required approvals (and probably put other customers on hold in the meantime)
  5. Contact your supplier for required parts via phone or online order
  6. Coordinate and schedule an appointment for the installation of the glass
  7. Invoice the person paying for the replacement
  8. Make collection calls for slow payers

And these are only some of the things that you have to do to properly take care of a customer.  Just think of all the different tasks that you do every day to run your business.

Then there’s the challenge of figuring out how to make the phone ring vianewspaper and Yellow Pages ads, internet advertising, social networking sites, and face-to-face sales calls to potential customers who you hope will send you referrals. There are countless other sales and marketing tactics that you can use to help customers to find your business, and you have to spend a lot of the time and money to make that happen.

Then there is the time that you spend managing the people who work for you, scheduling jobs, ordering parts, making sure that you’ve got the right materials to do a proper installation, and maintaining a clean and safe shop. You have to purchase trucks for mobile installations, and buy all of the different types of insurance for your business to operate. You have to keep records for your business, pay bills, hopefully pay yourself, and of course account for and pay taxes to the federal, state and sometimes local governments.  When you start to write down the list of things that you do, the tasks are endless.  The various skills that you need to be successful are truly impressive.

If you’re lucky enough to have a larger scale business, then you must find a number of dedicated people with similar skills who can help you to run the business as it continues to grow.  It’s an exciting and somewhat daunting task, isn’t it?

Merriam-Webster Dictionary defines FACTOTUM as, “a person having many diverse activities or responsibilities.”  The origin of FACTOTUM is Latin and the word literally means to “do everything.”  When you own a small business you have to wear a lot of hats.  You need a lot of knowledge about everything in your business.  There are many resources in our industry that can help you to run your business.  For example, there are a number of AGRR associations that can provide helpful inside information about our trade – the Independent Glass Association, the National Glass Association, NWRA and AGRSS® to name a few.

Running a business is hard to do.  Wearing all of those hats keeps you very busy and you’ve got to truly master countless parts of your business to keep a step ahead of suppliers, TPA’s, insurance companies, competitors and many others who often make running your business even more challenging.  It’s tiring to constantly focus on controlling costs. It takes a lot of work to find the right recipe for success that ensures that your business is profitable and viable.

But in the face of all of this, it’s worth the effort. Just know that you are indeed a FACTOTUM, so hold your head up high.


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