Posts Tagged weather

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 – A Lesson in Perseverance

(Autographed Pin Flag from Ernie Els last major win in 2002 at The Open Championship held in Scotland)

Perseverance is a key trait to achieving success in any undertaking. It doesn’t matter if it’s a personal one or one that you have in your business life. It doesn’t matter whether the undertaking is a big or small one. The ability to maintain an unrelenting focus on any goal that you are pursuing requires you to work through the difficulties and obstacles that confront you.

This past Sunday you saw that trait in the 2012 Champion Golfer of the Year – Ernie Els – by his winning The Open Championship that was played this past week at Royal Lytham & St Annes Golf Club in Lancanshire, England. The Open is the 3rd of the four majors (The Masters, The U.S. Open, The Open Championship, and The PGA Championship) which are held each year and where winning one of them defines a PGA Tour player’s career.

Sunday’s final round was a test for the 83 tour players who had made the cut after the end of the second round on Friday. Only Ernie and 8 other players were able to shoot under par on Sunday with Ernie carding a 2 under par. After 72 holes were played during The Open Championship this year only 18 golfers scored level par or better. Ernie was able to put pressure on Adam Scott who had started the final round in the lead at 11 under par and who led the tournament through 16 holes. Ernie made a crucial birdie putt on the final hole of his round that placed added pressure on Adam Scott who ended up bogeying the final 4 holes on Sunday and saw his goal of winning his first major championship slip away.

Ernie Els is a storied professional golfer who has certainly had great successes in his 22 year career, but at 42 years of age he hadn’t had a win on the Professional Golf Association (PGA) Tour since 2010 (the Arnold Palmer Invitational) and earlier this year he was questioning whether he would ever be able to find a way to win again, let alone win a coveted major. With all the success Ernie had achieved in his career he seemed to have lost many of the considerable natural talents, along with ones he had developed over years of practice that together made him a successful PGA Tour Pro. Over the past several years he changed a number of people he surrounded himself with who he felt could help him find the right mix of ingredients that would allow him the opportunity to win again. As he focused on 2012 he had a number of heartbreaking near misses at winning tournaments which would have allowed him to gain an invitation to The 2012 Masters Tournament, a tournament which he had played for 19 consecutive years. Having suffered that professional setback to his career Ernie continued to work on his game, despite many opining that his career was over or certainly had to degrade to a level where he would be unable to again regain the level of play he had achieved.

Ernie’s ability to utilize all of his talents to emerge as The Open Champion this year is a testament to his perseverance. After winning he thanked his wife Leizl, along with his daughter Samantha and his son Ben for all the support they give him. Ernie also thanked a number of others who stood by him as he worked his way through the many issues that he faced in his journey to again win. And winning a major; a feat he felt he may have never achieve again, but did with hard work, dedication and perseverance.

If you operate a business in the retail or wholesale automotive glass repair and replacement (AGRR) industry; or if your business sells products to those in the industry, 2012 has probably been a year full of difficulties and obstacles requiring you to show perseverance. As I mentioned in a recent blog titled “Hopes for the New Year (Summer Update)”, the key drivers – the weather, the economy and miles driven – have not been trending positively this year and have been affecting many (6 out of every 7 of you in a recent survey question I asked) in the industry. Without those key drivers being a help to many in the industry, business owners and those who lead organizations are required to find solutions which will allow them to survive the negative environment we find ourselves. How you persevere and deal with the issues your business faces today will have a long-lasting effect on your business and for all the people who work for you. The various steps that you’re taking now will unquestionably determine whether your company will be able to take advantage of opportunities that will certainly exist in your market when the key drivers turn positive and business improves. What steps are you focusing on in your business to ensure that you’re in position to take advantage of your competition when the current environment begins to improve?

Ernie Els didn’t lose sight of what was most important for him to focus on during Sunday’s final round at The Open and that was his own game. He could only do his best, making the best decisions in ensuring that he played at the highest level he could which would allow him to post the lowest score possible and put him in a position to win. Ernie was able to accomplish that by changing his strategy on how he was going to play those final 9 holes. He knew he was lagging behind and that Adam Scott was leading by 4 strokes with just a few holes to play. Ernie decided that he would become aggressive in how he played those final holes. At age 42 he never lost hope that he could play with against the best golfers in the World and find a way to win. By utilizing skills he had accumulated over his lifetime; and with the help of those he surrounded himself and trusted most he once again found the path to success and to win and win a major.

It certainly isn’t easy to make the hard choices that business owners or business managers must make in order to be fully prepared for when business does improve, but those who just sit by and watch their market share dwindle as they hope for better days aren’t going to be in a position to take advantage of opportunities when they do appear. You have to be able to take an honest look at your business and assess the value proposition that your business brings to customers in your market, you have to evaluate the capabilities of your competitors and take all of the appropriate steps that you can to ensure that you are positioned correctly, which will allow you to take advantage when things do improve in your market.

Ask those people closest to you that you trust and respect for their opinions; solicit their honest views of the pros and cons of your abilities, of your company in the marketplace, ask them about their views of your fellow workers. Are you marketing your company properly? Are you just copying what your competitors are doing or are you trying new things to improve how your business operates? You can’t just sit back and hope for the key drivers to improve because they might not improve fast enough, you certainly can’t just sit back hoping that a competitor or two in your market will falter or that something else will somehow happen to improve your business prospects. You have to focus on what can you do to improve your business; without worrying what others are doing around you. What steps can you take to ensure that you’re ready when things turn positive for you in your market?

You will find that by your continually working hard to find ways to improve how you market or position your business to your customers, making sure that you have the right mix of talented people to work with you in your business and then ensuring that your business is operating as a “low cost” provider in your market that you will be prepared to find new success and to win in your marketplace when the key drivers begin to improve. Work through difficulties and obstacles that you face so that you can persevere.

Admittedly, sometimes even by working hard and being dedicated to your business things may not work out for you, but you can’t stop trying. Ernie Els never gave up on his goal. He believed that if he worked hard and continued to tweak his game; he’d find a way to beat his fellow competitors and win again.

So can you.

Just Sayin’……

 

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Just Sayin’ Blog – Hopes for the New Year (Summer Update)

Image courtesy of Digital Cosmonaut

Is your glass half empty or half full in 2012? It depends upon your point of view.

Last January I wrote a blog titled ‘Hopes for the New Year’ and in March I updated the blog with how events were influencing that blog posting. In the original blog I offered the hope that 2012:

“turns out to be a great year for those in the automotive glass repair and replacement (AGRR) industry (or if great is too high a bar to set at the very least better than 2011)”.

I’ve talked to a number of people across the country and, by virtually every measurement, the first two quarters of 2012 certainly have not been seen as very favorable to the AGRR industry, especially when compared to 2011. So far this year it has been a bust for the vast majority for most in the industry.

There are a few exceptions of course. With one of the warmest winters on record, 2012 has started out with little help from one of the three key driver’s effects the AGRR industry – weather. During the second quarter a few markets have had some favorable bad weather. If you happen to have a store(s) in markets that have had hail storms this year such as the greater Dallas metropolitan area that was battered by big storms earlier this month business has probably been GREAT. The storms in Dallas could cost insurers up to $ 2 billion in automotive body and glass damage as suggested by the Southwestern Insurance Information Service and reported by www.propertycasualty360.com. Those hail storms in Dallas, along with large storms in the greater Saint Louis, Louisville, Denver and Indianapolis metropolitan areas, as well as those in a few other marketplaces scattered across the United States have certainly provided a welcome benefit for some in the industry.

The second key driver for the AGRR industry is the economy and by most reports that’s not working to our advantage either. A number of United States economic metrics as reported by CNNMoney shows that:

  1. consumer confidence is at a five month low
  2. home prices are at the lowest level since 2002
  3. the annual Gross Domestic Product in the first quarter of 2012 is down versus the fourth quarter of 2011
  4. in May the U.S. manufacturing growth has slowed, the May jobs report shows that hiring has slowed and unemployment rose for the month
  5. after taking out the lowering cost of gasoline, retail sales grew by 0.1% overall in May and
  6. inflation was down .3% in May, but after taking out the impact of gasoline and food inflation was up .2% for the month trending at an annual rate of 2.3% year-on-year.

None of these economic metrics provide very much good news for how the rest of 2012 will fare.

Additionally, as reported by Bloomberg.com the Federal Reserve Chairman Ben S. Bernanke announced last Wednesday that if the job outlook didn’t improve in the near term that the Federal Reserve would move to further stimulate the U.S. economy and then last Thursday the U.S. Labor department announced that unemployment claims were trending up over the past four weeks versus falling during last fall and winter. The nonpartisan Congressional Budget Office reports that the United States could slide back into a recession based on economic performance. The Federal Reserve Bank of Philadelphia announced last Thursday that “manufacturing conditions, the diffusion index of current activity, fell from a reading of -5.8% in May to -16.6% (in June), its second consecutive negative reading”. None of these reports point to an overabundance of positivity looking forward for the U.S. economy.

The U.S. isn’t alone in the world as the difficulties that we face on the economic front pale to the issues faced in Europe and if they don’t resolve their problems they could ultimately affect our economy. The European powerhouse Germany reported that manufacturing output was at its lowest level in three years, certainly not a good sign for the rest of Europe and anyone in the AGRR industry that compete in the European markets (i.e. Belron). And to add to the economic woes of the world, in June China hit a seven month low in manufacturing activity as reported by HSBC Group.

One key driver – miles driven – has been showing improvement. Earlier this year the price of gasoline was predicted to hit $ 5 per gallon with the rising price of oil, but with oil prices continuing to drop due to the poor world economy the national average price of a gallon of regular gasoline on June 18, 2012 was $ 3.533 as reported by the U.S. Energy Information Administration (AAA Daily Fuel Gauge Reports shows the national average price of a gallon of regular gasoline at $ 3.411), consumers have been given welcome relieve. There was more good news for continued increases in miles driven as reported in an article titled ‘Gas prices could hit $ 3 a gallon by autumn’ that was published last Friday in USAToday. In a blog post in mid-March I included the picture below left of a sign at a service station at the corner of LaSalle and Ontario in downtown Chicago, Illinois. The picture below right was taken yesterday at the same station and as you can see the price is well above the nation average.

March 19, 2012                                                                                                                   June 25, 2012

The U.S. Department of Transportation – Federal Highway Administration had reported that the cumulative miles driven year-on-year through March 2012 are up 1.4% or 9.7 billion more miles driven. The graph below shows how miles driven historically have grown since 1987 until the downward trend that started in early 2006.

Increased miles driven obviously turn into more opportunities for auto glass to be repaired or replaced, but only if the “do nothings” actually do something. Sadly, figures on miles driven out yesterday for April 2012 versus April 2011 point to a reversal in the trend that we had been seeing in miles driven with the month of April being down .4% year-on-year. Not a good sign.

While taking with someone in the industry recently I suggested that you could add another key driver that affects the AGRR industry besides weather, the economy and miles driven. That fourth driver would be Safelite Auto Glass. With Safelite’s capture of the second largest insurer earlier this year, the majority of the U.S. AGRR retailers found a dramatic fall-off in repair and replacement opportunities for Allstate Insurance Company insured’s.

Safelite’s continued dominance in AGRR markets across the country and its constant advertising campaigns that are seen and heard via its television and radio commercials is proof that Safelite is working hard to continue to grow market share. Many AGRR retailers have been curtailing their own sales and marketing spend because of the slowdown in repairs and replacements. You can be sure that Safelite’s non-stop advertising during this slowdown will certainly pay big dividends when economic conditions do begin improve in the future.

I left Safelite in late 1989 and my boss at the time used to talk a lot about “the pendulum swing”. He was referring to a business adage – when sales are good the sales departments of a company rules and has the most influence so the pendulum swings to their side, but if sales are bad the accountants rule and the influence of sales departments wane. I’m not sure how that adage is playing out at Safelite today with my former boss at the helm of the company, but I’m pretty sure that accountants are certainly influencing the decisions being made in many companies today and that’s not good for the people who work at those companies or for the long-term success of those companies.

How’s business where you work? Are you seeing sales improving or are sales falling behind? How are sales affecting you?

In a previous post I wrote:

People are the ultimate key driver to any successful business. Companies that don’t recognize the incredible value that attracting and then keeping the most talented people undoubtedly will suffer when weather, the economy and miles driven have a negative impact on the business. Recognizing that employees are the key driver that helps every organization find ways to innovate, increase customer service levels and create value for all stakeholders will allow it to flourish and remain competitive in the marketplace.”

With all that’s happening and effecting in our industry today, “Be Smart in 2012” and take special care of the ultimate key driver in your business – your people……

Just sayin’……….

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Just Sayin’ Blog – It’s all a matter of perspective isn’t it?

Television station WAVE Channel 3 in Louisville, Kentucky, aired an investigative “Troubleshooter” news segment titled “Windshield fraud growing, costing drivers money” two weeks ago. The station reported on the sales tactics one company uses in the Louisville market (and other markets in the United States) to find customers who may be in need of auto glass replacements.

 In the segment, WAVE “troubleshooter” reporter Eric Flack spoke with a former auto glass technician from the company. The auto glass technician evidently had contacted the station with a number of accusations relating to his former employer. The story included interviews with a fraud investigator from Arizona, the director of the Kentucky Insurance Fraud Investigation Division and a gentleman that WAVE reported was a sales representative for the company that was the focus of the investigative report.

As someone who has spent the majority of my life in the auto glass repair and replacement (AGRR) industry, the investigative report WAVE Channel 13 news aired made me feel a bit uncomfortable. Perhaps it did for you as well.

There are countless sales and marketing tactics that companies, large or small, use to market AGRR services to influence the decision maker(s) for the key customer groups – whether they are insurance, commercial or cash customers. The barriers that exist today for a small company attempting to access customers have never been higher. Many small companies find themselves in a position where it is very difficult, if not impossible, for them to compete for one or more of the key customer groups due to the changes that have taken place in how customers seek replacements or how insurance company glass losses are managed. Many companies are using more aggressive tactics to attract customers so that they can survive in the marketplace. I’m not suggesting that all of these various tactics are either right or wrong. You may hear the term “windshield bully’s” used to describe some of these tactics.

It shouldn’t come as a surprise that an AGRR company would attempt any number of tactics to attract customers, especially when facing possible extinction. The weather, the economy and miles driven have been negatively influencing the market over the past several years. Everyone competing in the AGRR industry is scrambling to find the right recipe for survival in their market(s). I think that a fourth key market driver could be added into the equation and that additional driver is the dominant AGRR retailer, who also happens to be a leading insurance claims administrator, wholesaler and distributor as well.

The dominant retailer uses a number of its own sales and marketing tactics to ensure its position in the marketplace. Perhaps the key tactic is the ability for it to spend millions and millions of dollars on national television and radio advertising to attract current customers to its platform. This tactic also provides the opportunity for the dominant retailer to influence long-term customer choice as well. The attempt to influence customer choice long-term is very costly and not easy to achieve in the large diverse United States market, but it is a tactic that the retailer’s owner has used with great success across the globe.

Many in the industry view other tactics the largest retailer uses as being aggressive. One tactic competitors complain about is the attempt to steer an insurance customer that must file an auto glass loss claim through the retailers claims administration business to its own retail division; even though the customer has requested that another retailer do the work for them. How many of you have experienced that tactic when you are required to call the largest retailer’s claim administration division to file a claim with your customer on the line? I have heard many a customer service representative say to the retailer claims administrator while on a 3-way conference call with their customer on the line:

“You do know that I’m still on the line right?”

or

“I’m still on the call and you’re talking to my customer trying to take the job away.”

Has that happened to you and/or to your customers when they want to use your service for their glass needs? Is it possible that the largest retailer is the true “windshield bully”?

 

Whether you’re with the company that was highlighted by WAVE Channel 3 in Louisville or you’re the dominant retailer in the United States; many in the AGRR industry find some tactics cross the line of reasonableness, may go against the rules insurers have set for doing work for their insured’s or in some cases tactics may be against the law, but in the current environment companies may try things that they would have never have considered just a few years ago in order to survive.

It’s all a matter of perspective isn’t it? When looking through the eyes of two different competitors, one company sees the other company as being too aggressive or maybe a “windshield bully”, while the other is just doing what they believe they need to do just to survive when faced with the tactics used by others in the marketplace.

Just sayin’……..

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Just Sayin’ Blog – Hopes for the New Year

I’m hoping that 2012 turns out to be a great year for those in the automotive glass repair and replacement (AGRR) industry or if great is too high a bar to set at the very least better than 2011. In my opinion there are few key things that need to happen (and perhaps more than a few) for 2012 to be a great year. I’ve listed some of my hopes for 2012. Perhaps some are on your list as well.

  1.  Our industry is affected by three key business drivers:  weather, the economy and miles driven. Sadly we have no control or influence over any of these so I’m hoping for some luck for 2012.

Weather – I’m hoping to see “good” weather this year. I think you know what the definition of “good” means. For the most part 2011 was a “good” weather year.

In many markets, the AGRR industry and all those affected by it rises or falls depending upon the severity of the winter season which means snow. A severe winter brings increased breakage while a mild winter has the opposite effect. Annual demand obviously can vary considerably based on those weather fluctuations. I have many friends that compete in the snow-belt and at this time of the year they are looking at weather reports day-in and day-out to see when and where that next big snow will be. That snow, of course, has to come in the right amount and at the right time of day for maximum effect and that would be during rush hour. It would be great to see snow come in every other week so that after that big snow there would be sunny weather that follows allowing all those new repairs and replacements to be completed.  If there is no snow, owners/managers are forced to make tough decisions they’d prefer not to make relating to cutting expenses, so please let it snow. Snow brings out plows and salt trucks. If the area you live in still uses gravel or coal or sand, even better. 

Then there is ice. Ice can be even better than snow for the AGRR industry. Then there are cold snaps that can cause star breaks to run out when drivers go out and clean frost off windshields on cold mornings with scrapers or   even better – hot water. And when drivers turn on the defrosters to get rid of frost and warm air hits cold windshields. 

Hail is nice too. Of course not too small that won’t break the glass, but not too big either.  Just the right size will do. Rain isn’t ever really that good for our industry, but if it does rain please let it rain at night.

The Economy – My hope for 2012 is that in the United States and everywhere else in the world the economy becomes robust.  Since 2007 -2008 the economy in the United States obviously has not been robust.  During economic downturns many who experience auto glass breakage – the “do nothings” – delay repairs and/or replacements.  Everyone in the industry hopes that as the economy improves those “do nothings” will replace that broken auto glass.

A fully-employed workforce in the United States would be great. My hope for a robust economy includes the wish that everyone has a great job and that its a great paying one. All those fully employed people should have a car too — actually several cars would be even better. It would be great if all those cars would be fully insured with a zero dollar comprehensive insurance deductible. And, since these are my hopes for 2012, I hope that all those cars are fully insured with an insurance company that doesn’t use Safelite® Solutions as its auto claims administrator (I’m guessing most of you’d agree with me on that one). I hope everyone is going on vacations this year and preferably driving to all the beautiful places there are to visit and see in our great country.

A bad economy requires those competing in the AGRR industry to take an introspective look at their businesses.  That introspective look should include “SWOT” – your strengths and weaknesses versus the opportunities and threats you face. How you deal with SWOT generally determines how successful you’ll be.

Miles Driven – Miles driven are key to auto glass breakage and my hope is that for 2012 gasoline prices remain “low” which will equate to more miles driven by putting more people in their cars and on the road providing more opportunities for drivers to break auto glass.

The total monthly vehicle miles driven have been growing since the federal government started tracking the data. In September 2011 the Department of Transportation’s Federal Highway Commission released an in-depth Traffic Trend Report. If you follow this link to a graph on miles driven, after hitting a moving 12-month high of 3.039 billion, yes billion miles driven in the rolling 12-months ending in November 2007 the graph shows a down-tick in estimated vehicle miles driven that occurred in 2008 – 2009.  Thankfully the miles driven appear to have somewhat stabilized for now.

But the cost of gasoline is a major influencer relating to total miles driven. On December 18, 2011, a Chicago Sun Times (Chicago Sun Times article) article titled “At gas pump, 2011 was the year of the big squeeze” reported on the annual cost of gasoline for the average American family in 2011. The opening line of the article stated, “It’s been 30 years since gasoline took such a big bite out of the family budget.” The article goes on to report, “the typical American household will have spent $ 4,155 filling up this year, a record.  That is 8.4 percent of what the median family takes in, the highest share since 1981.”  This wasn’t good news for AGRR retailers in 2011. 

On January 6, 2012, a Los Angeles Times (Los Angeles Times article) article titled “Gasoline prices start the year at a high – and rising” reported on how gasoline prices are starting out this year. The article states, “but this also may be the year of the gas-pocalypse, analysts warn. That’s because gasoline prices are the highest ever for the start of the year, and they’re on the rise, supercharged by expensive oil and changes in refinery operations.” That’s certainly not good news for AGRR retailers looking for 2012 to be a better year than 2011.

The AGRR industry really needs to see lower gasoline prices that will cause a spike in miles driven for its business outlook to improve in 2012. Based on predictions made by Edward Morse, head of commodities research at Citigroup Global Markets, Inc., on December 22, 2011, on Bloomberg Television’s “Surveillance Midday” that doesn’t seem likely. If you follow this link Mr. Morse talks about factors affecting the crude oil market and the outlook for oil and gasoline prices. You’ll see that he holds out little hope for “low” gas prices in 2012.  Mr. Morse sees the floor for gasoline prices to be $ 4 by the end of May 2012. That’s certainly not good news for AGRR retailers in 2012.

My hope for 2012 is that gasoline prices are low and miles driven are high. Based on the realities of the marketplace and comments from experts you’d better cross your fingers and say a prayer for that one.

  1.  I’m hoping that in 2012 some entity – some organization or company in the AGRR industry steps up and becomes a leader for the industry. By the way, I’m certainly not suggesting that the “market leader” can assume that role.  I don’t think that’s possible. I am hoping that leadership is shown by someone who really cares about the AGRR industry and the issues that it faces, offering positive ideas for all to improve the valuable services that the industry provides to consumers.
  1. I hope to see fewer imports of auto glass manufactured overseas coming to the United States/North America and the imports that do come to our shores at least be from those companies that are major suppliers of Original Equipment Manufactured auto glass to car manufacturers and not those who primarily make after-market parts.
  1. I hope that every windshield that needs replacing in 2012 is replaced using the Auto Glass Safety Council’s auto glass replacement standard known as the AGRSS® Standard.  The standard is accredited by the American National Standards Institute (ANSI) standards development organization.  The AGRSS® Standard (ANSI/AGRSS® 002-2002 Automotive Glass Replacement Standard) is North America’s only auto glass replacement standard and it addresses the proper procedures that must be used by auto glass technicians, along with other company employees who are also important to ensure the safe installation of auto glass.  No other company or organization maintains any standard remotely similar to AGRSS®.  I also hope that replacements are completed using a urethane that provides a 1 hour safe drive away time.  Your customers deserve nothing less.
  1. My final hope is that someone steps up and attempts to compete on a larger scale against the market leader. The industry really needs a strong competitor to Safelite®.  I really don’t care who that is, but come on already.  Somebody step up on the retail or third party administrator side and give them a go.

I hope everyone who competes in the AGRR industry the best of success and luck in 2012.

And finally I’m hoping for a great 2012 for myself.

Just sayin’……..

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