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Archive for the ‘Uncategorized’ Category

Defining Craftmanship

31 Jan

One of the aspects of the American dream is that, in many cases, you can strive to be anything that you want to be. No doubt that a potential vocation may be derailed simply through intellectual or economic disqualification, but generally there is no legal or social barriers that exist to bar anyone from being something they want to be. There is no easier place to see proof of that concept take hold than it is to park outside a auto glass wholesaler and watch commerce take place.

One of the most obvious weaknesses of our trade is the easy entry nature that exists from within. It is a very regretful fact that anyone, and I mean anyone, can call himself a professional auto glass installer. The cultural axiom that a windshield leaks oftentimes after replacement has become such because there are far too many incompetent or amateurish people who profess to be auto glass technicians. Until that glaring and gaping loophole is closed, there is truly little that can be done to raise the public’s trust in our profession.

Independents need to realize that corporate glass uses their brief internal training as an additional sales point when they sign up an insurer or fleet as a client. Not only may they offer nationwide service, a company can point to their in-house instruction program and sell that as proof of technical competency. When compared to the great unwashed masses that exist elsewhere, it becomes a useful argument to close the sale or to maintain an account.

Look at the TV ads that have graced our channels. We see a neat and polite technician driving a logoed company vehicle. It is certainly not the confidence-draining 25-year-old mini pick-up that looked like it was the loser at a Destruction Derby that I see picking up glass at my neighborhood distributor every day. The fact should not be lost on any knowledgeable person that both could have shared the same employer or even the same trainer at any given time.

That amateurish image is something that needs to change, but we have far too many institutions that promote (and, in fact, encourage) cheap installs. Body shops, car dealerships and fleet managers regularly choose glass companies based on pricing rather than competency. Craigslist and other Internet sources allow all sorts of glass services to flourish since the general public has little idea what constitutes a good installation. We don’t even have to mention the bean counting, third-party-administrator-hiring insurers who view glass claims as an assault on their companies’ bottom lines.

The question I would love to have an answer for is this: Did the Chinese flood of cheap glass start the decline of profitability and craftsmanship in the auto glass industry, or did it just add momentum to it? The second question is this: Can we as an industry recover respect as a craft? As it stands, that goal makes putting a genie back into a bottle sound like an easy task.

First of all, just giving lip service to bad installations has to stop. Accountability has to begin somehow, whether by VIN data bases like Carfax or by some recognized and easily accessible method. Corrosion is not a natural byproduct of an installation and a customer should not have to bear the expense of that condition. Tracing an inferior replacement back and making that shop and/or person who performed that shop legally and economically responsible might go a long way in curbing some of the worst abuses. That would mean every glass would have to carry an additional numerical code to make installer identification possible to trace.The cost for such a system should not add more than a dollar to the wholesale price of a lite—a small price to pay either to assess or avoid liability issues for shop owners.

I would love to see some tough state certifiable standards for auto glass technicians written and then enforced. InCalifornia, someone who cuts or colors hair needs to prove proficiency while anyone who ponies up $200 can buy a legally required Bureau of Automotive Repair license without proving any technical ability. It seems a pretty sad of affairs when a head of hair can grow back after a bad cut but no hair would be able to grow if a windshield client did not survive a vehicle ejection if the glass adhesion failed during an accident

How much responsibility goes to a company or to the technician for an installation? If a tech is not given enough time or quality parts to do a job properly, can blame be levied on him justly? If one has a lazy or greedy installer who cuts corners on mobiles, why does an owner bear the larger liability? These are difficult questions to answer just due to the large variability that exists. Large companies tend to think in metrics using numbers alone to assess productivity and production. Smaller businesses only tend to think in terms of a day’s or week’s gross profit. In both cases, if the intent is to squeeze out the greatest amount of profit over the interest of the customer, bad outcomes will occur.

Earlier this month, I walked out into a parking lot and spotted a woman inside an Acura TL (FW2106). The top three sides of the glass had copious amounts of blue tape attached. I mentioned to her that I was in the auto glass business and asked her what she paid for her new windshield. She proudly announced that it cost her very, very little, as if she had won the lottery or had found the deal of the century. My reply was that she better keep the name of the company handy just in case she had any issues. No doubt that the moulding had been “filleted” to save both parties money and I can only wonder what other atrocities were committed. Was a SDAT even observed? In my area, there are a few low-price shops attached to wrecking yards that customers routinely drive away immediately after installation (with blue tape attached). Last week, I replaced a FW0660 that had broken, not due to a stone break or an outside force. It had shattered because it was so loose due to adhesion failure, and it had hit the interior wall next to the pinchweld.

Sadly, there is little the industry as a whole can do to tighten standards, even if it truly had the will to do so, which it seems not to have at the moment. The AGRSS® Standard certainly is a start but until the American public actually cares enough to educate themselves on the aspects of what constitutes a good installation or stop assuming that proficiency exists anywhere a glass shingle hangs, little can be accomplished to improve overall quality of service. If we fail as an industry to restore confidence in the nature of our very existence, what will that mean for our future?

 
 

Playing Games

26 Jan

For generations, the board game “Monopoly” has provided entertainment for millions. The original concept was to educate players on the value of acquisition. Today, anyone who is in auto glass has a front-row seat in a real-life display on how a monopoly can form, how it operates and perhaps endeavors to avoid being charged with violating anti-trust laws.

Let’s first define the term “monopoly.” Several dictionaries do so by saying this: “an exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.” If this were a quiz among those knowledgeable of the auto glass business, I don’t believe my company, Auto Glass Menders, would be the first company that would come to mind that has a monopoly with anything connected to auto glass. (except stubbornness, perhaps). There already is a feeling among many independents that those conditions already exist within the insurance sector. The question becomes this: what, if anything, can be done to alter or reverse that situation?

A mysterious letter was sent out to various individuals in the industry around the first of the year commenting on the Allstate move from LYNX. The letter delineated a concern that the consolidation of retail glass and third-party administration (TPA) services to a single international corporation raises anti-trust issues. One point the letter made is that massive size is not a barometer for regulatory redress, but anti-competitive behavior toward independents would be. What the letter is appearing to say is that the structure and financial relationship of Safelite Solutions as a TPA should be tested under the “essential facility” doctrine within anti-trust law. If a TPA is determined to be “essential,” it will need to treat independent shops on an equal and non-discriminatory basis with its captive affiliated shops. That doctrine, if or when found applicable, would impose liability when a firm denies a second firm reasonable access to a product or service that the firm needs in order to compete with the first. Can anyone say steering?

I wonder what Belron’s installation/repair penetration percentage is among the insurers it represents. That would be an interest to many of us, along with perhaps an indolent regulatory agency as well. In the Monopoly board game, Belron’s position is similar to not only owning hotels on the bulk of the properties, but it also is the banker who then takes a percentage of a player’s $200 allotment as he passes “go,” as well as requiring authorization to do so.

That brings up a point raised by some in both the insurance and auto glass world. Once Belron disposes of or at least neutralizes its largest competitors, what will become of Guaranteed Average Invoice (GAI) pricing? Insurers have certainly aided Belron’s march to the top not only here in the United States, but elsewhere in world markets. It is one of the most obvious parts of the company’s business model. There are those in the insurance world that have voiced concern that as national or even regional chains retrench, dissolve or are even acquired by Belron, insurers themselves become far more vulnerable to the market power that is being attained by their pet TPA’s corporate owners. That’s sort of like having every Chance or Community Chest card start with the phrase “Pay Belron …”

One of the all-time obnoxious public relations spins is to hear an insurance or TPA lobbyist use the terms “consumer choice” or “consumer protection” in defending the script content when a claimant makes contact with a person erroneously believed to be a direct employee of the person’s insurer. No doubt if they were playing the board game, these CSRs and upper management would do everything to buy the B&O, the Reading and the other two train companies because they have every intention of railroading the claimant into using their captive services throughout the process.

Also acknowledging the political lobbying power of the insurance industry, you can foresee that sector being employed in defense of its glass claims contracting methods. You could sort of call that the “get out of jail free” card for Safelite Solutions unless it commits very real or egregious misdeeds.

As for those who have been bemoaning the loss of Allstate referrals; some of those companies who bid extremely low in their offer-and-acceptance contracts to become “preferred vendors” are now learning their is no “free parking” in real life. Also, if people thought that there would be little change in their businesses with the change of TPAs for Allstate, they probably would accept monopoly money in exchange for their services. Get your head out of the sand!

If you notice, there is no government regulatory agency in the Monopoly game. If a person acquires enough properties to bankrupt the rest of the players, he wins. There is no limit to how much they can own or money a player can accrue. In fact, there are no rules on business practices either. Same seems to be true in our real world as well.

What should an independent do these days? Work smart! Build your business around quality. Charge accordingly. If you base your future success on small volume margins, your chances for failure increase dramatically. I know this much; if I were playing the game, I would want to own Boardwalk and Park Place rather than Baltic Ave. The same applies to any business.

 
 

My New TPA

17 Jan

I apologize for not writing a blog the past few weeks but I have a good excuse. I have been strongly considering a career change. I feel after putting more than 30 years in the auto glass business, I want to give back to the industry. I think I can achieve that goal best by providing what independents need the most … yes… you guessed it … a new third-party glass claims administrator.

Why not? I can take most of what I learned in kindergarten and then deduct my life experience from that and satisfy a need that we in the industry know sorely needs to be filled.

You may ask—how can you as a sole proprietor actually think you can succeed at this venture? Folks, it is as easy as setting an DW847 without sealant or a Ridgeline without removing the cowl. You just do it.

After all, what is the basis of the free enterprise system? We see it every day in our industry … by underbidding and overselling our services. After all, what insurance company would not resist paying a lower guaranteed average invoice (GAI)? I truly believe you can go a long way in making a glass claim “revenue neutral.”

First of all, I would apply the most basic principle of auto glass economics: Bid cheap. Find out your competitor’s GAI and undercut by at least 25 percent. Get more serious attention by halving their price. To further sweeten the pot, one could pay x amount of dollars back to the insurer per penetration point achieved in the marketplace. No one really needs to know the details. That is what is known as trade secrets.

To offset some of these giveaways, I will have to cut expenses. One thought is to employ offshore call centers to act as the contact when an insured needs to file a glass claim. Most people don’t understand their policy coverage, so why should they need to understand the CSR they speak to? It would seem to me much easier to use the “Tower of Babel” effect in directing claimants to my TPA’s preferred vendors. Also I would not need to pay any benefits.

Did I use the term “preferred vendor?” Should I change that to “approved?” After all, any TPA would want to instill into the claimant’s mind that the company that shows up to perform an install had to go through a rigorous approval process to gain that hallowed status. Those people would be quite correct. Every merchant who conducts business with my TPA would have to supply us with letters of certification of professionalism along with the percentages of discounts that they will give to us. We will make our associate selections based solely on merit. Those giving us the deepest discounts or kickbacks will merit our attention the most.

Paying for OE glass will not be a problem. It is my belief that too many insurers feel that they are being duped by false claims from independent shops. I have an idea that may find acceptance among my client corporations. Instead of providing proofs of purchases (POPs), shops would only need to send the bug from the newly installed windshield in with their invoice, along with a digital photo documenting the removed etching. If Allstate decides to switch TPAs, they would most likely demand a 10 percent increase in surface area removed, which would be acceptable to me.

I also have a few technological breakthroughs up my sleeve that may just entice more than a few insurers to jump on board. While one insurer is promoting the use of a voluntary tattle-tale data collector, my idea would be more pro-active. This new TPA would not pay for any urethane that was non-conductive and provide to its installation vendors a proprietary mixture of Mountain Dew, antiperspirant and glass cleaner. Once applied to the aftermarket glass, it would have the effect of blocking any electronic signals from entering the vehicle making talk or texting impossible from cell phones.

Take the mantra, “Who is the customer?” As a TPA, my sole responsibility is to my client insurance companies and not to the demands of some needy and greedy client of theirs. After all, does it take a Einstein to figure out what side of the bread the butter goes on? Free enterprise is not free, especially when it comes to either insurance or auto glass, and consumers have confused cheap with value from the dawn of time. Fair and reasonable (like beauty, as we all know) is in the eye of the beholder and I want a number of insurers and independents beholding to me for pricing and claimant management.

How many insurers can I sign up? Time will tell. I know this much, if I can bag most of them, I wonder if the Federal Trade Commission would care or even notice. After all, unlike my competition, I would not have any ownership or financial interest in wholesale or retail glass sales. I would, however, expect my national or international golfing excursions to be covered by grateful parties. I suppose those trips will be documented via surveillance videos by jealous competitors, which only would put pressure on my scoring well at Pebble Beach or St. Andrews in Scotland. That’s only fair and reasonable to me. I would like to have them as home movies.

Let’s face it, owning a TPA is the best thing since sliced bread or free adult movies via the Internet. It is a license to print money and then to keep it. Claimants are anxious not to offend their insurance companies so they are amenable to almost every suggestion one gives them. After all, what does the term “pre-loss condition” really mean? Should a glass company even wipe down the aftermarket windshield anyway? The old glass was probably dirty so why should the new one be clean? On the installation side, there is always someone out there who will undercut his competition so there is no lacking of short-sighted glass vendors. Many could promote themselves as being “green.” I would mandate that they would reuse (oops, I meant to say recycle) mouldings to save the landfills. Heck, I might even allow some of my past rivals on my “approved” list since it is the Christian thing to do. All they need to do is to perform a little penance (aka tithing to my favorite charity, which, of course, is me). In short, I just want to be known as a “job creator” to those in my new tax bracket.

I am almost all set to go. I have my smart phone and my laptop. What I really lack is a catchy name for this new venture. Without one, I fear my marketing campaign may fail. I had thought of “Lemming Resolutions” as a brand since I could use a cute little rodent as my corporate logo, but I fear it is just too long a title. Until I can be a bit more creative, I will put my plans on hold. That gives me time to work on my golf swing.