2007 Independents’ Days and Spring Auto Glass Show
2007 Independents’ Days and Spring Auto Glass Show
Dates: May 17-19
Location: Cashman Center, Las Vegas
Educational seminars: 13
Next stop: Independent Glass Association Fall Conference, Mandalay Bay Convention Center, Las Vegas, Nov. 2-3
A comic-book perspective
There are a lot of murky things going on in the auto glass industry inscrutable to outsiders, said Ralph Nader, consumer advocate and former presidential candidate, during his keynote address, May 18.
To educate legislators and reporters about the dynamics of the AGR business, the industry needs to create a 10-page strategy paper that describes the industry in simple terms; identifies all of the players; addresses training, certification, registration and standards; and most importantly, outlines the industry’s objectives, he said.
“Turn around and put it in a comic-book format,” Nader advised.
No need to panic
From a retail standpoint, non-traditional competitors such as collision-repair shops are clearly making an entry into the auto glass market, reported Fahmy Mechael, a representative from Lynx Services of PPG Industries, Pittsburgh, May 17. ”I don’t think there is a need for panic, but there is certainly a need for concern,” he told the group.
The collision repair industry’s interest in auto glass replacement speaks to the fact that others see opportunity in the market, Mechael continued. “These are folks who have a foothold and access to the consumer. If I were a retail shop owner, I would have to figure out what they see that I don’t and how I’m going to compete.”
Retailers need to evaluate their range of services versus the competition and understand what makes them a better choice for consumers, he advised.
Life without NAGS: Total chaos?
NAGS has received a fair amount of criticism lately, but what would happen if it ceased to exist? The result could be total chaos, said the San Diego, Calif., company’s James Patterson during a May 19 presentation “What if NAGS No Longer Existed?”.
“For every negotiation, each partner would have to determine the pricing part by part,” Patterson said. “This would probably work in the cash market, but for contract negotiations, a buyer would have to obtain price lists from each potential vendor and comparison-shop. Small vendors are likely to be shut out because large buyers cannot realistically negotiate with thousands of potential sellers without a benchmark or similar mechanism. Large buyers would have to negotiate only with large sellers. It’s the smallest shops that get hurt by this process. … We also don’t believe this situation would hold for very long. Someone would come along with another benchmark to fill the void.”
That someone could be a for-profit industry participant, Patterson pointed out. “This is considered the most likely scenario,” he told the group. In the absence of a neutral third party, industry participants with a stake in the outcome would likely publish at least one or more price lists, he said. Strong buyers would adopt the most attractive price list.
“If the publisher has a stake in the outcome, the motivation would be to manipulate [specific prices] where the publisher has a competitive advantage or disadvantage,” he explained. “A non-neutral party would not be reporting the news but their price, and would not be under any obligation to accept feedback from industry participants. You could potentially be contacting a competitor. There is a lot of concern in the industry about having to provide your information to competitors. You could be forced to match your competitor’s pricing and use its price lists. We have already seen this happen in a different market outside of the United States where a retailer captured enough market share that it provided its own price list to the insurers, and everyone else has been forced to meet those prices. This is not a hypothetical scenario.”
Lastly, a new benchmark could arise from a committee or other nonprofit organization, Patterson said. However, “this scenario would likely gravitate to the second one.”
To read the presentation in its entirety, visit www.nags.com.
An estimated 80 percent of auto glass shops do not have a financial budget in place, said David Carnahan, president and owner of Mainstreet Computers, Belleville, Mich.
“Have a financial plan,” Carnahan told attendees at a meeting May 19. “Things are tight in this industry; it is struggling. If the competitive environment stays the way it is, you’re going to see more and more people falling off. To survive in this industry now, you’ve got to be smart. And to be smart, you’ve got to have a financial plan.”
A financial plan is only as valuable as you make it. Carnahan advised attendees follow their plan, review and measure its effectiveness, and make the necessary adjustments.
Ask Dan Wilson
Dan Wilson, CEO of Belron US, Columbus, Ohio, fielded a variety of questions from IGA attendees at a special session May 18. Following are summarized excerpts from the question and answer portion of his presentation.
Belron has stores that are open evenings and Sundays in some places. Do you see that expanding in the United States?
If you look to other aftermarket industries doing repairs, many are doing successful repairs in the evening. Having said that, the continuing shortage of labor in the marketplace will be a constraint on putting that type of a program in place nationwide. It’s not one of the items that we have on our list of things to do.
IGA members are concerned about illegal and unethical steering. Do you think steering exists? How would you define it?
We’ve spent a lot of time over the last several years going through a number of legal processes on this topic. If you look it up in Webster’s, it essentially says it’s when one is coerced or forced to do something that they don’t want to do. I don’t think that’s going on in our industry, but I do think there are things going on that create the potential for steering. We spend a lot of time on this; we record every phone call that we take in our company. A customer service representative does not go on the telephone without two-and-a-half weeks of training. We have really spent a lot of time making sure we are compliant on this subject.
If Safelite doesn’t steer, why does it fight anti-steering legislation?
Quite frankly, we support a lot of the anti-steering legislation. We like the fact that in Washington the bill that was passed gives consumers the right to choose a glass shop of their choice. (See Page 10 of the May/June 2007 issue of AutoGlass.) We already inform callers about who we are and the relationship with the insured. To say that we don’t support anti-steering legislation would not be accurate.
A number of glass shops are concerned about being put on hold for a long time. Why does Safelite put glass shops on hold for long periods of time, yet the agents can get right through?
We’re not trying to support a lack of execution. We have an average second-to-answer ratio that we measure inside our company carefully. I think overall we do a good job. I’m not saying we’re perfect all the time. I’d be happy to have our network people take a look at any individual circumstances that you may have. I can tell you the clients come in frequently, audit the results and take pains to make sure our average second-to-answer is within their guidelines.
If Safelite is a big proponent of safety, why isn’t it an AGRSS-registered company?
We’ve looked at this in the past. We are going to take another look at this later this year. We’ve been awfully busy with this merger, and it has taken us a little off course on some of these initiatives.