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Just a question about networks

I am just trying to get some feed back from different areas in the U.S. I know that from here in NY insurance companies on the network still pay more then most other accounts. So my question is, does this go on everywhere else in the country, or just NY? As far as walkins go if I give a resonable price, people are shocked that it is "so high", people around here put glass in at about $75 over cost of glass, anyone else have this problem?

Re: Just a question about networks

The point is if they are paying roughly $85 more then any other customer, they know that. They do make phone calls and get quotes from unsuspecting glass shops to see what the going price is on a glass install, thats how come they keep lowering prices, because people keep doing it for less money. If they didn't have proof that they were paying a fair and resonable price, they would'nt be able to just lower pricing. Why should a body shop that gives you maybe a thousand or two worth of work a month get much better pricing then an insurance company that give 5, 10, or 20 thousand a month in work, and pays consistanly in a timely fashion? Does anyone else in here see the point that glass shops are the ones that control pricing, not the networks, no matter how much you say it is them, it's not, its all of us. Think about next time you sitting there and its slow and you practically give the glass away just to "keep busy", if the job is worth $280.00 as an insuance job, it should be worth as much to a walkin customer, give or take a percent cause of the fact you may have to wait 20 to 30 days to get paid.

Re: Just a question about networks

In MN we have been getting paid a little better and in some cases much better, because of leaders in the agr field who have taken the fight through legislation and arbitration. Yes we see the low ballers who install for beer $$'s. The walk in's that are looking for the cheapest price,,, we let them keep walkin'!!

Re: Just a question about networks

that is my point cs, stick to your pricing. We all have seen how trying to make it up in volume just will not work, make your money on each and every job!

Re: Awesome post. Must read.

I think that times like these will weed out those kinds of business people, and the ones that understand this will still be here to reap the rewards after they are gone. Stop *****ing yourself out for cash customers, and sell your superior (I hope)product. Nobody wins in a pricing war, but the customers.

Re: Just a question about networks

A lot of companies shoot from the hip when quoting cash jobs. You could call the same shop on any given day a get a totally different price. They either don't have the time to look it up or don't care.

Re: Just a question about networks

I'd like to add a point in this discussion, as a reminder, because I'm sure it's been brought up before.

I don't care how many calls an insurer or consumer or ANYONE makes to get prices, they do NOT MATTER if they do not take into account WHAT IS BEING PRICED.

Quality of glass, quality of materials, quality of installers, and the LEVEL of the services provided FOR THE DOLLAR QUOTED.

It just won't hold water if someone gets a quote that says $100 is the price for a Windshield for a Ford Escape, when you can buy a dozen different windshields at a dozen varying costs for each. Then, the issues of mobile, distance to mobile, time it's done, other services provided, ect ect ect.....ALL MUST BE ACCOUNTED FOR TO COMPARE THE PRICES.

It just amazes me no end when networks say "Either you are installing a NAGS PART or a DEALER PART, which is it? They just don't GET IT when I repeatedly tell them that NAGS DOES NOT MAKE PARTS, IT'S ONLY A NUMBERING SYSTEM. That, and the facts that there are so many Net Priced parts, and so many discrepancies between OEM prices and NAGS prices just proves to me that NAGS is nothing more than an AFTERMARKET part pricing database.

BTW...if NAGS really does account for broken glass cleanup in their labor times on tempered parts, I INVITE them to come demonstrate it to me. If a person pulls all interior panels and trim that glass gets behind to be sure that the broken glass does not chaff wiring harnesses in the future....for the time they say is way.

OK, enough preaching, finished my cheese sandwich and cookies.....back to work. lol

Re: Just a question about networks

excellent points Mark1

But do you really think the TPA's are that uninformed? Or are they simply "playing stupid" so they do not have to acknowledge the very points you made?

Re: Just a question about networks

interesting points indeed

Re: Just a question about networks

Some random points regarding this thread:

1) The correlation between a body shop and an insurance company is not valid. With a body shop, you essentially bid for a predictible piece of work from one customer. The work is done in one place, with pre-negotiated terms regarding service and product.

2) An insurance company IS NOT a customer. They are a payor. The process of turning an insurance company into a CUSTOMER is very expensive. It requires field staff, intense marketing, and dedicated processes. This is "in addition" to whatever marketing a shop already does. There are zero volume guarantees and more hoops to jump through to get paid than any other type of payor. Especially when you insert a TPA into the mix: who, btw also considers themself a customer.

3) Insurance work is higher service intensive than any other type. It generally gets pushed up to the front of the schedule, often involves "above and beyond" levels of service and takes at least 30 days to get paid, on average, IF there are no issues with any of the information collected or rates charged. To get this work, not only do you have to agree to terms, you also have to market to the "actual" customer as well as the insuror and TPA.

4) An agreement between a cash customer and a shop is infinitely flexible. The criteria for service, quality of material, and price of a cash job are open to negotiation and can be based on any current factor that shop chooses. The marketing for cash work is more simple, and the transaction is completed at the time of service. Cash work takes less overhead, less resources, and less effort than any other type. The market price for this work is less in most cases because the criteria is flexible. You sell price, or service, or both, any way you choose, it is up to you.

That said, the fact that insurance jobs SOMETIMES start with a higher level of profit, is bottom line justified by the extra expenses that they involve. As long as people accept the O/A and contract prices, the system, by definition, is "fair" from a pricing standpoint. When people, en-masse, say "NO", or reduce the service levels on these jobs due to a true knowlege of exactly what that job "cost" them, then the drawbacks will outweigh the advantages and we will see it move the other direction.

If TPA's and insurors guaranteed a percentage of claims to a shop, the price would go down. Thats how it works for SGC. Unfortunately, we are at the "no information" end of that transaction

If TPA's and insurors paid for work at time of service without hoops, the price would go down.

Think of it this way: If I make a single, successful, call on a large body shop, I can drag X thousand per month from that shop, until I am outbid, or outserviced. If I say the right thing on the phone to a cash customer, I can lock in X hundred cash flow for that day.

Now, if I establish a reputation, fulfill all of my contractual obligations, make umpteen calls on hundreds of agents, either give stuff away or defend why I don't, provide confidential information over the internet, agree to blanket pricing and accept the obligation of collecting copius amounts of information from the insured, and continue the marketing efforts I am already making for other types of work, I MAY get a percentage of the work a TPA or an insured has in an area. Once I get it, I MAY get paid in 30 days, IF I did everything correctly. If I have an issue with that TPA or insuror, I will have to negotiate each invoice individually. The worst of them won't be paid for months.

As it stands right now, each segment described above is worth doing for us. But if you were a "lay person" that knew nothing about the glass business, which category of business SHOULD be the highest margin in your opinion?

obviously, all of this is IMO. Sorry to ramble.

Merry Christmas, God Bless.

Re: Just a question about networks

Mark 1, first let me start by saying I would like to make more money myself on every job we do here, the point I am trying to make is, that glass shops do have control over pricing. What I did for example is, I use to buy from a wholesaler that would sell glass to anybody. So I did a little research and found that they were not only selling to anybody but selling to installers who do side jobs for the same and sometimes less then I was paying for glass. So I stopped buying from them. I am a small/midsize shop that pays my bills. After about six months or so, they are pratically begging for me to start buying from them again. Other shops in my area also followed suit, since I have a big mouth, and let the word spread on what I found out, now not many of the legit shops buy from them. They deal with the low lifes in the business, whose profit goes up their nose instead of in the bank for the slow season, so now they can't pay their glass bills, if you think you can't make a difference, just take a stand once in awhile, you will see you can make a change for the better. Don't buy from distributors who run their business like the guys working out of his van with no overhead, they will not be able to stay profitable forcing them to raise their pricing to the low lifes, foricing them to raise their prices to a level that you may be able to compete with.

Re: Re: Just a question about networks

your points are right on the money! Have a Merry Christmas and Happy Holidays.

Re: Just a question about networks


That may be the best post I've ever seen here. Very nice!

Merry Christmas to all.

Re: Re: Just a question about networks

Great Post.

Re: Just a question about networks

Snot, I couldn't agree with you more, though I'm confused as to what post you were making a point in.

The string seems to be addressing more than one issue, or did I miss something?

DL, excellent post, no matter what string it's in. I would only add to it what was in my post above, that what materials are IN the price matters also to all the parameters you outlined so well.

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