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As I sit in my hotel room this morning preparing to depart Las Vegas, I've been reflecting on the meetings, the tone, and the whole agenda at the IGA show yesterday.
Carl Tompkins made an excellent presentation for AGRSS. This was the high point of the day.
Attorney Chuck Lloyd made the excellent point that AGR shops need to market their services. Sadly, however, this message seemed to fall on deaf ears. Attendees continued to focus, spurred on by the IGA leadership, on everything outside of their own responsibility to compete based upon their ability to sell their company's services to the customer. "Access to jobs" was the mantra with the usual Safelite bashing. The fact that 80-85% of the AGRR jobs done everyday are done by companies other than Safelite doesn't seem to resonate with the IGA membership. Pointing the finger and banging the drum of the evil Safelite Empire was, once again, the order of the day. This mindset perpetuated by the IGA's agenda is what's killing the independent..."Everything that's wrong with my business is someone else's fault". "I can't survive because I need access to 100% of the jobs. 85% isn't enough". "I am entitled by virtue of the fact that I exist and do a good job".
The future success or failure of my AGR company is directly related to its ability to sell our services to the 80-85% of available customers each day...not the success or failure of a lawsuit. To base a trade association's whole existence and platform on a lawsuit is, in my opinion, like building a house on quicksand. What will be the IGA's agenda when/if this fight is lost?
The IGA membership's treatment of Chris Umble of Lynx Services' METRYX Program during the Q & A was an embarassment...and the leadership of the IGA's willingness to allow it to continue was even worse.
You may want to save this post somewhere so that you can use it again next year. You can probably use it after the NGA show as well. Both venues seem to survive on past laurels and desparation by the attendees and exhibitors. Oh, and the money the organizers make on the events.
I see your point, believe me, I do. But, you cant ignore the damage that Safelite, as the largest AGR company with a network, has done to the industry. Their AGR and manufacturing divisions, have essentially become a life support system for the network, allowing them to lower the per incident costs to the ins companies. Without steering they cannot meet thier pricing obligations, since the network model is based on their AGR model of increasing volume at the expense of pricing. The rest of us need to get organized, and it seems that painting SGC as the villain to focus on may be what is needed to get the independents to finally work together.
Take it one step further and look at the cummulative impact of Safelite, managed programs, price erosion, and a broadside by insurance companies raising deductibles above the cost of the average glass job and we are getting closer to the industry's real problems.
From a retail perspective, Safelite is in the same boat as the rest of the industry: it was less expensive to market to the controlled insurance segment than to try and hit the general consumer market. This is a huge smack to the bottom line when you have to try and influence the masses as opposed to guys like Hal or Susie at the agent's office.
LYNX' revenue stream got a little dryer when State Farm dammed up the repair tributary. They were getting paid the same transaction fee on the 600,000 or so (2 million X 30% repair ratio)repairs as the replacements. Lets call it $15 per claim and there goes $9 million a year.
No doubt, the discussions about the future of the industry goes way beyond TPA bashing.
And the other thing, when the glass industry doesn't have to worry about communicating with the insurance industry anymore (no claims, just retail customers) NAGS just doesn't matter anymore. We can learn to speak like normal businessmen again.
Was disgusted at the same event I just left? I don't think so. Perhaps disgusted wants the independents portrayed the way he said, but that's not what they are. Maybe disgusted wants insurance companies and groups like LYNX to think the independents are not courteous but they are. I learned a lot from the conference, found a good few new sources for product--it was well worth my time.
As you correctly point out, independent AGR folks need a rallying point to organize behind. That IS the point. The question then becomes are a lawsuit and TPA bashing the optimal platform/agenda choices to get AGR folks into the right mindset to grow their businesses? I think not. It turns them into victims rather than harnessing the scrappy survivor instinct so many independent AGR folks have by nature and directing that energy towards positive change.
The fact is, if Safelite went out of business tomorrow, most of the AGR shops that spend considerable time and energy bemoaning their practices, practices which I do not personally condone, would hardly feel the impact in increased sales volume.
My point is simply this: TPA's are not the big problem. They are A problem. But the hacks in your town and mine selling glass for next to nothing and doing lousy work are a much bigger problem and ever-present threat to the legitimate businessman that should be addressed by the serious folks in this industry with licensing initiatives and the like to, as the IGA says, "Sort the wheat from the chaff" and make AGR a craft once again. As it is today, AGR is simply a commodity to be purchased by the consumer at the lowest cost they can find. That's the real problem...Public perception of the value of the service we provide.
Give a man a fish he eats for a day. Teach a man to fish he eats for a lifetime.
I agree with Glasspat. Disgusted, I do not agree with your assessment.
Focus was on marketing, service, legislative change, diversification to supplimental services to broaden product offerings, individual company branding, calculating better business practices through data crunching and more. Diverse and comprehensive seminars, all focused on helping us to add MORE valued, and valuable, services to our customers, to set us apart from our competition.
Safelite bashing? I don't think so. Not unless you include all networks into the group. All that are taking first contact with the customer away from us. If that's bashing, I'm all for it. And I'm also all for putting an end to steering.
Your experience was:
"Diverse and comprehensive seminars.Focus was on marketing, service, legislative change, diversification to supplimental services to broaden product offerings, individual company branding, calculating better business practices through data crunching and more. Diverse and comprehensive seminars, all focused on helping us to add MORE valued, and valuable, services to our customers, to set us apart from our competition."?
If this had been my experience, it would have been a good show for me, too. Maybe I was on the phone when all this happened? If in fact this is what you got, then you surely got your nickle's worth and it was a good show. Maybe I need to hang out with you at the next show. I seem to have missed all the good stuff somehow. This happened on Thursday 3/2/06, right?
I dont know about your market, but in my market Safelite is the hacks that sell and install glass for less than I can buy it in some cases. There certainly are others, but Safelite takes a disproportionate share of the market. Besides Triumph, they easily take a much greater share than the rest of the cheap hackers put together.
Personally, I dont blame Safelite entirely for this industry's ills. However, when I market and capture a customer that doesnt even realize that they are getting safelite's crap service, when they expected to be taken care of by us; it is a problem. Actually, I would term it theft. The customer is unwittingly being given an inferior product. Sounds pretty serious to me.
Marketing is expensive and hard enough already, without being submarined at the end of the sales process. I would bet that steering costs you more than you think, when you take into account the ancilliary costs.
Chris Umble was there to talk about METRYX. Period. METRYX. With but few exceptions, the audience asked irrelevant questions about everything but METRYX...his field of expertise. The moderator, Marc Anderson I assume, just allowed it to continue.
Mr. Umble was clearly uncomfortable, but tried to answer questions about Lynx billing procedures and other such unrelated matters to the best of his ability. It was an opportunity wasted by the audience to gain insight into METRYX. Very disappointing.
I am not sure about everyone elses market, but mine demonstrates just how effective steering can be. The Safelite in the town where my main store is located consists of two vans and two techs that recieve their glass in drop shipments every morning. The area has a population of ~150k. With no yellow page, or any other advertising, no salesperson, and no physical store; these two techs do at least 10 sheilds per day. How would your financials look with a minimum $1.2M and a maximum of $450K of overhead?
Mr Umble was uncomfortable because he did not want to answer the questions he was asked. He either could not understand the question or pretended to not understand the question.
It is hard to hear what others ask sometimes because they don't have a Mic, but the questions I did hear were about Metryx and were relevant to Mr Umble experience. He was uncomfortable because people wanted answers to tough questions that he deliberatly chose to dance around.