Does NAGS “Set” Pricing?
I am writing in response to another waste of paper. This time the article was headlined “Dinosaurs and K-marts” (see September/October 2002 AGRR, page 16).
Why do you have to subject your readers to Catherine Howard’s opinions and ideas? I have read articles about how her and her sisters exchange clothes to stories about how much tax K-mart brings into a small town and paleontologists picking over dinosaur bones. I know she is trying to show parallels, but, in my opinion, who cares? I would, however, like to talk about part of the article she wrote concerning small glass shops. She writes, “If conditions change sufficiently in this industry to allow space for the small independent it will be under different circumstances. It won’t be business as usual. There will be no room for free steaks, deductible waiving, slip-shod workmanship billing around, unsafe installations or less than professional behavior.”
It just so happens that some of the small companies out here are doing okay in this downhill market in spite of NAGS pricing, because they have craftspeople who take pride in a job well-done. Some of these small companies get satisfaction from a safe, spotless installation that leaves not even a fingerprint. These are the ones that when they are done, the new windshield sparkles and is safe because it is held for a specific time for a safe drive-away.
To sum this up, this is why we do this work. This is how we get our satisfaction. Not from numbers, not from a national chain mentality that we have to do more to increase the numbers, or just get work done so we can bill it; and, if it leaks, we will fix it later. Nor do we have the mentality that if you do slip-shod workmanship, hack up ten vehicles and only get caught for one you are ahead of the game.
Howard also states that all glass installers should be certified. Isn’t it funny that most of the companies who are out there doing the type of things she talked about are all certified? The companies who were caught on the Fox special are the glass companies that the insurance companies use as preferred shops.
The small companies that she talks about can’t afford the box or front row seat tickets to hand out to the insurance people. You also don’t see the small companies throwing big parties or trips for the insurance people.
We wrote Catherine Howard at NAGS last year with a few questions and got no response. We asked her when Mitchell purchased NAGS the first thing they did was to tell everyone that the list prices were too high and that the insurance companies were not happy. We also asked her if NAGS is only a publishing company, why are they setting prices, and why is it that they are more concerned that the insurance companies be happy and not the glass companies?
At that time, NAGS dropped the list prices 68 percent across the board. NAGS also introduced Benchmark Pricing.™ The idea behind benchmark pricing is that there will be no more discounts off the list price; and, because the list prices have dropped so much, the insurance companies are going to pay more money for labor. To date, the NAGS calculator is still published with benchmark pricing across the front of it—although there is no such thing.
From the time the prices dropped at the introduction of benchmark pricing, the insurance discounts have dropped another 60 percent. Every time there is an update, we look to see how much the prices have gone down. In years past, the reason for the two updates a year was for a small price increase. Now, with every update the prices go down. Since Mitchell purchased NAGS, there are more updates a year that cost the glass companies more money. The only benefit to this that I see is more money to NAGS.
Finally, and again, if NAGS is a publishing company, why are they setting the prices? Considering the fact that Catherine Howard spends time with her thoughts for AGRR, maybe she will answer this question for you, and you could let us know.
Michael R. Stella Jr.
Mike’s Auto Glass Inc.
West Concord, Mass.
The Bill Fits
I read with interest the “Flatlining” article, as well as Bill Batley’s response to the Farmers Insurance pricing scheme (see September/October 2002 AGRR, pages 47 and 64, respectively). I can’t figure out what all the fuss is about, except for one area I’ll discuss.
If you have done your sales and marketing homework right and do such a good job at repairs that you get repeat business and recommendations, you’ve nothing to worry about. The several Farmers agents I work with recommend me based on their insured’s past experience. The same goes for other agents.
If you are sitting around waiting for the networks to call, you’re stupid, nuts, lazy or all three.
So what? The insured has to initiate the call. You’ve got a cell phone or desk phone; when they come in, that’s when you control the claim and when they make the call, not before. Farmers does not seem to be insisting that their insureds use Safelite; that’s steering, and most avoid it.
What’s bad? The flat rate seems to reward repairs, and my doing repairs puts more money into Safelite’s pocket than mine. Not zesty, but what can you do? Batley is right—we are funding our competition. But, I just smile when I think of the $600 backlites they get to put in for $200. I don’t care.
Besides, everyone is starting to realize that networks are a thing of the past; they will either go away or become irrelevant as insureds figure out how the corrupt “ménage a trios” between networks, glass companies and insurance claims operations work.
SuperGlass Windshield Repair
Good Job, AGRR!
You guys are doing a great job with AGRR. I look forward to receiving each issue.
Royal Glass Company
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