IGA Meets in Las Vegas
Annual Independent's Day Convention explores industry issues
By Charles Cumpston
The Independent Glass Association (IGA) held its Independent’s Day Conference and Spring Glass Show™ in Las Vegas the beginning of March at the Golden Nugget hotel and the Cashman Center exhibition and meeting facility.
An intense day and a half of educational sessions explored industry issues facing independent auto glass replacement shops today. The Spring Glass Show™ was open both days in tandem with the educational sessions.
The program in Las Vegas got underway with a joint session by the IGA and the National Windshield Repair Association (NWRA), which co-located its annual meeting with the IGA event, on two of the most important developments affecting the industry: the Auto Glass Replacement Safety Standard (AGRSS) and Repair of Laminated Auto Glass (ROLAGS).
Carl Tompkins, chairperson of the AGRSS credentialing committee, explained how the AGRSS program works. “Our future depends on AGRSS,” he told the crowd.
“We have corrected and continue to correct the ills which our industry has been subjected to historically,” he said. “We have improved technician performance and professionalism, provided procedures to meet pertinent FMVSS standards, set guidelines and objectives for suppliers, promoted awareness for safe auto glass installation, provided a code of best practices, achieved consistency among installation practices, and created a common benchmark,” he explained.
He pointed out that the registration program was created so that businesses could promote themselves as complying with the AGRSS Standard. “You must take the initiative in your local community to brand AGRSS with your company. No association can do that; the AGRSS Council can’t do that; you have to do it,” he told attendees.
Dave Taylor, vice chair of the ROLAGS committee, described the draft standard for windshield repair. (See page 40 for report on this presentation.)
Click, Click a Lead
There is a lot of price pressure, Marc Anderson, IGA executive director, told attendees in opening the association’s individual program. “There are two places that we are being hurt: by steering and by the Internet,” he stated. “As a stand-alone shop in an individual market, it is hard to harness the potential of the Internet,” he explained. He introduced Dave Zoldowski, IGA president, who explained a program under consideration to level the Internet playing field by having an IGA Web presence for consumers who need auto glass work.
Zoldowski pointed out that the number of customers looking for auto glass shops on-line has grown 800 percent in the last five years. In January, Yahoo had almost 170,000 people do a search for auto glass.
“The pay-per-click market is very expensive, and as an individual shop, you can’t do it,” he said. “But as a group it becomes possible.” The goal, he said, is to develop a high-profile Web site that will be designed to capture any Web searcher looking for auto glass replacement or windshield repair within their local hometown. On-line customers would be able to choose their state and city and be able to see what IGA member glass shops are listed in their local area. “It will operate on the same principle as other Internet operators such as 89glass, which captures the job and then puts it out for bid and pays the local shop which does the work,” he explained.
Steering—The Not-So-Silent Killer
“Steering and pricing are interconnected issues,” said Anderson, in introducing a session on that subject. He said that, although it is controversial, litigation is the way to control this practice because it is a legal issue. “We say to the court that we think this is an illegal practice and we want you to rule on it,” he explained. “We think that if we can change scripting practices such as telling consumers that they may have out-of-pocket expenses, that will go a long way to control steering.” Anderson said that there are laws in dozens of states which give consumer choice and when that is being ignored, the law is being flaunted. “The IGA is about making a level playing field and using the law to do that,” he said.
IGA attorney Tom Goodman gave a status report on the IGA anti-steering litigation.
He said that IGA did not lose on the merits on any of the grounds in its first suit. The claims were dismissed on procedural grounds, he stated.
“In round two,” he continued, “we will start a new list and take shops on the list that have asked us to become plaintiffs, and a list of the consumer statutes which apply. We are not going to sue as an association. We will not make that mistake again.”
Anderson said that he didn’t know what the timeframe is for round two, but the expectation is that it will be soon.
In the next phase of the educational program, Chris Umble, vice president of strategic operations, LYNX Services, discussed the METRYX industry services registry.
More than 9,500 companies have registered with METRYX, according to Umble. They have over 25,000 service areas, and less than 100 zip codes are not covered in the program. There are almost 30,000 registered technicians. “That is a lot of data to validate,” he said in discussing the phase the service is currently in. He gave the example of AGRSS registration. Approximately 1,800 companies reported they were AGRSS-registered, and in reality there are only 500. So METRYX had to contact the companies which said they were but aren’t. Some, he reported, thought that they were AGRSS registered and were surprised to find out they weren’t.
He referenced Dave Casey’s article in the January/February issue of AGRR (page 72) in which he says that if METRYX does not result in value creation for the consumers, companies and insurers, then it is a waste of time. “We agree with that completely. We don’t have any more time and money than you do, so we want to go on from validation to value creation,” he said.
Chuck Lloyd, an attorney who has been prominent in the auto glass industry, gave the meeting’s keynote address.
“I’m tired of presiding over business funerals,” he said at the outset. “I’ve had it with an industry that has been trampled on and has turned its fate over to others and waits for a knight in shining armor to come to the rescue.”
He said that he didn’t sign on with the IGA lawsuit two years ago because he did not think the industry had the resolve at that time to do what needed to be done to win it. “Unfortunately, I was right.” However, he said that he thinks that the industry’s ire has been raised enough to tackle the issue now so he has signed on as co-counsel with the new IGA lawsuit.
He said the three most important things facing the industry are: access to jobs (the number one issue), price erosion, and lack of vision. “No one wants to look beyond their own misery,” he said. “You’ve got to. That’s the only way problems like steering and short pays are going to be dealt with. It’s not a fair fight and you can’t win on your own,” he said.
He also spent considerable time talking about the lack of marketing. He called current industry marketing efforts, overall, pathetic. He said that being on a rotation basis with the networks makes marketing more important than ever. “You have to promote your services, your quality,” he told attendees.
His advice was to talk to people about the things that matter to them. They want convenience; they want security; they want safety. “You can’t assume that consumers know that mobile service is available. Someone is telling them, but they may not know that you can do it,” he said. “You’ve got to let them know.” Find out why consumers are canceling their jobs. “If it’s because they are being told that they may have out of pocket costs if they use your shop, let IGA know. That’s what we’re here for,” he said.
Take a Break Even
David Carnahan, Mainstreet Computers, discussed financial management. He said it is estimated that 80 percent of smaller companies operate without a formal financial plan. But, he added, it is not enough to have a plan; it has to be managed. He pointed out that successful companies are proactive, not reactive. Successful companies know their market and their sales mix, Carnahan said. “They track critical data and use it to direct their decisions,” he stated.
One piece of advice he gave is that all financial information should be reevaluated constantly so that a company is checking to see if the assumptions made (sales, sales mix, cost of sales) are actually happening.
Lynette Hartman, who heads NEON, a company that helps shops with payments for insurance work, talked about how a company can collect more of its money.
She provided guidelines for if a company wants to set up in-house collections to get full payment from insurance companies. She said that if a company sets up such a program, specific personnel should be designated to do this and they should be knowledgeable about what is involved in the task.
The sequence of events, she said, are to resend the statement, send a first letter and then a follow-up letter. Next comes a demand letter and then phone calls to get the insurance company to pay the total amount owed. If this does not resolve the issue, a complaint can be made to the department of insurance. She advised knowing if the state department is truly helpful or not. Small claims court is the next step. Regular court can be very helpful if the numbers start to get large, she said. Arbitration may come into play at this point.
To Market, To Market
IGA President David Zoldowski discussed the windshield repair marketing plan which has been successful for his company. “We use glass repair to market our company and have found it to be a very successful method,” he stated. If you’re in windshield repair, you have to be able to build value for this to the consumer, he added. When repair is the better alternative to replacement, make the consumer aware of this, he said.
John Hennessy, Crystal Clear Window Works, discussed diversification. “If you always do what you’ve always done, you’ll always get what you always got,” he told attendees. “You’ve got to change and diversifying is an important part of that.” He gave examples of companies which have established markets based on innovative ideas and marketing such as Microsoft, Google, eBay, Staples, Starbucks, Home Depot and Wal-Mart. “They have changed the business rules and turned billion-dollar ideas into billion-dollar businesses.”
He said that companies that successfully diversify challenge the way they are doing business. “Auto glass is only 27 percent of the glass market. There is also residential, commercial and the specialty glass markets. You have to think about what you want your business to be and where you want it to go,” he explained. “Stop working in your business and start working on your business,” he advised.
In the final session, Jamie Glazebrook, Coach Glass, spoke about non-advertising marketing. “Marketing means running a first-rate business and letting people know about it,” he explained. “Every action your company takes sends a marketing message.”
He pointed out that customer recommendations are better than paid advertising because it is more cost effective and it builds loyalty. It is also trustworthy because someone the consumer knows is recommending it.
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