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Volume 7    Issue 4           July/August  2005

Are we losing control of our industry while
it is still poised for big growth?
It sure looks possible.
by Kerry Wanstrath

Since windshield repair's inception in 1974, it has undergone many changes. Today’s technology and chemistry produce better and more consistent repairs expanding the size and difficulty of repairable damage. The repair industry went from very simplistic, and sometimes ineffective, methods to more sophisticated and effective methods, incorporating vacuum cycles designed to remove air trapped in the damage thus producing a higher quality repair. 

In the ‘90s the advent of networks serving as an intermediary between the service provider and the insurance companies created more changes. The networks imposed simple changes on repair technicians such as requiring a phone contact during regular business hours, a fax machine, having insurance, providing a guarantee for the insured customer’s protection, etc. Many small businesses could not adapt to these changes in business procedures and found themselves struggling to survive. Many eventually out in the cold. 

Recent events have left some wondering what the future holds for windshield repair and replacement. The real challenges for our industry are not of a technical nature; they are much more complex and sophisticated and require more thought and effort. Many technicians spend hours chatting on forums debating whose system is the best, when the real issues involving their industry have little to do with their equipment.

The Real Issues
Events such as the process of establishment of a licensing program in Connecticut questioned the safety and reliability of windshield repair thus creating uncertainty. Some challenged whether repairs should be done at all. Others want government intervention by requiring a state license and fulfillment of a minimum work experience. I might add that in Connecticut there was little concern about the known problems of many installers taking short cuts or using questionable installation practices. It is not my intention to debate whether any of these accusations are justified. The point is simply that changes occur and all these events might lead us to question where all this is headed. 

It’s enough to make the average tech’s head spin, making him ask, “What is my future?”

I have no doubt windshield repair will be here 5 and 10 years from now; the only exception to that is if some breakthrough technology is developed that eliminates laminated glass for windshields. Barring that, windshield repair is not going anywhere.

The real question is “Who will be performing all the repairs that will be done each year?” By this, I don’t mean will it be you or the other repair-only technicians in your area. I mean will it be the small entrepreneurial local repair-only technician that most NWRA members represent? Or will it be some other auto related service businesses such as car washes, or quick lube, or auto glass shops or auto service centers? Who or what businesses will gain control of the glass repair market? Will it continue to be shared by several different service groups? Or will the forces associated with our industry have an influence on our business and future? 

Yet despite all these problems, the windshield repair industry is still growing. Will you continue sharing in this growing business? 

Whose Growth Is It, Anyway?
So, is there room for growth? Of course.

The more important question is whether windshield repair will fall into the hands of either a competitive industry or government regulations through licensing. Let’s first examine what and who is a competitive industry. There are five competitors that compete right now with a repair-only technician for business. Let’s discuss each of these briefly.

1.    The quick lube industry.

Quick lubes have for sometime embraced windshield repair, many of them have performed windshield repairs longer then some repair-only businesses. Just one major franchise has more than 2,200 locations. It is estimated 6 percent of quick lubes do windshield repair. With many stores having a car count of over 100 vehicles a day, it is easy to see why they embrace repair.

If, the quick lubes can sell just 6 percent of their vehicle count, it can represent annual revenue of $105,000 based on the national average price, if billed through insurance.

Add to that the fact that it’s an easy add-on service for them, and that industry quickly gains our respect as a formidable competitor. Some repair-only shops may even subcontract with them for work. If so, you may want to reconsider your decision.

2.    The car wash industry.

In an effort to expand their business, car washes have also adopted repair as an ancillary service. Many car washes have a car count of more than 300 so they also could become a serious adversary if they embraced repair.

Some repair techs have approached these businesses to contract their services in an effort to grow their business. This can backfire, however, if that business sees a bigger potential for them. So be selective in choosing your business partners.

3.    Car detailers (the car care industry).

Detail shops have added windshield repair to their service options. Since it is a natural fit for these businesses to offer additional services to its existing customers, it is obvious why a detailer would add windshield repair to increase profitability.

4.    Independent glass shops.

Glass shops experiencing shrinking replacement profits are now warming up to the advantages of repair. They may be the most logical place for a consumer to go.

Fortunately for the repair-only industry, until recently replacement shops considered repair as a necessary evil rather then an opportunity to gain customer loyalty and respect. It has been rumored State Farm and others may encourage the increase of deductibles to $500. If this is true, this may change the dynamics of repair for all of us. 

If it is true, I believe there is a significant number of consumers who have been educated about repair over the past 30 years who may force the insurance company to change its mind. Let’s hope this is the case. If not, it becomes a priority to maintain customer contact and continue to create consumer awareness about windshield repair.

5.    The networks.

How can networks be considered competition? Well, if you are not an O&A shop, the practice of steering can be taking business away from you. It is estimated that as many as 80 percent of customers will change shops after being steered by one network’s CSRs. That is an enormous number. Unless steering is eliminated, small repair techs as well as small independent auto glass shops could vanish. Why? Any large business that has purchasing power can negotiate lower prices with insurance companies than a small business can, and eventually the small shops are priced out of the market. 

And if that large business is doing most of the replacements and seeing more vehicles than anyone else it stands to reason it will also do more repairs. So if you are not willing to have someone else control your pricing, I suggest you join the fight to abolish steering. All of this may become moot however, if the State Farm rumor becomes a reality and other insurers follow suit.

Who Gave the Industry Away?
So, why discuss these other businesses? How does their doing repair relate to us in the auto glass repair business? We must ask ourselves why they are doing repairs at all. How did they get into your business? We let them. Yes, we allowed them to slowly sneak into our business. Most small repair-only technicians do very little to promote their business or service in their own territory. 

Ask yourself: Do I look like a professional, do I convey a professional image to others, does my vehicle look professional, and do I have a yellow page ad? Do we think windshield repair is better performed by someone other then qualified repair technicians? Obviously not.

There was a time when McDonalds sold only hamburgers and fries. Why did McDonalds start selling chicken sandwiches? To keep customers coming into their stores rather than a competitor’s. They diversified and grew their business by adding other related products that meshed with their business. We should consider the same tactic. It is these same reasons other businesses have embraced repair. 

We must work smarter to keep customers. Consider the long-term consequences rather then just the short-term gains. This, I believe, applies to all of us in the business including us manufacturers. We have a greater influence in regard to who uses our technology and who we employ as business partners and distributors of our products.

Kerry Wanstrath is the vice president and chief operating officer of Glass Technology, which is based in Durango, Colo.

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