Volume 9, Issue 2 - March/April/May 2007
Who’s the Customer?
The key to success in any business or industry is to understand who the customer is. You can’t effectively market, build a business plan or manage daily operations unless you can identify your customers and their needs.
I am amazed by the apparent agony this causes retailers in the auto glass industry and unfortunately I think it leads to the demise of many.
I have always believed the party responsible for paying the bill is a safe and easy way to identify the customer. If you accept that premise, then you must define the insurance carriers as a key customer, not the enemy. Glass repairs and replacements from the insurance industry still overwhelmingly represent the largest and most profitable segment in the auto glass after-market. If you can see your way to embracing, rather than defying, this customer, you’ll find that your business will become stronger and more robust. I am not suggesting that you have to like these facts, but if you are focused on building and maintaining a strong business, then you certainly should accept this reality.
I began my career in this industry in the early ’90s and started my business from scratch with a targeted focus on serving my customers (the insurance clients) and delivering value and solutions to them. The best way I saw to achieve this was through the delivery of unprecedented windshield repair ratios. At the time, my competition was afraid to embrace repair for fear it would cannibalize replacement sales. I found that my commitment to windshield repair helped me take market-share and grow both repair and replacement volume. In just a couple of years, I built a glass repair and replacement business annually serving tens of thousands of customers, nearly all of whom were direct referrals from insurance companies. The referrals occurred because I found a way to fill a need that they had and to demonstrate my conviction toward serving that need.
Meanwhile, I had competitors try to legislate their way to success on a number of fronts: first, trying to ban or at least greatly minimize windshield repair (the NGA once had a committee that targeted efforts to minimize windshield repair) and then trying to eliminate the insurance carrier’s ability to suggest specific shops. None of those efforts to deprive the customers of their ability to choose the products they wanted, or to select the companies that were capable of delivering those products, were successful. It is interesting that the glass industry has had a long history of pursuing regulation and litigation as a means to “hang on to customers” rather than embracing capitalism and becoming a value-add provider which is the underpinning of our great nation.
As an independent, I was no fan of networks. I wanted and expected access to those insurance clients in exchange for the terrific value I was adding. And in fact, I gained access because I added value and because I maintained that targeted mission. There is nothing wrong with making your case for access, but antagonizing the very customers you are supposed to be serving is self-defeating, the equivalent of committing business suicide. What’s worse is that such tactics encourage your potential customers to avoid your business altogether.
Don’t confuse the issues. The battle for access is completely separate and vastly different from the battle for higher prices. If it is access you want, then embrace your customer and work with them by adding legitimate value. Providing agents with gift cards or waiving portions of the deductible for the policyholder is not a value-add; it is a bribe and bribes are unethical. And creating fictitious addresses for the exploitation of O&A programs or billing for parts not used or required (e.g. mouldings) is just as bad. These tactics will almost certainly restrict your access and support the system you criticize.
I suggest you look at the direction you want to take your business and make sure that you embrace your key customers and earn the access to insurance clients you deserve.
Paul J. Gross is president of Harmon Solutions Group, Eau Claire, Wis. Mr. Gross’s opinions are solely his own and not necessarily those of this magazine.