Too Far This Time?

My friend Marco used to work for me. He went out on his own about a long time ago because he wanted to try running his own business. As luck would have it, he was pretty good at it. He now owns two auto glass installation stores in two different parts of town and employs four techs. He is a success story. He is also a friend who happens to be a competitor.

Marco and I like to get together about once every two months or so, after work, on a Friday, to down a few glasses on tap and discuss business in general. Believe me when I say we talk about a lot of things, but we never discuss our pricing. The only way I know what he charges is when we call him up and secret-shop him. I’m guessing he does the same to me.Marco doesn’t belong to any networks. He was on a few in the beginning but got off of them over time. I envy him that. He gets no referrals from them, has no agreements with them, no contract—you get the idea.

So it galls him beyond words when he has to call one of those super-duper 800 numbers with his insured customer on the line, and talk to, bargain with and argue against his competitor to get paid. Until lately, though, Marco kept most of his feelings to himself. “I hate calling them,” he’d say, “but my customer is still my customer.”

Recently, however, Marco has been amazed by some of the tactics being newly taken by some TPAs. Now, I tell you Marco is not a native to this country. He emigrated here as a teenager and took the citizen’s test many years ago. He believes America is a great country, a world-class country and that its laws will protect him. This is all part of why we never discuss price. Marco went to some association seminar years ago and they scared the shorts he was wearing off him. So we never discuss it. In fact, Marco told me not even to tell him when I was raising my prices because that could be considered a “sign” to him to do the same. I respect that.

Like I said, Marco has been having a hard time getting a grasp of some of new tactics being used. Although he has some language issues sometimes, Marco is no slouch in the intelligencia department (read that high IQ and great business acumen).

“Uri,” he says to me, “I do not understand. My customer calls me for a windshield and I want to sell it to him. So we call the 800 number and I tell my customer, ‘Always make sure to ask for Marco, tell them you want Marco.’ So they do. Then my customer—this is my customer—gets an e-mail from competitor saying my company was ‘assigned’ the job. What does that mean, ‘assigned?’ This person is my customer. My customer then gets an e-mail telling him if there is a problem, he should call my competitor.

“Now, Uri, you know I have no agreement with this glass company. I have no agreement with this insurance company. Where do they get the right to steal my customer? That is what they are doing. Where do they get the right to interfere with my business? I like insurance companies, good hands, big rocks, on my side, all that. But the insurance company takes my customer’s info and gives it to my competitor. I have no contract with them. They get my customer’s info. They ‘assign’ him to me. This is not right. My customers ask, ‘Do they own your company, Marco? Are you part of them?’ I am not and this is not right.

“Ah, yes,” I say after my third cool one, “but this is America, Marco. Remember, you are so high on the laws here.” I feel bad for him really as I watch his innocence disintegrate on the phone to an 800 number.

He was in pretty good spirits yesterday when I saw him. “My nonno used to tell me that everything is timing,” he said. “That’s funny,” I said in an irony lost on him, “mine used to say that sooner or later snakes come out to sun themselves.”

“Uri, do you know what they are doing now?” he asked. “When my customer—my customer I have no agreement with any …

“I know, Marco, I know … ”

“When my customer and I call in to the 800 number and the customer’s deductible is higher than the cost of the job, the glass company tells them they are not processing the claim but—GET THIS—they tell my customer, my customer, that even though there will be no insurance claim that, whatever glass shop they use, this amount is the usual and customary amount the customer should pay for the windshield. My customer is told by a competitor and by the insurance companies what they should be paying in a call where there is no claim.”

“Marco, I think we’ve hit a new low here,” I said, shaking my head.”No, it’s true,” he said. “But, Uri, think about it. I don’t think they have any right to do this, and by doing so, isn’t this signaling to the customer what my competitor thinks–or wants—usual and customary pricing to be?” (By the way, I notice Marco’s English has gotten much, much better in a matter of minutes).

But he’s not done.

And further, Uri, aren’t those prices then used by the insurance company to determine what’s usual and customary? Did you see the recent story from New York on a similar situation in the health care industry?

“Let me get this straight, Marco. You think the insurance companies and their glass shop-claims administrators are telling people who are technically not even filing a claim what they should pay for glass no matter where they buy it?” I ask.

“Yes, yes, I do,” he said with eyes narrowing. “It sure does seem like signaling to me and it seems like an attempt by the insurance company to keep prices artificially low. I mean, suppose one company and only one company that says it has less than a twenty percent market share in the country says what is usual and customary, is it really? I think not. And do they even have a right to communicate that to my customer who is not filing a claim? I have no relationship with them. How dare they? I think maybe they have gone too far this time, Uri.”Maybe indeed.