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.
Thursday, January 22, 2009
Tuesday, December 9, 2008
Price Fixers
Price fixers.
Got your attention, didn’t I? That’s good because you are not going to like me after this post. I am going to say some things you don’t want to hear.
That’s because there’s been a lot of comments flying lately about those insurance companies and how they fix prices. You know, the dastards and the way they say they will only pay a certain amount and, worse yet, won’t pay more than that even when we send a bill. They don’t pay us what we deserve or rightfully charge, so they must be fixing prices, right?
Wrong. They are just smart businesspeople—like my wife. My wife is the smartest person I know. She tells me so everyday.
When I was younger, my spouse used to drag me around to garage sales. Man, I hated that.
Every Saturday, we’d go from place to place and buy more junk we didn’t need. You know the drill. Anyway, wifey would see something she liked and saddle on up to the garage sale meister with her usual question, “how much is that?” The “proprietor” would check the price tag on the back and tell her. “Oh, I don’t want to pay that much,” wife-o-mine would swoon. Then she’d counter by naming an amount that was almost always exactly 60 percent of the price on the tag.
Sometimes, when we’d be at one of those gigantic flea markets on Sunday afternoons (hated those things too), she could flit from table to table until she found another spot with exactly the same merchandise and with a proprietor willing to sell it to her at the price she wanted to pay.
Is my wife the price fixer? Did she set the price? She couldn’t, because she was buying. If no one agreed to sell at the price she wanted, she’d have nothing to buy. So, in reality, she was a good opportunist, but no price fixer.In the end, each garage sale holder or flea market exhibitor sets their own prices. They’ve had to make choices. If they didn’t want to come down to my wife’s 60 percent off, they didn’t have to, but they’d lose her business. That’s their choice.
What I’m saying is something you should already know: The reason that insurance companies offer the prices they do is because they can get people to do the work for those prices. And just because you can’t do it for that price, there are others out there who can and do. Some of those guys don’t know their costs and will be out of business hopefully before they take the rest of us with them. Others may buy better or pay less for workers or do something that allows them to have lower expenses. But each makes a conscious decision to accept the amount offered.
Now wait, you say, “Not me. I don’t accept it. When the insurance companies call me with an outrageous offer, I tell them that’s below my rates, or maybe I have to charge for something that they don’t like to pay for (like rust removal), but I don’t accept those rates.”
Here’s where life gets unfair. Most of the courts have held thus far that if you know what someone will pay, and you know they won’t pay more, and you do the work anyway, you have agreed to that price. That’s why the TPAs send you over their forms lickety-split. The only choices you have are to accept the work at their rate or not do the work. That is your only choice but it is YOUR choice nonetheless. And the only way they will change their pricing is when they get to the point where they can’t find anyone to do their work at the price they want to pay.
The reason that those insurers can “set the price” is because the auto glass industry lets them. We sell our profit soul to the devil in exchange for volume.
The way it works isn’t fair. But it is the way it works. If life were fair, we wouldn’t be treated like thieves for charging what we need to. If life were fair, courts wouldn’t say “you knew what they’d pay and you still did the job.” If life were fair, I wouldn’t be scribbling this on a piece of paper waiting for my wife to finish her “shopping” in somebody’s garage.
Got your attention, didn’t I? That’s good because you are not going to like me after this post. I am going to say some things you don’t want to hear.
That’s because there’s been a lot of comments flying lately about those insurance companies and how they fix prices. You know, the dastards and the way they say they will only pay a certain amount and, worse yet, won’t pay more than that even when we send a bill. They don’t pay us what we deserve or rightfully charge, so they must be fixing prices, right?
Wrong. They are just smart businesspeople—like my wife. My wife is the smartest person I know. She tells me so everyday.
When I was younger, my spouse used to drag me around to garage sales. Man, I hated that.
Every Saturday, we’d go from place to place and buy more junk we didn’t need. You know the drill. Anyway, wifey would see something she liked and saddle on up to the garage sale meister with her usual question, “how much is that?” The “proprietor” would check the price tag on the back and tell her. “Oh, I don’t want to pay that much,” wife-o-mine would swoon. Then she’d counter by naming an amount that was almost always exactly 60 percent of the price on the tag.
Sometimes, when we’d be at one of those gigantic flea markets on Sunday afternoons (hated those things too), she could flit from table to table until she found another spot with exactly the same merchandise and with a proprietor willing to sell it to her at the price she wanted to pay.
Is my wife the price fixer? Did she set the price? She couldn’t, because she was buying. If no one agreed to sell at the price she wanted, she’d have nothing to buy. So, in reality, she was a good opportunist, but no price fixer.In the end, each garage sale holder or flea market exhibitor sets their own prices. They’ve had to make choices. If they didn’t want to come down to my wife’s 60 percent off, they didn’t have to, but they’d lose her business. That’s their choice.
What I’m saying is something you should already know: The reason that insurance companies offer the prices they do is because they can get people to do the work for those prices. And just because you can’t do it for that price, there are others out there who can and do. Some of those guys don’t know their costs and will be out of business hopefully before they take the rest of us with them. Others may buy better or pay less for workers or do something that allows them to have lower expenses. But each makes a conscious decision to accept the amount offered.
Now wait, you say, “Not me. I don’t accept it. When the insurance companies call me with an outrageous offer, I tell them that’s below my rates, or maybe I have to charge for something that they don’t like to pay for (like rust removal), but I don’t accept those rates.”
Here’s where life gets unfair. Most of the courts have held thus far that if you know what someone will pay, and you know they won’t pay more, and you do the work anyway, you have agreed to that price. That’s why the TPAs send you over their forms lickety-split. The only choices you have are to accept the work at their rate or not do the work. That is your only choice but it is YOUR choice nonetheless. And the only way they will change their pricing is when they get to the point where they can’t find anyone to do their work at the price they want to pay.
The reason that those insurers can “set the price” is because the auto glass industry lets them. We sell our profit soul to the devil in exchange for volume.
The way it works isn’t fair. But it is the way it works. If life were fair, we wouldn’t be treated like thieves for charging what we need to. If life were fair, courts wouldn’t say “you knew what they’d pay and you still did the job.” If life were fair, I wouldn’t be scribbling this on a piece of paper waiting for my wife to finish her “shopping” in somebody’s garage.
Tuesday, October 21, 2008
Penny-Wise Still Means Pound Foolish
When I was a hot shot youth careening around my neighborhood on my groovy dark-blue bike with the wicked cool banana-seat, one of my favorite stops was the Penny Shop on Main Avenue. All of the 800-square-foot storefront was full of bins of various candies and other sweet delights, every single one homemade by the proprietors, Wolfgang and Helga Schmidtt. The Schmidtts had brought their incredible candy-making abilities to my hometown from Colon, Germany, many years before and ran a modest business on the town’s main street.
My absolute favorite activity was to get home from school, hop on the bike and pedal over to buy 25 cents worth of red quarters, which were dropped ever so gingerly into a tiny brown paper bag by Helga as I waited in rapt anticipation. Red quarters are a heavenly rewarding licorice that I could hold under my tongue as they melted, sending my mouth into a sweet euphoric stupor.
Eventually, my praises of the Penny Shop traveled so far and wide that all my friends became frequent visitors. Even my mom became a disciple and would buy large boxes of the divine confections for special occasions like Father’s Day and Thanksgiving.
One Christmas Eve when we were having a particularly large group of guests over, my mom actually bought two of the Schmidtts’ largest confection boxes. Well, she tried to, anyway. The two boxes were just a little more money than Mom had left in her wallet so she pulled out her checkbook to write a check.
“No checks, just cash,” said Mr. Schmidtt, in a deep baritone voice.
“Oh Mr. Schmidtt, I don’t have enough cash with me. Could I just give you a check just this time?” Mom asked softly.
“Oh, so sorry,” he replied, “no checks, just cash.”
Mom made a few other attempts at a compromise with Mr. Schmidtt. She reminded him, in that nice way that only mothers can, that she and her family had been long and good customers and that Mr. Schmidtt knew where we lived.
“Yes, yes,” he agreed, “you are wonderful customer—great, best customer. Thank you for business. So sorry. No checks, just cash.”
Of course, the Penny Shop did not accept credit cards and debit cards hadn’t been born yet. So Mom asked Mr. Schmidtt if she could use what cash she had and give him the rest in a check.
“No,” said Mr. Schmidtt, “no checks, just cash. Buy one box now, come back for the other.”
If we wanted the rest of the candy—by now a Christmas staple and tradition for my family—we were going to have to go and get the cash and come back. Normally this would have been a mild inconvenience, but on Christmas Eve, with lots of small errands and last-minute shopping to do, it was really going to hurt us time-wise.
So we did a few of those errands, stopped at the bank and headed back to the Penny Shop. I was ticked, but my Mom took it more in stride.
”Mom, aren’t you a little annoyed with the Schmidtts?” I asked her on the ride back. “I mean, couldn’t they have let us give them a check?”
“No, I’m not really,” she answered. She stopped to ponder this for a minute as I noticed the reindeer pin sparkling on her coat. Then she continued. “The Penny Shop has to have rules and the Schmidtts are the proprietors. They get to make the rules. They have the right to decide what kind of customers they want and what type of payment they will accept. I wish they had made an exception so we didn’t have to go all the way back, but it’s their shop and they get to decide how they get paid. That’s a rule of business,” said my mother, triumphant that she was teaching her little boy a business lesson.
My Christmas visit to the Penny Shop of 44 years ago came flooding back to me last week, when I read that Safelite Solutions was now going to deduct a 1-percent tariff from any non-electronic payments it makes to glass shops. If you remember a number of years ago they tried to do something similar and then backed off when their legal counsel warned them against it.
And I find it interesting that the fee is one percent of the invoice—I guess it costs them more money to process a manual check for $200 than $199. Yeah, right.
It’s amazing how the rules of business have changed—or maybe they are just different in the auto glass industry. Here, the customers get to decide how they pay you, when they pay you and what they want to pay you. Can you imagine any other industry where a customer can say “Hey, I am going to pay you electronically, and if you want me to pay you another way, I’m going to deduct a fee for it?”
Can you imagine any other industry where your customer chooses you and you have to call a competitor to get authorization to do the job? And that competitor says “Uh. Oh … by calling me you are agreeing to my pricing and terms?” I guess my Mom’s business lesson was way off because in the auto glass industry it’s the CUSTOMER who decides those business terms, not the proprietors.
If you have an agreement with a network, you are at their mercy. You signed it and you live by it. But if you do not have such an agreement, I wonder why more of our businesses don’t just follow the Schmidtts’ example and say “It’s my business and I get to decide, not my customer.”
I would have liked to see the Schmidtts own an auto glass company. I have a feeling they would have gotten their payments the way they wanted them, without any deductions by their customers.
Now that would have been sweet.
My absolute favorite activity was to get home from school, hop on the bike and pedal over to buy 25 cents worth of red quarters, which were dropped ever so gingerly into a tiny brown paper bag by Helga as I waited in rapt anticipation. Red quarters are a heavenly rewarding licorice that I could hold under my tongue as they melted, sending my mouth into a sweet euphoric stupor.
Eventually, my praises of the Penny Shop traveled so far and wide that all my friends became frequent visitors. Even my mom became a disciple and would buy large boxes of the divine confections for special occasions like Father’s Day and Thanksgiving.
One Christmas Eve when we were having a particularly large group of guests over, my mom actually bought two of the Schmidtts’ largest confection boxes. Well, she tried to, anyway. The two boxes were just a little more money than Mom had left in her wallet so she pulled out her checkbook to write a check.
“No checks, just cash,” said Mr. Schmidtt, in a deep baritone voice.
“Oh Mr. Schmidtt, I don’t have enough cash with me. Could I just give you a check just this time?” Mom asked softly.
“Oh, so sorry,” he replied, “no checks, just cash.”
Mom made a few other attempts at a compromise with Mr. Schmidtt. She reminded him, in that nice way that only mothers can, that she and her family had been long and good customers and that Mr. Schmidtt knew where we lived.
“Yes, yes,” he agreed, “you are wonderful customer—great, best customer. Thank you for business. So sorry. No checks, just cash.”
Of course, the Penny Shop did not accept credit cards and debit cards hadn’t been born yet. So Mom asked Mr. Schmidtt if she could use what cash she had and give him the rest in a check.
“No,” said Mr. Schmidtt, “no checks, just cash. Buy one box now, come back for the other.”
If we wanted the rest of the candy—by now a Christmas staple and tradition for my family—we were going to have to go and get the cash and come back. Normally this would have been a mild inconvenience, but on Christmas Eve, with lots of small errands and last-minute shopping to do, it was really going to hurt us time-wise.
So we did a few of those errands, stopped at the bank and headed back to the Penny Shop. I was ticked, but my Mom took it more in stride.
”Mom, aren’t you a little annoyed with the Schmidtts?” I asked her on the ride back. “I mean, couldn’t they have let us give them a check?”
“No, I’m not really,” she answered. She stopped to ponder this for a minute as I noticed the reindeer pin sparkling on her coat. Then she continued. “The Penny Shop has to have rules and the Schmidtts are the proprietors. They get to make the rules. They have the right to decide what kind of customers they want and what type of payment they will accept. I wish they had made an exception so we didn’t have to go all the way back, but it’s their shop and they get to decide how they get paid. That’s a rule of business,” said my mother, triumphant that she was teaching her little boy a business lesson.
My Christmas visit to the Penny Shop of 44 years ago came flooding back to me last week, when I read that Safelite Solutions was now going to deduct a 1-percent tariff from any non-electronic payments it makes to glass shops. If you remember a number of years ago they tried to do something similar and then backed off when their legal counsel warned them against it.
And I find it interesting that the fee is one percent of the invoice—I guess it costs them more money to process a manual check for $200 than $199. Yeah, right.
It’s amazing how the rules of business have changed—or maybe they are just different in the auto glass industry. Here, the customers get to decide how they pay you, when they pay you and what they want to pay you. Can you imagine any other industry where a customer can say “Hey, I am going to pay you electronically, and if you want me to pay you another way, I’m going to deduct a fee for it?”
Can you imagine any other industry where your customer chooses you and you have to call a competitor to get authorization to do the job? And that competitor says “Uh. Oh … by calling me you are agreeing to my pricing and terms?” I guess my Mom’s business lesson was way off because in the auto glass industry it’s the CUSTOMER who decides those business terms, not the proprietors.
If you have an agreement with a network, you are at their mercy. You signed it and you live by it. But if you do not have such an agreement, I wonder why more of our businesses don’t just follow the Schmidtts’ example and say “It’s my business and I get to decide, not my customer.”
I would have liked to see the Schmidtts own an auto glass company. I have a feeling they would have gotten their payments the way they wanted them, without any deductions by their customers.
Now that would have been sweet.
Friday, September 5, 2008
Tuesday, August 26, 2008
The History Channel
If you watch the Gary Lubner interviews on glassBYTEs.com, you see one sharp, very focused businessman. Mr. Lubner has impeccable educational and business credentials and is one of the sharpest guys the auto glass industry has ever seen. I also give him a lot of credit for doing the interviews. They gave many people a chance to hear his views firsthand and I would suspect that, like me, many were impressed with what they heard even if they feared what he was saying at the same time. Those who compete with him now have a better idea of what they’re up against.
If Mr. Lubner lacks anything in his ability to tackle the U.S. market it is this: he lacks historical perspective. It’s not something he would be expected to have, given his relatively recent entry into the United States, but it is something I would have thought his stateside staff would provide him.
Nowhere was that more obvious than in his comments around trade associations. He contends that the auto glass industry should have only one. If he had had such historical perspective, he would have known that years ago the auto glass industry did have one trade association. But that association, for various reasons, did not represent the interests of all auto glass companies.
Because that association no longer met their needs, other groups were formed. The National Windshield Repair Association and the Independent Glass Association are two such groups. Each developed around a common set of interests and problems. The AGRSS Standard came along because the industry had no standards and needed some. Recognizing that such standards would need to belong to the industry as a whole, and not to any one particular group or organization, the AGRSS Council formed.
Without the benefit of such historical hindsight, Mr. Lubner commented that each group maintains its separation because of egos and such. In reality, that’s not the case. They are separate because they have separate needs, not because of someone’s conceit. He’d have no way of knowing this, of course, because he doesn’t have the history.
If Mr. Lubner lacks anything in his ability to tackle the U.S. market it is this: he lacks historical perspective. It’s not something he would be expected to have, given his relatively recent entry into the United States, but it is something I would have thought his stateside staff would provide him.
Nowhere was that more obvious than in his comments around trade associations. He contends that the auto glass industry should have only one. If he had had such historical perspective, he would have known that years ago the auto glass industry did have one trade association. But that association, for various reasons, did not represent the interests of all auto glass companies.
Because that association no longer met their needs, other groups were formed. The National Windshield Repair Association and the Independent Glass Association are two such groups. Each developed around a common set of interests and problems. The AGRSS Standard came along because the industry had no standards and needed some. Recognizing that such standards would need to belong to the industry as a whole, and not to any one particular group or organization, the AGRSS Council formed.
Without the benefit of such historical hindsight, Mr. Lubner commented that each group maintains its separation because of egos and such. In reality, that’s not the case. They are separate because they have separate needs, not because of someone’s conceit. He’d have no way of knowing this, of course, because he doesn’t have the history.
Tuesday, July 15, 2008
A Week in Thought
I’ve been hiding from Deb Levy all week, because she has been calling and e-mailing me about this blog. She’s trying to tell me what I already know: it’s a little late, a tad delayed, perhaps? No, she is going to tell me it’s way overdue. I want her—and you—to know why it’s delayed, though. It’s because I hadn’t quite figured out how to say what I want to say about the Belron-Diamond deal.
For the first few days, I knew there was something that bothered me about the whole thing, but I couldn’t put my finger on it. It wasn’t the usual reasons you might expect. Yeah, the new “Belmond” (Belron mated with Diamond) is going to be gargantuan, but there is no crime in size.
And there’s so much talk about steering and anti-steering that it’s hard to know what’s real and what’s myth. To me, the definition of steering is almost the same as the one the Supreme Court used to defined pornography many years ago. They said “we don’t know how to define it, but we sure know it when we see it.” So every time one of my customers gets steered away from me, I see it and know what it is.
I wasn’t particularly unhappy to see Tom Feeney put in charge because he tends to tell you where he stands, even if it’s unpopular, and I can respect that.
So after a week of deep thought—and you know how hard it is for us guys to get in touch with our feelings—I can now articulate the two main things that are bothering me about the deal.
First, I feel sad for a bunch of people. I feel bad for companies that have to compete against Belmond in major markets. They’ve just consolidated and strengthened their presence even more. I feel bad for the quality suppliers that supplied Diamond but will now be cast adrift a replaced with Belron suppliers in their stead. I feel bad for the Diamond employees who have their jobs in limbo as of today. I even feel sorry for the insurers because they are too stupid to realize their role in reducing competition. The fewer competitors out there, the more adroitly Belron will be able to get the prices it wants from the insurance companies. We just saw this happen with repair rates. Just give them a year or two to clear out the market of a lot of competitors, then see what you’ll be paying for replacement glass. Go ask anyone in Canada.
But most of all, I feel cheated. Most industries have one, two, three companies that are market leaders. They set the agenda for their industry and they help develop best practices on an industry-wide basis. They define and participate in industry debate. They are part of the industry team.
But not in the auto glass industry. Belron seeks to differentiate itself by not playing on the same team. Its stance on AGRSS—our industry’s best hope for a sustainable future—is unbelievable. The company doesn’t even understand what AGRSS registration is and attempts to frame it as a certification program before their insurance customers. Belron says its Saftech program is better than AGRSS registration. They are two entirely different things. Belron has its own self-certification, its own auto glass competiton and its own programs. It’s one thing to be a market leader and help raise a whole industry up. By doing so you fulfill a role as an accomplished leader—and you can still leave everyone in the dust.
Wednesday, May 28, 2008
Dear Mr. Feeney:
Thank you very much for your presentation at the IGA Conference in Las Vegas last month. It was incredibly generous of you to speak before a group that you yourself acknowledged was “unfriendly.” That took a lot of guts and was a very courageous thing to do. I especially like the part where you talked about how Safelite and independent glass shops have more in common than they have differences. That’s very true. It takes a lot of fortitude to place yourself in the crosshairs when you don’t have to do it. And you didn’t have to. What you did will be remembered as a landmark moment in the auto glass industry.
Now I know you’ve gotten beat up a lot on the Web recently, and I’m not going to do that here. Like I said, you didn’t have to make that speech. I’m not going to ask you about the AGRSS thing or who the customer is or any of those “gotcha” questions a couple of people in the audience asked (though most of the questions were pretty straight-forward). I’m not even going to argue with you about the contention that all you guys do is “answer the phones” and that shouldn’t constitute steering. I’m pretty sure that the claims administration you do involves more than just answering phones.
But there are two questions I have got to ask, because they go to the heart of one of those differences between Safelite and the independents. You mentioned that you believe there should be a standard requiring drug testing and background checks for technicians. You said you don’t believe the AGRSS Standard goes far enough and should require this (never mind AGRSS is not a technician standard or certification, I could tell by your comments you didn’t get that and had been poorly briefed). It was also clear from your comments that this drug testing and background check idea is extremely important to your company. You mentioned that your techs are drug-tested. I expect there are background checks too.
So, Mr. Feeney, here’s my first question: If drug testing and background checks are so important to you, then why don’t you require them of the companies on your network? Why don’t you suggest to your insurance partner that they require them as part of the criteria they use? Why don’t you apply the same standards to the companies that you subcontract work to as you say you apply internally?
I gotta tell you, Mr. Feeney, I haven’t seen a whole lot of concern from Safelite about the companies that join your network. I have seen a ton of concern over making sure those companies accept the price you want to pay, but not much concern over the quality of that company or the technicians they have. If these background checks and drug testing are important, why don’t you require them? Please believe me, I am not asking this to be contrary. I would really like to know the answer because the only answer I can think of can’t possibly be the right one.
The only reason I can think of is that doing so would decrease the number of shops that could do your work. It would mean higher costs for Belron and higher prices for its customers. And I know that can’t be the reason because, as you said, safety and quality are more important than price.
And let’s talk about safety for a minute. You mentioned that you believe your own internal “certification” program is better than AGRSS. You emphasized how important quality is to you. So here’s my second question: If safety and quality are so important, then why don’t you require certification for those companies on your network? Heck, you could require any kind of certification you wanted—even your own—from the companies that do work for you.
If I didn’t know better, I’d think you were trying to keep the industry uneducated. It’s a lot easier—and a lot cheaper—to compete against guys when you can tell your insurance company you’re better than they are. You guys must laugh your heads off when the insurance companies buy it.
Or maybe you don’t require it because you know that a ton of people doing your work wouldn’t be able to any more and then you’d have some supply and demand issues, if you know what I mean; you’d have lots of jobs and no one to do them. That could be a threat to the whole network model.
The ability to use uneducated, “inferior” people for economic gain while refusing to educate them has long been the sign of an oppressor and the methods he uses to keep the oppressed in line. Surely you guys are better than this.
Belron is the biggest AG installer in the word. Say the word and thy will be done.
There’s a disconnect when you talk about the need for these things, yet you dole out a lot of work without any such requirements. Sorta like Congress exempting itself from following the laws it makes. It’s a pretty neat trick.
But that is just what it is: a trick.
Thank you again for your time. I look forward to hearing from you.
Thank you very much for your presentation at the IGA Conference in Las Vegas last month. It was incredibly generous of you to speak before a group that you yourself acknowledged was “unfriendly.” That took a lot of guts and was a very courageous thing to do. I especially like the part where you talked about how Safelite and independent glass shops have more in common than they have differences. That’s very true. It takes a lot of fortitude to place yourself in the crosshairs when you don’t have to do it. And you didn’t have to. What you did will be remembered as a landmark moment in the auto glass industry.
Now I know you’ve gotten beat up a lot on the Web recently, and I’m not going to do that here. Like I said, you didn’t have to make that speech. I’m not going to ask you about the AGRSS thing or who the customer is or any of those “gotcha” questions a couple of people in the audience asked (though most of the questions were pretty straight-forward). I’m not even going to argue with you about the contention that all you guys do is “answer the phones” and that shouldn’t constitute steering. I’m pretty sure that the claims administration you do involves more than just answering phones.
But there are two questions I have got to ask, because they go to the heart of one of those differences between Safelite and the independents. You mentioned that you believe there should be a standard requiring drug testing and background checks for technicians. You said you don’t believe the AGRSS Standard goes far enough and should require this (never mind AGRSS is not a technician standard or certification, I could tell by your comments you didn’t get that and had been poorly briefed). It was also clear from your comments that this drug testing and background check idea is extremely important to your company. You mentioned that your techs are drug-tested. I expect there are background checks too.
So, Mr. Feeney, here’s my first question: If drug testing and background checks are so important to you, then why don’t you require them of the companies on your network? Why don’t you suggest to your insurance partner that they require them as part of the criteria they use? Why don’t you apply the same standards to the companies that you subcontract work to as you say you apply internally?
I gotta tell you, Mr. Feeney, I haven’t seen a whole lot of concern from Safelite about the companies that join your network. I have seen a ton of concern over making sure those companies accept the price you want to pay, but not much concern over the quality of that company or the technicians they have. If these background checks and drug testing are important, why don’t you require them? Please believe me, I am not asking this to be contrary. I would really like to know the answer because the only answer I can think of can’t possibly be the right one.
The only reason I can think of is that doing so would decrease the number of shops that could do your work. It would mean higher costs for Belron and higher prices for its customers. And I know that can’t be the reason because, as you said, safety and quality are more important than price.
And let’s talk about safety for a minute. You mentioned that you believe your own internal “certification” program is better than AGRSS. You emphasized how important quality is to you. So here’s my second question: If safety and quality are so important, then why don’t you require certification for those companies on your network? Heck, you could require any kind of certification you wanted—even your own—from the companies that do work for you.
If I didn’t know better, I’d think you were trying to keep the industry uneducated. It’s a lot easier—and a lot cheaper—to compete against guys when you can tell your insurance company you’re better than they are. You guys must laugh your heads off when the insurance companies buy it.
Or maybe you don’t require it because you know that a ton of people doing your work wouldn’t be able to any more and then you’d have some supply and demand issues, if you know what I mean; you’d have lots of jobs and no one to do them. That could be a threat to the whole network model.
The ability to use uneducated, “inferior” people for economic gain while refusing to educate them has long been the sign of an oppressor and the methods he uses to keep the oppressed in line. Surely you guys are better than this.
Belron is the biggest AG installer in the word. Say the word and thy will be done.
There’s a disconnect when you talk about the need for these things, yet you dole out a lot of work without any such requirements. Sorta like Congress exempting itself from following the laws it makes. It’s a pretty neat trick.
But that is just what it is: a trick.
Thank you again for your time. I look forward to hearing from you.
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