In my new position as executive director of the Independent Glass Association (IGA), I have had the tremendous opportunity to take the pulse of the membership, both past and present, and industry suppliers. I can say that it has been interesting, to say the least.
In my discussions with the membership, most of the current members say they support the IGA and welcome the new direction. One said to me, “You know that over the years, the shops were focused on doing battle with the insurance companies and their TPA partners, but we never really looked at what it was doing to our customers.” I could not agree more. When an insurer sends out a directive to shops instructing that they will only pay for the least expensive glass, what message is that sending about their concern for the safety of their policyholders? Or when an insurer pays a low rate per NAGS hour? What message is that sending about their concern for the safety of their policyholders? I have said it before and I will say it again, consumer safety is being compromised under the current scenario. And believe me when I say that legislators and attorneys general are asking a very specific question: how are consumers being harmed? To that I reply that information is being collected.
I also have spoken with former members, who remember the lawsuit and thought that the IGA was too radical. In hindsight, the lawsuit was divisive, but hindsight is 20/20. And how would those same people feel if the IGA had been victorious? However, those days are behind us and, for the past few years, the IGA has taken on a new direction. The IGA is a kinder and gentler association whose primary focus is to build bridges on the path to success. Our mission remains clear. And we would like everyone who has a stake in the industry to join us.
In my discussions with industry suppliers, I have told them that I would like them to partner with us and do more to support the independents. I am of the opinion that if the independent shops continue to close at the rate that they are, suppliers will continue to lose market share. I believe that it is in the best interests of the suppliers to support the IGA.
On another subject, during my calls, the association has been accused of having a fixation on attacking Safelite. To that, my reply has been that the association would be derelict in its duty to its membership to allow any blatant move by Safelite, LYNX or anyone to take business intended for our members and to direct it to some other shop to go unchallenged. Believe me, I have heard some tape recordings and seen some reports that will open anyone’s eyes. To the insurance companies that allow customer service representatives (CSRs) from any third-party administrator to make the claims reporting process much longer than it should be and confrontational, I say, shame on you. The association will challenge any party that applies any practice that will take business away from our members, regardless of who the perpetrator might be.
When I was working in the business, I had the opportunity to talk to the managers of the national glass program of three or four of the top insurers and every one of them conceded that the rates billed by my employer were not “out of line.” So I ask insurers, why place the relationship with your policyholders in jeopardy for a few dollars? It does not make the least bit of sense to me. As an example, a member of the New York State Legislature was in the shop of my former employer calling in the claim for his windshield replacement. He must have been on the phone 15 to 20 minutes on the three-way call with the TPA. After he hung up the phone, he asked, “Is this what every customer must go through when trying to get their car serviced?” To this I replied, “You do not know the half of it.”
Insurers sourcing out the claims reporting process to third-party administrators does not have to cease. However, it would be in the best interests of your companies and your policyholders to cleanse the process of third-party administrators who are trying to serve two masters. And, based on my experience with the process, you are not the primary beneficiary of this relationship. If you were, I would find it hard to believe that you would allow your policyholders to be subjected to such abuse when the cost of retaining that customer must far outweigh any additional cost of repairing or replacing a windshield. So just what value do you get from a relationship that may be placing your relationship with your customers in jeopardy? Is it not your goal to retain your policyholders?
To the members, past and present and prospective, and to our trading partners, the IGA wants to hear from you. What is it specifically that you would like to get out of your membership in the IGA? Your membership should not be passive. Rather it should be interactive. I can assure you, I will listen and I will react. If there is something specific that the IGA can do for you or you feel should not be doing, I want to hear from you. It is together that we can accomplish much. United, we can make a difference—and we will make a difference!
Wednesday, June 30, 2010
Wednesday, June 16, 2010
CSRs and Scripts: All in the Name of Education?
For quite some time now, the industry has been told that insurers approve the scripts used by the customer service representatives employed by third-party administrators (TPAs). Those same people who justify these scripts also advise that the purpose of the scripts is to educate the consumers about “choice.” I have heard comments like, “yes, in the end, we honor the customer’s right to choose, but our clients want us to educate the customers about all of their options.”
However, at what point does education cross the line to become harassment or infringement on a consumer’s right to choose a repair shop? The Independent Glass Association has been collecting data on these exchanges between CSRs, glass shops and the customers, and I have had the opportunity to read and even listen to them. If what I have been seeing and hearing to this point can be labeled education, then I am the best auto glass technician on the planet and I have never installed a windshield.
Let me give you one example. Recently, I had the opportunity to listen to an audio tape in which I actually could not believe what I was hearing. In the conversation, after the CSR advised all of the parties on the line what the insurer would be willing to pay for the service, after a quick calculation, the shop owner advised the CSR that his invoice would be less than what the insurer was offering to pay. With the pricing issue no longer a factor, the CSR proceeded to continue with the reading of the script, including the threat to the customer that she might incur out-of-pocket expenses. At that point, the shop owner interjected with a comeback to the effect of, “Excuse me, but did you hear what I just said? I told you that I would be billing less than what the insurance company is willing to pay.” The CSR proceeded to say that she must continue to read her script. The immediate question that comes to mind is this: how often does this go on?
I believe that insurance companies should have the right to educate their policyholders, but that right should be an exclusive right between the insurance company and its policyholder, not passed on to a third-party who has everything to gain by stealing that business for personal gain. Any one of us on the other end of the TPA call knows that the scripts and the tactics contained therein go far beyond anything required to educate the consumer. The example above is proof of that. And if you truly want to educate the consumer, educate them about safe drive-away times, the brand/quality of the glass being installed and emphasize that most state laws give them the right to choose the repair shop of their choice. That’s right, educate them about the importance of proper and safe windshield installation. Now that’s a brilliant idea.
What has always amazed me was the line, “We have a customer on the line who has requested your shop, but before I bring him on, we need to discuss pricing.” Let me make sure that I have this down. The customer called the TPA wanting to use my shop as long as the price is acceptable to the insurance company. In our example above, without a doubt the price was acceptable to the client’s insurance company, but the scripting procedures are written in such a way that the CSR should continue until the outcome of the conversation is acceptable to the TPA, using every opportunity to secure that business. After all, every consumer we talk to is naive. In our example, the insurance company had what it wanted, but the TPA was not getting what it wanted. I think that any rational person would conclude that steering (I personally prefer the word stealing) does indeed exist.
However, at what point does education cross the line to become harassment or infringement on a consumer’s right to choose a repair shop? The Independent Glass Association has been collecting data on these exchanges between CSRs, glass shops and the customers, and I have had the opportunity to read and even listen to them. If what I have been seeing and hearing to this point can be labeled education, then I am the best auto glass technician on the planet and I have never installed a windshield.
Let me give you one example. Recently, I had the opportunity to listen to an audio tape in which I actually could not believe what I was hearing. In the conversation, after the CSR advised all of the parties on the line what the insurer would be willing to pay for the service, after a quick calculation, the shop owner advised the CSR that his invoice would be less than what the insurer was offering to pay. With the pricing issue no longer a factor, the CSR proceeded to continue with the reading of the script, including the threat to the customer that she might incur out-of-pocket expenses. At that point, the shop owner interjected with a comeback to the effect of, “Excuse me, but did you hear what I just said? I told you that I would be billing less than what the insurance company is willing to pay.” The CSR proceeded to say that she must continue to read her script. The immediate question that comes to mind is this: how often does this go on?
I believe that insurance companies should have the right to educate their policyholders, but that right should be an exclusive right between the insurance company and its policyholder, not passed on to a third-party who has everything to gain by stealing that business for personal gain. Any one of us on the other end of the TPA call knows that the scripts and the tactics contained therein go far beyond anything required to educate the consumer. The example above is proof of that. And if you truly want to educate the consumer, educate them about safe drive-away times, the brand/quality of the glass being installed and emphasize that most state laws give them the right to choose the repair shop of their choice. That’s right, educate them about the importance of proper and safe windshield installation. Now that’s a brilliant idea.
What has always amazed me was the line, “We have a customer on the line who has requested your shop, but before I bring him on, we need to discuss pricing.” Let me make sure that I have this down. The customer called the TPA wanting to use my shop as long as the price is acceptable to the insurance company. In our example above, without a doubt the price was acceptable to the client’s insurance company, but the scripting procedures are written in such a way that the CSR should continue until the outcome of the conversation is acceptable to the TPA, using every opportunity to secure that business. After all, every consumer we talk to is naive. In our example, the insurance company had what it wanted, but the TPA was not getting what it wanted. I think that any rational person would conclude that steering (I personally prefer the word stealing) does indeed exist.
Wednesday, June 2, 2010
The Ballad of the Forgotten Consumer
Here it is my one of my favorite seasons of the year, spring. With the arrival of spring, we draw closer to summer and warmer weather, outdoor activities and another NAGS price adjustment. Ah yes, the May calculator and another average decrease in the list prices contained therein. Does this finally convince us that NAGS list pricing is about as useful to the auto glass repair and replacement (AGRR) industry as an abacus is in the present-day math classroom?
Many of you may have seen my rants before about NAGS pricing. I have written many times about how discounts off the NAGS list price at 65 percent off justified the 2005 NAGS rebalancing farce. Yes, I label it a farce as we presently witness discounts approaching those same levels. Is it time for another rebalancing act? Is the NAGS standardized pricing still relevant?
NAGS list prices impact the entire industry. To some, like the insurance industry, NAGS list prices have a positive impact. Like they say how some foods go right to the behind, to insurers, NAGS price adjustments go right to the bottom line (but in this case positive). To others, like the independent glass shops, OEM manufacturers and OEM distributors, they have a negative impact. And there isn’t a one of us who should passively accept this and move on.
But most importantly, in an industry that tries to focus on consumer safety, is such a standardized pricing system counter to these goals? When insurers offer ridiculously low rates per “NAGS Hour,” this is a good indication that insurers lack confidence in the published rates and, therefore, encourage shops to cut corners. And when the profit margin on glass continues to slide, there is no question that the quality of the glass being installed in vehicles is going to slide. Therefore, I cannot help but feel that the NAGS factor in the AGRR industry puts consumers in harms way.
Let’s face it. The time for NAGS to come clean has passed. It no longer matters how they arrive at their list prices. Who audits these prices? Is it comparable to boasting that you have the best installation standards in the industry and not be willing to prove that claim with an independent third-party?
To publish information that has such a dramatic impact on an industry, especially an industry dealing directly with consumer safety, credibility must be the watch word. Independents, you must act as independents. Educate your customers and take care of them using quality glass and the best installation standards. Then price accordingly on a basis of honesty and integrity. Take care of the customer and the rest will all fall into place.
Many of you may have seen my rants before about NAGS pricing. I have written many times about how discounts off the NAGS list price at 65 percent off justified the 2005 NAGS rebalancing farce. Yes, I label it a farce as we presently witness discounts approaching those same levels. Is it time for another rebalancing act? Is the NAGS standardized pricing still relevant?
NAGS list prices impact the entire industry. To some, like the insurance industry, NAGS list prices have a positive impact. Like they say how some foods go right to the behind, to insurers, NAGS price adjustments go right to the bottom line (but in this case positive). To others, like the independent glass shops, OEM manufacturers and OEM distributors, they have a negative impact. And there isn’t a one of us who should passively accept this and move on.
But most importantly, in an industry that tries to focus on consumer safety, is such a standardized pricing system counter to these goals? When insurers offer ridiculously low rates per “NAGS Hour,” this is a good indication that insurers lack confidence in the published rates and, therefore, encourage shops to cut corners. And when the profit margin on glass continues to slide, there is no question that the quality of the glass being installed in vehicles is going to slide. Therefore, I cannot help but feel that the NAGS factor in the AGRR industry puts consumers in harms way.
Let’s face it. The time for NAGS to come clean has passed. It no longer matters how they arrive at their list prices. Who audits these prices? Is it comparable to boasting that you have the best installation standards in the industry and not be willing to prove that claim with an independent third-party?
To publish information that has such a dramatic impact on an industry, especially an industry dealing directly with consumer safety, credibility must be the watch word. Independents, you must act as independents. Educate your customers and take care of them using quality glass and the best installation standards. Then price accordingly on a basis of honesty and integrity. Take care of the customer and the rest will all fall into place.
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