July/August  2001

The State of Repair
The Repair Industry Pushed Toward 30
by Leslie Shaver

 

Windshield repair has now been available for more than 25 years, and the industry is still wondering what the future holds. It’s been more than 25 years since a small army of men and women turned the glass industry on its head when they took their primitive windshield repair kits and descended upon the car dealerships and insurance companies of America.

The message they were carrying was a revolutionary one to some in the industry. Instead of replacing a broken or cracked windshield, they were offering to fix that crack or break—making it unnecessary for the owner of the windshield to buy a new piece of glass.

This eventually changed the way insurance companies and existing auto glass replacement shops did business. Insurance companies began to look at repair as a way to save money, while auto glass shops started to add repair to the services they offered.

“Windshield repair was one the most significant events in the auto glass replacement industry in the last two decades,” said Dick Karbon, executive vice president of Klein-Dickert Co., an auto glass repair and replacement chain based in Green Bay, Wis.

While the industry has matured into what National Windshield Repair Association (NWRA) president Dave Taylor calls an “American institution,” most average Americans have absolutely no idea that glass can be repaired, according to many of the repair technicians interviewed for this article.

This presents the industry with one of the biggest challenges as it approaches 30—how to educate the American public that windshields can be repaired if the break is discovered in time.

While the industry grapples with this, it still must court its long-time business partners—the insurance industry, fleets and car dealerships. This is especially difficult since many technicians have become convinced that insurance companies and their network partners have slacked off the amount of repairs they dole out and that the price for doing a repair at fleets and dealerships barely makes that worth their time.

This month AGRR will address these issues in the first installment of a two-part series looking at the repair industry—where it is now and where it can go in the future. This month we will look at the major repair markets—fleet and dealership, insurance and of course, the off-the-street consumer.

The Pot at the End of the Rainbow
Mel Neulander of Mr. Chips Windshield Repair in Cliffside Park, N.J., is a relative newcomer to the industry. He started his repair business, which also includes chip and crack repair, scratch removal and vehicle identification number etching, after being an art dealer in the trendy SoHo section of New York City.

He was first attracted to the industry when he discovered that many insurance companies deduct waivers when windshields are repaired. He reasoned that this would make it difficult for any customer to turn down a repair.

“How can you not close a sale?” he asked. “You would have to be an idiot.”

With this impetus, Neulander decided to jump into the repair industry. While he has found it profitable, he knows the business he is getting is just the tip of the iceberg.

He estimates that 70 to 80 percent of the windshields replaced could have been repaired if they were taken to a repair facility earlier. However, he says most customers don’t know that they have repair as an option so they wait around until the break gets too big to handle—much like a cavity grows until a root canal is needed.

The only way the break will stop in time is if the customer knows that he can get it repaired. 
“Our industry has done little to get the word out,” Neulander said. “I am depressed over it.”

Allen McCracken, owner of Inspector’s Auto Appearance, a repair/replacement shop in Flagstaff, Ariz., agrees. He estimates that 80 percent of the windshields he fixes are for rock chips that could have been repaired if he had caught them earlier. 

“People do not come in [with cracked windshields] on time,” he said. “We have barely made a dent in educating the public.”

Manufacturer’s representatives also agree. “The industry has done a poor job of promoting itself,” said Dave Shores, vice president of Glas-Weld Systems in Bend, Ore. “We need to take advantage of every media opportunity available.”

Many replacement companies view repair as something that is difficult with which to make a profit, Karbon said. While he says that his company faithfully does repair, about 25 percent of his total business, many in the repair industry think replacement companies will unnecessarily replace some windshields that could be repaired.

Neulander thinks part of the problem is that the repair-only industry is mainly comprised of single practitioners who “don’t have the money for advertising and public relations.”

But there are ways to bring in new customers. One option is developing a market through some sort of cooperative effort, such as a national advertising campaign in conjunction with the NWRA.

“Maybe using money to place some national ads would help,” Neulander said.

The association did have a public relations firm for a short period of time, said Taylor, who is also secretary/treasurer of Cindy Rowe Auto Glass in Harrisburg, Pa.

“We had some success,” he said. “But we did not have the funding to really go after it.”
Safelite is the only company to really put together a strong marketing effort, but many in the industry say it failed to draw more customers.

Often, consumers don’t even realize windshield repair is available and opt to have it replaced instead. Often, consumers don’t even realize windshield repair is available and opt to have it replaced instead.

“Safelite made a strong attempt, but they had other significant problems,” said one industry insider, who was referring to the company’s bankruptcy last year.

An anonymous source who was once involved with Safelite’s repair program disagreed, saying that the program was successful “to some extent,” but it dried up because “cash got pretty short.”

He added that both the company’s repair-replacement ratio and its repair revenue increased, proving the program did reap some profits.

Even if the industry does not try to promote itself nationally, Neulander is trying to promote his company in New York, the largest metro area in the United States. He plans to kick off a morning advertising campaign in the expensive New York market very soon.

“It’s formidable and I may not make the money back at the end,” he said. “But my industry is me. I have to do what I can to make myself recognizable.”

And if he makes himself recognizable, he may be able to achieve his ultimate goal.

“I want to be a brand name,” he said.

McCracken thinks there are other ways for a repair technician to make a dent in his market. One thing he does is an annual event where he repairs windshields for $10 and donates the money to charity.

“This brings in people who would not normally come,” he said.

And he takes advantage of the opportunity to meet new customers.

“We talk to the customers while we are doing repairs to educate them about the process,” he said.
As the industry has grown, a variety of new repair techniques have become available. As the industry has grown, a variety of new repair techniques have become available. As the industry has grown, a variety of new repair techniques have become available.

Scratch removal systems, along with new repair systems, are displayed at the Spring Auto Glass Expo in Las Vegas.
Networks
Of course, if technicians can’t get business from advertising, they can always rely on networks, right?

Well, most technicians interviewed for this article said they cannot depend on networks for business. 

“It is important for a store owner to educate the public because insurance companies will not send you the business,” McCracken said.

Even some networks admit that their repair business is declining.

“Once the insurance industry pushed repair, but they backed off and pushed items other than glass,” said John Kellman, vice president of Globe Amerada Glass Co., a network and retail chain based in Chicago. “They met their goals. Then they walked away and did other things. Now they don’t push repair as hard.”

But that’s not to say the industry is completely dead with networks. 

“Insurance companies will continue to push repair because it saves them money,” Shores said. 

Kellman agreed. “My company pushes repair because it keeps us in the good graces of insurance companies,” he said. 

While insurance companies will always do repair there are some questions in the industry about the standards insurance and networks set for each repair and how these benchmarks will affect the overall number of repairs in the future.

One industry insider, who declined to be identified, said the number of repairs that technicians get from networks is lower than it could be because standards are set based on what the average technician can do—not the skilled technician. This means that some tougher jobs, that only a more skilled technician could do, automatically become replacements because networks have determined that these breaks couldn’t be fixed by most of the technicians in their database.

“If the network has people who can only do a limited number of repairs, it limits the overall number of repairs being done,” the insider said.

In the long run, he thinks this could hurt the quality of repairs that are being done.

“This has taken the incentive away from people who can do complicated breaks,” he said.

The most important repercussion, however, could be that these standards discriminate against the repair-only shop. “Most auto glass replacement shops do not make the investment equipment and training that repair-only technicians do,” he said.

Fleets and Dealers
While repair dealers say it is difficult for them to get consistent network business and it can be even harder for them get customers off the street with a shoestring advertising budget, there is always the fleet and dealership business. 

While Taylor estimates that it only accounts for about 33 percent of business, fleets and dealerships are still the lifeblood of a lot of repair businesses.

Most of the technicians who shy away from them cite price. Because technicians usually get more volume from fleets and dealerships, they are inclined to lower their price per repair.

“I know guys who make their living that way, but they pay so little,” said Walt Gorman, owner of A-1 Windshield Repair Inc. in Seekonk, Mass., who says some technicians get only about $25 per windshield. “If you lower it for one person, you have to lower it for everybody.”

Another major issue with fleets and dealerships is that the fate of the repair technician closely mirrors that of the business he is servicing. If Federal Express is losing business, their trucks won’t be on the road as much and they won’t be exposed to as many of the rocks and pebbles that can cause cracks in windshields.

Car sales may be even more telling. If a car dealer is not moving vehicles, he is a lot less likely to need repairs, Taylor said.

“The number of cars moving across a lot has a direct correlation to the repairs being done because there is more potential business,” Taylor said. “A windshield does not get damaged sitting on a lot.”

Conversely, if the dealership is doing brisk business it will need more repairs.

“Anything that brings used cars on a dealer lot is good news for the repair industry,” Taylor said.

Despite their dependence on the success of other businesses and the lower cost per unit, Taylor says technicians who focus on fleets will always have a market. But he also says the dealer/fleet market has reached maturity, unless there is a dramatic jump in car sales. 

“Car dealers and fleet owners are already aware of repair,” he said. 

McCracken does do some fleet work, including one account with Federal Express. He says these can be profitable, but they can also be headaches.

“The person has to service it [the fleet account] on a regular basis,” he said. “Sometimes you go and check the vehicles and you don’t get anything.”

However, McCracken thinks the average technician can capitalize on this business if he stays diligent. 

If the technician keeps going back to the lot each week, eventually there will be cars to repair, McCracken said. 

“You can’t get discouraged,” he said.

Next Month
In the next issue, we will take another look inside the repair industry to see how it is affected by the rocky economy, what formal education could mean and how technicians are diversifying into other areas, such as scratch removal. 

Leslie Shaver is a contributing editor for AGRR magazine.

AGRR

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