Volume 8,  Issue 4                         July/August  2006

Field of Vision
f r o m   t h e   e d i t o r
ccumpston@glass.com

Twin Visions
by Charles Cumpston

An extraordinary thing happened to me the week of May 22. 

That Monday, I visited Diamond Triumph Auto Glass at its headquarters in Kingston, Pa., to interview its new chief executive officer, Doug Boyle, and president Karen Christopher.

In a wide ranging discussion, which starts on page 24, one of the main points they made was that the company sees quality and service as important in the marketplace and that they want the company be paid properly for the work it delivers. 

Fair enough. There has been a call for this in the industry for some time and it has intensified as insurance companies have continued to put the squeeze on prices while supply costs for shops has increased.

Then, on Wednesday, May 24, I was in Tucson for the National Auto Glass Conference. Its keynote speaker, Belron CEO Gary Lubner, stressed that price is not the only consideration in the market and that his company is going to operate on the principle of offering quality and service and getting paid a reasonable rate for what it does (see page 40).

I would have thought what I had heard in Pennsylvania on Monday would have a strong effect on our industry. When I heard almost the same sentiments on Wednesday in Tucson, I knew the industry was hearing the future. If two of the largest companies in our industry are saying that price is not going to be the driver in the market, but that quality and service are, then I would be willing to bet that it is going to happen.

Now, before everyone starts celebrating, let me give you my corollary to this. Price is only going to be dislodged as the deciding factor when the cash price to consumers is in line with the price the insurance companies pay. This means that the market share battle is going to continue to focus on price until those companies left in the market are giving the insurance companies the same price they give cash customers. 

There is no way the insurance companies are going to pay prices significantly higher than those cash customers are paying. Yes, quality and service are important to most insurance companies and they will pay some premium to get those attributes for their policyholders, but they are not going to pay a wide differential from what those same policyholders can get if they pay cash.

For those independent shops that are well managed and market effectively, there is a lot of good news here. As Doug Boyle says there are always going to be niches in the market for good, well-run small operations. Both Boyle and Lubner spoke about branding for their companies, and this concept is just as important for the small independent shop. It has to have its own customer base. Thatís why marketing is so important.

The next year or so may not be any prettier in this industry than the last one has, but if youíre looking for the light at the end of the tunnel, I think Doug Boyle and Gary Lubner just turned their flashlights on. 


AGRR
© Copyright 2006 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.