Volume 8, Issue 5 - September/October 2006

Market Adjustments
Owner Keith Stevenson, KC’s Auto Glass, changes with conditions, but his technicians remain a strong building block in the business
By Les Shaver

In America, there’s always been a certain romanticism connected to the family business. The country was built by local business owners who passed their enterprises from generation to generation. They established stability and helped develop communities. But it didn’t last forever. The big corporations started coming—the Wal-Marts, TrueValues, Targets, Best Buys and so on. 

Sadly, auto glass shops that dot major cities, small towns, and farming communities all across the country are experiencing the same thing. Yes, it probably took a little longer. But the rise of networks and national auto glass chains and the resulting collaboration between the two made it inevitable that independent auto glass shops would be effected. And, it has hurt. Many shops have gone out of business. 

Still shop owners have found ways to change with the new conditions they face and continue to operate. One of these is Keith Stevenson, owner KC’s Auto Glass in Sterling, Va. His family has been in the industry more than 50 years; both his uncle and father owned shops. But the auto glass industry the elder Stevenson knew is not the same one he faces today. Competing in the pricey Washington, D.C. market is a daily struggle. To keep his business alive, Stevenson has made some tough choices. 

Early Introduction
Stevenson started working in auto glass for his uncle when he was 13. In high school, he worked for his father. After serving in the military, the automotive industry beckoned again. He spent 12 years doing body and glass work at Rosenthal Chevrolet, a large auto dealership in Northern Virginia. As with many in the automotive glass industry, he got the entrepreneurial itch and, in 1989, he started his own company. 

The first few years in business were successful. “We were well known in the area,” Stevenson explained. “Everybody called. They knew they would get a quality job and accurate time promises.”

Stevenson still says his glass shop does quality work and makes accurate promises. The problem is it’s doing less work at lower margins. 

While trying to maintain quality, and realizing the value of his technicians, Stevenson said there’s not a lot of profit in replacement auto glass. “My people have health insurance. They get paid well. Most of them have five to 15 years of experience. I have quality technicians. It’s gotten hard, very hard to stay in business. You can’t get paid what you should get paid for a job.”

Stuck in the Middle
Many conditions impact independent auto glass owners. As with many shop owners, Stevenson looks critically at networks and insurance companies. However, the factor he sees having the biggest influences on his ultimate survival is his competitors—companies both larger and smaller than KC’s. 

With competition from both ends, Stevenson tries to impress his customers with quality and safety.

“My technicians are up-to-date on everything,” Stevenson said. “Safety and quality have always been one of our standards, especially in the last ten years. We try to push safety and quality with everything.”

How does Stevenson feel about his technicians? “The good ones are very important. I want to do quality work and it takes good technicians to do that.”

And even with margins declining, Stevenson hasn’t skimped on new technology.

“We were one of the first to demo a tool designed to allow one technician to do two-man sets,” he pointed out. “We demo any tool to find out about it. If something is new, I will try it and see how it works. I will try different urethanes and any kind of new tool I can get my hands on that make our job easier.”

While Stevenson focuses on stressing safety and using technology to do a better job, he admits that the chorus of people promoting safe auto glass installations has yet to resonate with consumers the way he’d like it to. That makes it difficult to exploit the installation advantages Stevenson says he has over his competitors.

“I ask customers [who call in after calling other shops] if they were told about drive-away time, urethane, types of glass and the structural integrity of the vehicle,” Stevenson explained. “People don’t realize that the airbag and structural integrity is compromised if the glass is not put in right, doesn’t cure right or if the proper urethane isn’t used.”

But in some cases, it’s the customers’ impatience that leads glass shops to make false promises.

“You’re not driving through to get a hamburger,” Stevenson said. “A lot of vehicle owners are under that assumption. When it comes to replacement auto glass, they want to narrow it down to a two-hour window to get their car. You’re trying to convince them on the phone it’s not safe.”

Adjusting on the Fly
As Stevenson’s experience proves, when customers are impatient, selling safety can be ineffective. So, as his margins eroded and customers moved to competitors, both big and small, he’s had to make some tough calls to keep his business afloat.
The toughest decision was to downsize. He trimmed the space in his main location in Sterling. Next came the toughest trimming—his employees. He didn’t have to fire anyone though. Instead he didn’t replace people who left. Now he has nine employees, down from a high of 17.

“I had 15 technicians at one time,” Stevenson said. “We downsized. We were losing way too much money. We couldn’t even cover our overhead of those technicians.”

To help his business, Stevenson decided to add to his product line. 

“We’re going into all kinds of glass,” Stevenson said. “We have auto glass where we want it and we’re going into other types of flat glass including storefronts, curtainwall, mirror and shower doors. Now auto glass shops have to do everything.”

Also, Stevenson decided to stop the bleeding by no longer matching his competitors’ pricing.

“We decided to hold the line on pricing,” Stevenson said. “After that decision was made, we raised labor rates for removal and reinstallations because we just couldn’t afford to do it at the prices we were getting. Here I am going out and saving a piece of glass that costs $700 and they won’t pay $100 to do it. It’s a lot of time and effort to take glass out without damaging it and putting it back in.”

While some customers fled, others understood Stevenson’s situation.

“I lost a few body shop and dealer accounts,” Stevenson said. “It wasn’t a profitable situation. Some came back and some don’t care. I’ve kept quite a few who do care.”

With some customers wavering on Stevenson’s decision to hold the line on prices, he has serious concerns about his future. But he’s still going to fight to stay in the business of his father and uncle.

“I keep waiting for a light at the tunnel,” Stevenson said. “I’ve always liked the work.”

AGRR
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No reproduction of any type without expressed written permission.