Volume 10, Issue 6 - November/December 2008

Steering

Three Practical Tips for Keeping Customers
by Les Shaver

If there’s no one thing that’s painful for Paul Heinauer, it’s talking to people who had hoped to get their automotive glass replacement work done at Glasspro, the chain of glass shops he owns in the Charleston, S.C., area, but were sent elsewhere by their insurance companies.

“I have had a few acquaintances who shared that they asked for us and the insurance companies told them we weren’t ‘on their list,’” he says. “It was so painful to hear that.”

To borrow a line from former president Bill Clinton, other independent glass shop owners can feel Heinauer’s pain. For more than a decade now, glass shops owners say they’ve seen third-party administrators (TPAs) using what they call coercion, intimidation and outright lies to push their hard-earned customers to shops favored and, sometimes owned, by those same TPAs. While the practice may be more refined than it was a decade ago, it still exists (the two main TPAs say it doesn’t happen in their offices, though).

Safelite, the largest retailer and a network based in Columbus, Ohio, a part of Belron US, is often accused of steering by shop owners. But spokesperson Jenny Cain says the company promotes customer choice. “Our customer service representatives are trained to honor a policyholder’s preference for a vehicle glass service provider,” Cain says. “All customer service representatives follow an appropriate script supplied to us by our various insurance clients. Safelite supports consumer choice in the repair or replacement of vehicle glass covered by the terms of their insurance policy.”

“All LYNX insurance processes promote consumer choice and preclude steering,” adds Chris Umble of LYNX. “We train, monitor, grade and compensate our associates on process adherence and customer satisfaction metrics; the process is designed to honor consumer choice.”

While the glass claims market may be somewhat split between these two companies, glass shop owners like Heinauer and Zoldowski still see steering often.

“Steering is alive and well,” says Dave Zoldowski, owner of Auto One in Brighton, Mich., and president of the Independent Glass Association (IGA).

While steering has become the most colloquial term used for this practice in the industry, many have noted that steering is more than an insurance company suggesting a customer use a particular shop: it’s a barrier to market access.

1) Make sure your brand is prominent in the marketplace—and that potential customers are asking for your shop. While Safelite is one company frequently accused of engaging in steering tactics, Belron’s (its parent company) chief executive officer Gary Lubner recently old AGRR magazine in an exclusive interview that one of the companies main areas of success has been its branding efforts (see related story in September/ October AGRR, page 48).

“If you’ve done your branding correctly, when that infrequent purchase happens, one thing should come to your mind,” Lubner said. “When you’re not, that means you’ve got to invest a significant amount of money, get a lot of coverage in the media, to make sure that when people do think of an automotive glass company to deal with, they’ll think of yours.”

While Lubner wasn’t speaking to ways to avoid steering, of course, this tactic applies to preventing this practice as well. You don’t have a problem with steering if people aren’t asking for you in the first place.

“They have to know your name and know 100 percent they want to use you,” says IGA board member Mike Russo, who also serves as controller for Thru-Way Auto Glass in Syracuse, N.Y. “Maybe they’ve used you before, saw your commercials or heard good things about you.”

Glass companies can get their names out there in that many ways, whether it’s pumping money into marketing, having a name that’s been around for awhile, or even, though highly controversial,  giving away free items.

“Most people are more concerned with getting their windshields fixed and less concerned about where they go,” Russo says. “That’s where the advertising campaigns come into place.”

And that’s where Heinauer’s focus lies. He continues to rely on his marketing, reputation and slogan “It’s Your Choice, Insist on Glasspro,” to draw customers. He uses radio, television and the Internet to get the word out. “We’re combating it [steering] by continuing to build our brand,” he says.

Donna Braden, vice president of Jack’s Glass in Allentown, Pa., relies on many methods to get the word out, including radio. “I think marketing is the most important of your business today,” she says. “We do radio advertising and I think that helps.”

Heinauer’s company also participates in numerous continuing education courses for insurance agents, which also helps to build the Glasspro brand in their eyes.

Braden also uses similar methods to get out in front of both insurers and customers. For instance, she’ll go to alocal business and cut a deal where she’ll do their employees’ windshields at a discount. She also does local Kiwanis and Rotary meetings and business- to-business trade shows, like a recent one sponsored by the Eastern Pennsylvania Business Journal. She came away with 20 windshield jobs.

“It takes a lot of diligence,” Braden says. “Meeting in person is effective. People love it when you show them and give them something they can keep.”

Even when she doesn’t get 20 windshield orders, these networking events can be effective to get in front of customers. “The customer isn’t always one with a broken windshield right now,” Braden says. “It’s someone that will have a broken windshield.”

Once Glasspro gets a job, its attempt to build its brand doesn’t end there.

“It’s imperative that we deliver excellence,” Heinauer says. “I don’t want to lose any orders. We can’t afford to lose any orders.”

So far, Heinauer’s strategy has been fairly successful.

Branding also has worked well for Grim. “I have a brand people request,” he says. “Our customers are still being steered into other shops, but the impact is far less when the customer has a reason to use you.”

Others have a similar advantage. “We have a reputation that exceeds anyone else in our area,” says Stuart Weatherman, owner of Diamond Auto Glass in Phoenix.

Thru-Way, which has built its name over 51 years in business in Western New York State, does cable advertisements, sponsors different functions in the community and still calls on insurance companies.

“We educate customers to call us first and the importance of having safe windshield installation,” Russo says. “I call on agents. We tell the agents an installation is a good reflection on them. It is educating the consumers and educating the agents.”

Once this branding has occurred and the customer has chosen you, it’s important to keep them, says Corey Hemperly of Windshield Doctor in Pocatello, Idaho. “We view each and every one of our customers as a relationship,” he says.

Windshield Doctor also offers customer loyalty programs. “We reward the customer who has been there for a long time,” Hemperly adds.

2) Be available.
A glass shop can have been a mainstay in a community for 50 years and pump money into advertising, but in this day and age, if there’s no one available to answer the phone or e-mail at night, over the weekends and even on holidays, none of this matters.

“We spend a lot of money on advertising each year and a large part of that budget is negated by the 800 number of the back of the insurance card,” Russo says.

Consumers want their issues handled right now.

“Companies spend tens of thousands of dollars marketing to consumers,” says Weatherford, who also owns a company called the American Auto Glass Alliance, formed to take after-hours calls glass shops and schedule appointments. “You can’t maximize your marketing dollars eight to ten hours a day. You have to schedule afterhours” (see sidebar on page 33).

That’s because the big glass companies can answer inquiries at anytime.

“[Being available 24/7] fights steering better than anything,” Weatherman says. “If someone calls at 6 p.m. and they get an answering machine, most likely they will go to the yellow pages and online and find someone else.” The key is to be available whenever the customer wants to book a job. That’s what the big companies are doing and that’s what consumers expect.

“Even though we’re a small company, we understand the value of 24/7,” Zoldowski says. “We’re embracing that. Customers will have the capability of booking an appointment for glass replacement.”

But leads don’t just come in over the phone anymore. They also come through the Internet. Zoldowski tried to stay on top of those. “Another way we avoid steering is that we follow up on Internet leads,” he says. “We try to do it instantly.”

If you can handle the phone calls and the Internet leads, the chances of claims falling through the cracks decreases significantly. “All of those kinds of tools prevent steering,” Zoldowski says. “Now you’re answering the job and getting the customer in for first notice of loss, which is key.”

3) Control the communication with the customer.
Opening up communication with the customer and getting them to you first is pivotal. While getting them to you has a lot to do with your branding techniques, once a customer makes contact with you, there’s certain information you must get. “We get the customer’s name and number right upfront,” Weatherford says. “That helps a lot as far as retaining them.”

Zoldowski’s goal is simple, in theory: get the customer into the shop. “They [glass shops] must get customers in the shop or on a third-party call, place a claim and get the vehicle scheduled at your shop,” he says. “That’s what has got to be done. If you leave it out there, you’ll lose the job.”

In addition, Zoldowski has had most of his CSRs participate in a CSR training course held a company called Molloy LLC, which encourages CSRs to form a relationship with customers when they call in, in an effort to encourage loyalty— along with repeat business and referrals, (see sidebar on page 33).

Russo has made strides in selling his company’s focus on safety and the windshield’s structural importance to the car. But he takes this a step further as well.

“We also tell [customers] we are very experienced in dealing with glass claims,” Russo says. “We try to get them to come to our shop and make phone call together. If they come to our shop or call us first, we’ll guide them through the claims process.”

Even after all of that, a glass shop can still lose the job if the customer has an issue and calls the TPA. “We have [the customer] call us if they have an issues or changes,” Zoldowski says. “A lot of the time, a customer will call [the glass claims] number, though, and Safelite comes out and takes a job away from us.”

At a certain point, most shops will have to deal with one central question: Do they tell the customer the full extent of the steering problem? By telling them, they’re often putting themselves at odds with the insurers (or those acting as agents of the insurers). That could be a problem.

“The insurance companies have a lot of credibility,” Heinauer warns.

Because of this, Heinauer has his CSRs focus on a positive message.

Others will fully educate the customer about steering, even if that message is critical of the insurer. Weatherford’s CSRs will say, “There are contracts with insurance companies and a national glass company that will try to influence you to use someone other than our shop.”

Russo even takes it a step further. “We tell them [the customer] that the call usually ends up at a call center where a CSR is trying to talk you into going to preferred shops,” he says.

The Future
While methods such as brand-building, offering 24/7 communication and controlling your customers’ interaction with a TPA do exist, some think the practice of steering—or barring access to the market—is here to stay.

“What it comes down to is fair access to the marketplace,” Russo says. “The customer goes out and buys insurance. The customer with the broken windshield should be entitled to make that decision unencumbered about where they take the vehicle to get it repaired. Insurance companies are there to pay the bill.”

Insurance Influence
Maybe glass shop owners are trying to be positive when they say that the industry that sends them millions of dollars of work each year doesn’t know that its networks steer customers.

“I don’t now if steering is as important to insurance companies as it is to call centers,” says Mike Russo, controller of Thru-Way Auto Glass in Syracuse, N.Y. “Most insurance companies want to be sure their customers are properly served. In my heart, I don’t think most know how badly their insureds are being treated when they go to make a glass claim.”

Knowing that insurers want to keep their customers happy in a very competitive insurance environment, Russo will send his customer to their agents when there’s a problem with the network.

“When the customer has a hard time, I tell them to call their agents or call the insurance companies directly,” he says. “Most of the time, someone from the insurance company calls and says, ‘Take care of the customer and send me the bill.’”

Heinauer knows insurers want to have the best experience possible with glass. “If it’s their number-one claim, you would want your customer to have the very best experience possible,” he says.

But he thinks they do have some idea about what’s happening in the market. “Some of the insurance companies know it goes on,” he says. “That’s painful that they think of us like that. It hurts your feelings.”

While representatives from State Farm and Allstate declined to comment on whether they believe the practice of steering exists, GEICO public relations coordinator Shannon Boyle says the company supports the right to choose—and informs its customers of this choice.

“GEICO associates inform GEICO customers that the customer is under no obligation to use any particular glass vendor,” she says. “It is entirely up to the customer to select the shop his or her choice. If, after being informed of that choice, the customer requests a referral, we will provide one.”

Likewise, Chris Umble says LYNX Services investigates claims of steering.

“Typically we find what gave the shop the impression of a problem and the issue becomes resolved,” he says. “I am happy to say that most shops know our process so well, and our reputation, that such questions are very rare.”

Like LYNX, Safelite spokesperson Jenny Cain says it makes sure its CSRs uphold a customer’s right to choose.

“Safelite invests heavily in associate training programs designed to ensure that such choice is assured when dealing with policyholders,” she says. “All calls to and from our contact center are recorded for training and quality assurance purposes.”

IGA Offers Two Affinity Programs to Combat Steering The Independent Glass Association (IGA) has teamed up with two different companies that offer services to combat steering: the American Auto Glass Aliance (AAGA) and the Molloy Institute LLC. The IGA has formed affinity relationships with both to offer its members reduced rates and some help with fighting steering.

The AAGA provides a 24/7 call center for independent shops.

“Basically, shops that become members [of the AAGA] at their choosing can forward their phones to us anytime, 24/7, once they’ve signed up,” says Stuart Weatherman, president of the AAGA. (Weatherman also owns his own auto glass business, Diamond Auto Glass in Phoenix, and has been working on designing and perfecting the service for the last two years.)

Those who sign up with AAGA receive a username and password, via which they can log in to what AAGA calls a personalized “dashboard” to customize how their own calls are answered, when/how jobs should be scheduled, etc. “When a call comes in for that particular glass shop, the dashboard pops up with that client’s information,” Weatherman says.

But, it’s more than an answering service.

“We’re an extension of the auto glass shop,” he adds, noting that the dashboard also provides instructions on how jobs should be scheduled. Likewise, all calls are recorded, and members who use the service can review all calls via the aforementioned online dashboard.

“You don’t just have the ability to personalize our customer service agents, but you also have the ability to critique them,” Weatherman says. “We want to make this bullet-proof, so that our glass shop clients trust us and know that we’re doing the job right … We want to make this a profit center for independent glass shops.”

Shops pay a monthly fee for the service, and then a fee per scheduled job. The benefits outweigh the costs, though, Weatherman says.

“This is going to save [shops] money. It’s going to give [them] more jobs and is going to give access to more jobs, and it will hopefully reduce [their] front-office costs,” he adds.

The AAGA also is equipped to conduct three-way calls with networks to schedule jobs as necessary.

IGA director of operations Patrick Smith says several IGA board members have tried the service themselves, leading the association to choose to form a direct relationship with the AAGA.

“They found it to be an outstanding addition to their business, and therefore directed that an affinity program be created,” Smith says, who adds that he expects this to help independent shop members be more competitive with larger chains. “Plus, the CSRs on the other end of the phone know and understand the auto glass business.”

“We feel that this new service, by extending a shop’s hours of operation, will increase the number of sales closed by participants, thereby increasing a shop’s revenue. It’s Business 101,” he says.

In addition, Molloy LLC offers a training program called “Language of Commitment™” to customer service representatives (CSRs) to teach them how to build relationships—and therefore business—with potential customers.

“The competitive advantage isn’t the glass. Consumers see all glass as being the same. The real competitive advantage is the eye-to-eye or word-to-word interaction between the CSR and the consumer,” says Dan Molloy, founder and president of the company.

Mel Auston, vice president and director of coaching, adds that CSRs often forget that every person they speak with on the phone is a potential customer. “And that means your company loses business because of this. Trust has to be established. You have to train CSRs in how to establish trust,” he said.

The training program involves a variety of steps, from mystery- shopping your company via phone to establish a benchmark, then numerous training and coaching activities, followed by more mystery shopping to track progress.

AGRR
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