Volume 11, Issue 6 - November/December 2009

feature

Belron Makes a Boom
New Acquisitions, Television Ad Campaign Rock Industry
by Penny Stacey

It’s not uncommon for Belron US to generate news; the company is the largest auto glass retail provider in the United States, and its parent company, Belron, is the largest in the world. But this fall, the company has made a mounted effort not only to increase its brand awareness through advertising, but also to grow further with its latest acquisitions of not only more retail locations, but also an add-on to its claims administration arm, Safelite Solutions.

Onward to Iowa
It had been rumored for more than a year that Belron US had its sights set on Iowa Glass Distributors (IGD) when the company announced in late September that it had in fact agreed to purchase not only the company’s repair and replacement retail locations, but also its claims division, Alliance Claims.

This purchase, which closed on September 30, included all 80 of the IGD’s retail businesses, including including Auto Glass Center Inc., Auto Glass Center of Kansas Inc., Arnie’s Auto Glass Center, Glass Installations LLC (also known as Midwest Auto Glass Center), JC’s Glass LLC, Globe of Iowa LLC. This of course drives Belron’s nationwide locations even higher—to 476. (Tool parts supplier Precision Replacement Parts, which also is owned by Iowa Glass, was excluded from the sale.)

Belron US chief executive officer Tom Feeney told AGRR magazine/glassBYTEs.com™ that the retail facilities would be a complement to its own long line of acquisitions—including Safelite Auto Glass, Cindy Rowe Auto Glass, Diamond Glass and more.

“We’ve always looked at the industry and have tried to identify companies that are complementary to us and a strong brand, and that have the same kind of focus on serving people and customers very well,” Feeney said.

For the retail locations, Feeney said the company will use a similar co-branding approach as it has with other acquisitions for most markets.

“There will be markets where Auto Glass Center will be defined as the power brand and will sit in front of the Safelite brand,” he said.

Feeney also noted that there’s not a lot of overlap between the two companies.

“We operate in very different markets,” he said, noting in a company statement that IGD has a strong presence primarily in the Midwest and Western regions of the United States.

At the time of the interview, he also said no possible store closures had been identified.

But, could this continued acquisition model be viewed as a growing (or impending) monopoly? Feeney says it is not.

“We’re a far cry from a monopoly and those words don’t even enter our mouths,” he said. “We work every day to do business for the customer we serve, and we’ll continue to grow our business organically and through strategic acquisitions like this one.”

Claiming Claims
While adding retail locations is nothing new for Belron US, with the IGD asset purchase it also acquired its glass claims administration arm, Alliance Claims Inc. This is the first major acquisition it has made of another company’s claims administration team—and an acquisition that was attractive to the company for obvious reasons, Feeney says.

“They serve the industry just like us and that’s attractive to us,” he said. “They understand our model and they’ve been very successful in the first-notice-of-loss business as well as providing claims solutions to the insurance industry as well.”

Feeney adds, “All of this aligns well with our strategic direction.”

Alliance Claims Solutions was founded in 1989 and provides 24/7 glass claims processing services for insurers.

Television Time
Just after the IGD purchase was announced, Belron US’s retail division, Safelite Auto Glass, started making even larger waves in the industry when it launched a two-week television ad campaign featuring company technician Erik Schumacher. The commercial, which ran heavily on ten major networks including CBS, NBC, TNT, TBS and USA, depicts Des Moines, Iowa-based

Schumacher driving a vehicle with a tiny chip; as he describes the chip, and says it’s made up of a thousand microcracks, he hits a speed bump on the road and the chip becomes a longer crack.
Schumacher then explains the importance of repairing a windshield before it cracks further.

Though the “Safelite repair, Safelite replace” jingle goes along with much of the company’s recent radio ad campaigns, and is aligned with Belron’s worldwide ad campaign, the volume of the ads is what has really shook the industry. The company estimated, prior to the launch of the campaign, that 75 percent of adults would see the ad 12 times during the two-week run.

Industry Reacts
At press time, the ad campaign had been running for just under a week, and had already created a bit of frenzy—but possibly with an unexpected result.

Though early in the campaign Belron US spokesperson Jenny Cain advised the company was “very pleased with the initial results,” some other industry players have been as well.

“We’ve been getting an influx of chip repair,” says Clyde Stevens, owner of Visions Glass in Perham, Minn.

“They certainly have been a boon for our business,” agrees Mike Russo of Thru-Way Glass in Syracuse, N.Y. “Our windshield repair service has definitely seen a spike.”

It’s also raised an awareness of repair—and made consumers start to wonder about this possible service.

Ian Graham of Windshield Solutions in Roanoke, Va., points out that the ads also are helping to remind consumers that their auto glass, in general, is important.

“I believe anything that gets ’auto glass’ into the mind of the general public is of good use,” he says. “Especially to the other well marketed companies in the area ... Chances are that if the customer takes the time to look around they will find you and you will at least get a shot at the job.”


“I believe anything that gets ’auto glass’ into the mind of the general public is of good use.”
—Ian Graham, Windshield Solutions


The Future
At press time, the television ad campaign seemed to outweigh any impact yet to be seen from the IGD purchase, but the company was still in the process of developing an integration plan. This integration was being led by John Sadler, vice president, supply chain development and business integration. In the meantime, Feeney said it will be business as usual.

“For now we want everyone to continue to do what they do everyday … provide the best possible service to our customers,” said Feeney shortly after the sale closed. “Until we formalize action plans related to the integration of the businesses, our people will continue to work as they do today and report to the same individuals.”

As far as branding, the company will use a similar approach to its other recent acquisitions, including Cindy Rowe Auto Glass and Diamond Glass.

“There will be markets where Auto Glass Center will be defined as the power brand and will sit in front of the Safelite brand,” he said.

As for the television ads, it’s still unknown what the future may hold. Cain says the company planned to re-evaluate after the two-week run whether to continue the ads in the future—but it sounds likely we could be seeing more of Schumacher (or at least of the “Safelite repair, Safelite replace” jingles).

“Once we analyze the results and if it works as we expect it to, TV advertising will be big part of our 2010 plan,” Cain says.

Penny Stacey is the editor of AGRR magazine.


 

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