In Part 1 of my “Back to Basics” series, we defined marketing as: “Everything you do to bring a customer to the point of sale.” Marketing brings potential customers to the front counter, where they say, “I need an estimate.” Selling begins when the potential customer walks through our doors.
Sales and marketing are frequently viewed together as one department or function. The reality is that they’re separate but interrelated activities. Marketing brings the potential customer in, while selling puts the signature on the repair order.
Sales: No. 1 Activity
In the collision repair center, there is no more important activity than selling. Think about it: Selling is the only activity that brings revenue into the business. Everything else sends money out.
While selling is critically important to a business, many of us don’t have a favorable view of salespeople. When we think of a salesperson, we think of a pushy used car salesman. In the collision repair industry, we proudly call ourselves “estimators” and don’t want to think about the sales portion of our roles.
In reality, we don’t get paid to write estimates we get paid to write repair orders and repair collision-damaged vehicles. The process of converting the potential customer into a customer is a selling function.
To manage anything, you must measure it. Sales effectiveness is measured through close ratio or “batting average.” A close ratio represents the percentage of sales opportunities that are converted to repair orders. Many simply divide the number of repair orders by the number of estimates. For shops using this formula, average close ratios range from 60 to 70 percent.
However, I suggest tracking close ratio by dividing the number of repair orders by “sales opportunities” as this provides a more accurate number:
Close Ratio = Repair Orders / Sales Opportunities x 100
This is a better method because we don’t always write an estimate. For example, a customer arrives who hasn’t been to the insurance drive-in estimating center yet, and we suggest that she get the insurance estimate and come back. That’s a sales opportunity. If she doesn’t come back, it’s a lost sales opportunity. For shops using this particular formula, average close ratios range from 55 to 65 percent.
The most important concept is to know your close ratio. Track it by estimator and by source (DRP and non-DRP). Then, no matter how you measure it, improve that number!
Be wary of the close ratio number generated through your management system. If your estimators don’t transfer every estimate into the system, your close ratio is likely overstated. All estimates and sales opportunities need to be transferred into the management system to obtain an accurate number.
The impact of increasing close ratio is impressive. Let’s say an average estimator writes 100 estimates per month and converts 60 of them into repair orders that average $2,000 each. That results in a close ratio of 60 percent (60 ROs / 100 estimates x 100). That’s $120,000 per month in sales (60 ROs x $2,000 per RO)!
If that estimator could increase his close ratio to 70 percent, he would convert 70 of those 100 estimates into repair orders. With an average RO of $2,000, that’s $140,000 in sales (70 ROs x $2,000 per RO). That’s a $20,000 increase in monthly sales, or $240,000 per year, without writing one additional estimate!
There are five steps to selling collision repair: Qualification, Presentation, Handle Objections, Close and Deliver. Let’s look at each individually:
Qualification: Asking the potential customer a series of questions before looking at their vehicle provides the opportunity to discover her individual needs as well as how she was referred to the shop.
Qualification provides customer information such as best phone numbers, preferred contact method, requested frequency of status updates and accident detail information. More importantly, qualification provides the opportunity to begin to demonstrate “caring” for the customer. Generally, collision customers want to find a shop where the people involved care about their needs and respect them. The customer wants to find a shop that’s trustworthy and will live up to its promises.
The customer also needs help with the processing of their claims. We deal with collision damages on a daily basis, but the customer deals with it only once every seven to 10 years. For the average consumer, the prospect of dealing with a collision repair center causes a great deal of stress and anxiety. The qualification step of the selling process provides an opportunity to ease their fears.
Qualification can be done in many ways. Simple conversation can provide needed information. Questions may be asked while sitting at a computer, or the information may be gathered while reviewing a DRP assignment. The most common method is to ask the customer to fill out a “customer information form” while waiting for an available estimator.
Any of these methods is fine, but the best method is to record the information for the customer either by completing the form or inputting the information into a computer program. Completing a form for the customer while sitting or standing shoulder-to-shoulder with them provides a much more effective opportunity for interaction.
Presentation: Pointing out the benefits of dealing with your collision repair facility is the next step. In the collision repair industry, many think of presentation as the presentation of an estimate. But in an effective selling process, the presentation is made prior to the generation of the estimate. The goal is to gain customer commitment prior to writing an estimate.
To create your own presentation, determine how you compare to your competition and why customers buy from you. To figure this out, you have to ask them! Keep your presentation 10 to 20 seconds in length.
Example: “Mr. Jones, most of our customers choose us for collision repair because we truly care about all of our customers, and we’ll work hard to exceed individual expectations. By combining a culture of caring with a focus on high quality repairs and reduced cycle time, our goal is to convert every customer to a salesperson for our business. I look forward to handling your repairs! Let’s get started with the process.”
The most effective presentations end with a “call to action.” A call to action is a request for repair commitment (we’ll discuss closing the sale later) prior to writing the estimate. Great collision repair salespeople sell the job first, then begin the blueprint process to reduce cycle time and supplements. When required, the damage evaluation is created after the presentation.
Handle Objections: This step generally follows the presentation and the generation of the estimate. When the customer offers an objection such as, “I’m not sure the color will match,” they’re not saying, “No, I don’t want to do business with you!” They’re usually looking for more information before choosing a repair facility.
Objections shouldn’t be viewed as barriers to selling repairs but opportunities to sell! When faced with an objection, follow a six-step process for the best results:
1. Listen, really listen, to the objection. Let the customer finish talking and then pause to make sure they’ve voiced all of their concerns. Don’t interrupt them.
2. Acknowledge the objection. A simple word of understanding provides reinforcement that you care about their concern and is a sign of respect.
3. Restate the objection. “As I understand this, you’re concerned about the process we use to match the color on your car?” This is a tactic to once again show respect and make sure you’re dealing with their real issue.
4. Educate the objection. Many call this “answering” the objection, but frequently we’re either educating the customer regarding their objection or we’re asking them to educate us to provide more information about their objection.
A simple objection such as color match warrants an education of the consumer about the process of color match. Other objections such as “I’ve had bad experiences…” require a request for the customer to educate the estimator about just what issues are creating uncertainty in their minds. When educating a customer about an objection, remember to keep it simple and short and avoid using technical collision jargon.
5. Assurance. Ask the customer if your explanation has answered their question. Until you’ve completely responded to their concern, you have to keep trying until they have all of the information needed to make a decision.
6. Ask for the sale. If the customer says “no” to the request to schedule the repair when you get to No. 6, don’t stop! In sales, “no” does not mean “no” until they’ve said it five times! Generally, when the customer denies a request to schedule repairs, they offer up another objection. When that happens, go back to step No. 1 with the new objection.
Close: Closing the sale is gaining customer commitment to repair the vehicle getting their signature on the repair order. In sales, getting the sale closed is what it’s all about! A closed sale translates to a repair, or revenue for the collision center.
Unfortunately, many are reluctant to ask for the sale. Why? Fear of rejection! So, we staple our business card to the estimate and ask the customer to call when they’re ready to have the vehicle repaired. If we understand that asking for the job puts food on our table as well as the tables of everyone else in the company, we begin to build motivation to overcome this fear of rejection.
There are many ways to close the sale. Positive alternative closes work well in collision repair centers. To use a positive alternative close, ask a question that can only be answered with a “yes” that confirms a commitment to repair: “Mr. Jones, I have an opening on Tuesday. Will that work for you or will Wednesday be better?”
In today’s economy, offering additional value can gain customer commitment. Example: “Mr. Jones, I’ve noticed that your car is due for an oil and filter change. If you will allow me to schedule your repairs next week, I will have that done at no additional charge.”
Deliver: This is the final step of the selling process. Most of us think of “delivery” as returning the repaired vehicle to the customer and getting the insurance draft endorsed and the deductible paid. But in an effective selling process, delivery is delivering on the promises made to the customer which caused them to sign the repair order at the beginning of the process.
Did we fulfill our promise to keep the customer advised regarding status in the manner and timeline they specified during qualification? Maintaining customer contact is a major factor in customer satisfaction, perhaps more important than delivering by a promise date. Have we completed the repairs on time from the customer’s perspective?
Repaired vehicles should be delivered on a schedule to allow sufficient time to review what was done, answer customer questions and assure satisfaction. Once the customer has confirmed their satisfaction with the repairs and the repair experience, we’ve earned the right to ask them for future referrals.
The bottom line is that a strong selling process results in increased sales and increased customer satisfaction and helps create a sales force of satisfied customers.
Hank Nunn, a 35-year veteran of the collision industry, is president of H W Nunn & Associates, a collision industry consulting and training company. He’s a frequent speaker at NACE and other industry trade association meetings and is an executive facilitator for DuPont Performance Services Education seminars. You can reach him at [email protected].