Shocking as it may seem, staffing does play a pivotal role in what happens with closing ratios.
Let’s say that all the right pieces are in place that we covered in part one. The curb appeal is great, the lobby has never been cleaner or more inviting, and the input methods are cutting-edge for the industry. OK then, why are my numbers not where I would like them to be?
First, what do you want your numbers to be? We can smugly spout out, “One hundred percent, of course!” That’s the goal, but in the real world, it’s very unattainable for sure. Unless you’re the boss and the only estimate you write for the week is the one for your golf buddy and maybe one for your wife who backed into a pole at the garden center, FOUL! That does not count. For the rest of the estimators in the trenches who are graded on closing ratios and may even have a bonus structure tied to it, 100 percent is a dream. Or is it? Here we go!
The closing ratio is simply based off of what’s written up versus what’s actually turned into work in the shop. If you write 100 estimates and secure 85 of them, your effective ratio comes out to be 85 percent, which is very acceptable. What’s in the pool of the 15 percent that did not turn into jobs? There could be a couple of total losses in there that need to come off that list. What about the one for the DRP that decided to cash out instead? There are many factors that come into play, but my all-time favorites are the “tire kickers” and the “mini torts.”
Would it really be the worst idea in the history of man to take the approach that estimates are NOT FREE? Maybe you’re already doing this, and if you are, I commend you. It’s a hard stance to take at first, but as it progresses, I would challenge that what you’re really doing is weeding out the time wasters.
So let’s take an example. Bob stops in. He has been a loyal customer for decades and would like to know what it will cost to fix the 2007 Grand Prix for his grandson. Charge or no charge? My guess is it will be no charge. Bob doesn’t really fall into one of the earlier categories completely. Maybe you can get away with a verbal to get him a ballpark to base his decision on, or maybe not because he needs it on paper to go over with Grandma since she’s not there and doesn’t trust his memory! Stay out of that argument, by the way.
The instances I’m really asking for contemplation on is when you have someone stop in and say the magical words, “I would like an estimate.” What is your response? Literally, what are the first words that are muttered by either your CSR at the front desk or the estimator who happens to greet them? Let’s jump ahead 15 seconds on the assumption that introductions and a handshake have happened and they’re now holding your business card. What’s next? A couple of things I like to get into immediately are
Have you been in to see us before?
If no, how did you hear about us?
If yes, thank them for coming back to see us.
Can you tell me a little about what brought you in today?
Simple stuff, really. I happen to remember faces and names really well, but not everyone does. Yet, I won’t remember everyone that comes in that door and when they were there last. Maybe there’s facial recognition software out there that I’m missing the boat on that alerts me to who’s coming in the
Wait! Quick segue here. Are you setting up appointments for repair opportunities or is it just totally random? This is a future topic, but it has merit in that it affects the ratio, too. Also, when Bob is coming in at 10 a.m. with his black 2015 Buick Enclave, you know to expect him. When a vehicle matching that description pulls in to the lot about 10 a.m. and a man gets out and heads for your door, my guess is there is a very high likelihood that Bob or Mr. Johnson, if you will, has arrived. He walks in your door; your CSR scans the schedule and greets Mr. Johnson with a smile.
“Are you Mr. Johnson?”
What just happened there? Mr. Johnson likes the fact that you know it’s him and you were expecting him. You may have even gotten as crazy as to send an email reminder about his upcoming appointment. You just became the professionals. Boom. Quick aside: What are the chances that your CSR affects the closing ratios? You better believe it, and if they aren’t part of the bonus program for that ratio, you’re missing a key ingredient in the winning recipe.
And We’re Back …
When the person coming in the door tells you about why they’re there to see you, we all know it’s because damage has occurred. That’s NOT what you’re listening for. Forget the damage; it will take care of itself by default during the estimation phase. Listen with open ears about who this happened to, where it happened and why it happened. Another fair question is if it’s customer pay or going through insurance.
The customer needs an estimate to be able to claim his money for a mini-tort or lawsuit. They’ve never been a customer before, or it has been forever.
This type of estimate is usually fairly quick in nature as the vehicle is usually older and will probably not be fixed anyway. They just want an estimate to get the full amount of what’s allowed to them for the damage that transpired.
“I want to help you, Matt. Just to be clear with you upfront, we charge $______ to do an estimate of this nature to cover our administrative costs. However, if you have this or any other car repaired with us in the next six months, we’ll apply that fee toward that repair. Does that seem fair?”
You determine what a fair cost is to cover your time. I would suggest having a way to take care of this as a Fast Track Package in your software on the accounting side that makes it quick and easy to bill it out and receive the monies from the client. They also may walk away and go somewhere else where they can get a free estimate. You need to decide if that’s business you’re OK with skirting. Most folks will pay you a nominal fee that can be redeemed later in order to collect a much larger amount from a lawsuit. If not, move on. It’s a case-by-case basis and not worth losing a good client over, but it can begin to weed out time-wasters. Rust estimates fall into this same scenario, in my opinion, as do total rustorations. And no, that’s not a typo.
A potential client shows up with a very repairable vehicle and tells you the following: “I am driving around to get a couple of estimates to see how much this will cost.”
You may have uncovered some of this equation upfront. They told you it’s an insurance claim. So, why are they getting multiple estimates then? Are they a claimant with someone else footing the bill? Do they know that they don’t have to do this and can go wherever they see fit? Time to educate them, gently.
If they’re set on getting more than just your estimate, ask them if they have already had another estimate done on this damage. If yes, ask them how that went for them. It may give you the opportunity to not make the same mistake that led them to your door. Ask if you may review it against your estimate after you’re done to be sure you’re doing a fair comparison for them. You’re savvy enough to know when someone is looking to just do a payout and when they’re going to repair the damage. If you’re not sure, ask, “Sir/Madam, are you going to have the damages repaired?” If they recoil at that question or about seeing the other estimate, there’s more digging to do if it’s a worthwhile repair.
“Bill/Susie (I hope you’re using their name by now, after asking permission of course), I am happy to work with you to come up with a plan. Just to be clear with you upfront, we charge $_______ for a competitive estimate of this nature to cover our administrative costs. If you decide to have us do the repairs for you by scheduling today, we will waive that fee entirely or apply it at a later date on any repair you have done with us in the next six months. Does that seem fair?”
You may have reservations about doing this. I get that, to a point. It’s not business as usual, but our industry needs to take a page from some of the other professions around us. Tell me one thing you can do at your doctor’s office for free and with no appointment? Their time is no more valuable than yours. This may not alleviate every estimate that seems like dust in the wind, but imagine if it could stop the lion’s share of them and you could recoup some money at the same time.
Striving for no free estimates and estimating by appointment only will lead to a better closing ratio.