News: Collision Industry Icon Jeff Silver Passes Away
Reader’s Choice question: “With the current economy, how would you address the importance of capturing the job during the repair estimate? With volume down and shop efficiency increasing, what are the main issues we need to focus on to increase sales?” – Mark Levell, marketing director, Precision Collision Auto Body, Seattle, Wash.
Yes, capturing the job is critically important! In fact, sales are the lifeblood of the business. If a business has no sales, the business will simply fail.
The Good Ol’ Days
In “the good ol’ days,” selling jobs wasn’t a big deal. There was plenty of work, and all we had to do was be pleasant, write a good estimate and enough jobs would stay that most of us could stay busy. Of course, in those same good ol’ days, we sprayed lacquer in the open air with no respirator and wore little or no protection while welding or sanding filler. The good ol’ cancer-causing days…
Today’s sales environment is different. The customer is more demanding than ever. What used to be referred to as “insurer steering” has been formalized into DRP agreements. As noted in your question, shops have found ways to increase efficiency and reduce cycle time. Today, we must focus on sales activity to maintain a steady flow of work into the collision repair shop. It’s a matter of life and death for the business: Sell and the company survives; don’t sell and the company will fail.
Good collision sales people today understand that the sale isn’t made “during the estimate.” The sale is actually made through building a relationship with a prospective customer during the time prior to the generation of a damage evaluation.
To manage anything, you must be able to measure it. Selling collision repair is no different. The key performance indicator (KPI) most use to measure sales effectiveness is close ratio. To calculate close ratio, divide the number of ROs generated during a period by the number of sales opportunities (most use estimates written) and multiply by 100 to arrive at your close ratio percentage:
Close Ratio = Repair Orders / Sales
Opportunities x 100
Here’s an example: During the past 30 days, we wrote 60 ROs and 100 estimates for a close ratio of 60 percent (60 ROs / 100 estimates x 100 = 60%) Today, it’s a good idea to measure close ratio by DRP. Your DRP closing ratio should be 95 percent, while your non-DRP work should be 70 percent. Customer pay should be 60 percent.
Note, I suggest using “sales opportunities” instead of estimates. How many customers come to the shop only to be told to “get the insurance estimate at the drive-in, bring it back and we’ll work from that”? Those are sales opportunities! Count them.
The easiest method to increase sales is to keep score! By the way, increasing close ratio by 10 percentage points usually translates to a $240,000 annual sales increase – per estimator!
Moments of Truth
A moment of truth is any opportunity to create an impression in the mind of a customer or potential customer. Any sale is the result of the customer experiencing many positive moments of truth, which bring them to the shop, asking for an estimate. For example, the look of the Yellow Pages ad or the ease of the Internet search and the look of the webpage, the way the phone is answered, the directions to the shop, and the way the building looks. In today’s collision repair business, moments of truth must be managed and made positive. A negative moment of truth, such as the phone ringing seven times before it’s answered, can cause the customer to go elsewhere.
Qualify the customer before you generate the damage evaluation. If there’s one segment of the sales process shops should focus on to increase sales, it’s qualification. Great collision salespeople sell the job during the qualification process, not with the estimate.
Customers come to the collision repair shop full of anxiety and fear. The fact is that no one really wants to do business with us! When they finally get to our door, they should be properly greeted. They should have someone who delivers empathy and asks questions about the accident and their individual needs and feelings.
There are many ways to do this, but most use a customer information form. Don’t ask the customer to complete the form. Fill it out for the customer, allowing them to explain what happened, what their needs are and how they feel. Then, ask for the job, before writing the estimate. It’s amazing how many people will choose you to repair their vehicle if you just let them express how they feel! I know, it sounds like “Dr. Phil” stuff, but Dr. Phil has made a ton of money from that stuff!
From that point on, the estimator becomes a trusted “repair consultant” for the customer. Sell the process, not the estimate.
Close the Sale
But if you’re still going to write estimates and try to sell from the estimate, the recommendation is to ask for the sale, over and over. In new car sales, most deals are closed after the customer has said “no” five or
six times! Good salespeople know that “no” means “sell me more!”
Ask for the job several different ways: Would you like to bring that in Monday, or would Tuesday be better for you? May I order the parts? May I have the honor of proving our repair systems to you? Persistence pays.
Sales skills are critical to the long-term success of any business. There’s lots of training out there, and much of it doesn’t say “collision shop” on the cover. Read books. Go to sales training seminars. Most paint companies offer training, and so do trade shows such as NACE and SEMA. There’s no such thing as too much sales training.
Hank Nunn, president of H W Nunn & Associates, is a 35-year collision industry veteran. He has been an adjuster, shop owner, technician and jobber store owner. H W Nunn & Associates has provided training and consulting services to the collision repair
industry since 1987. He can be reached at [email protected].