News: Consolidator Report
You can only cut expenses so much, but the opportunities for increasing sales are limitless.
In part one of this article, which appeared in the September issue of BodyShop Business, you’ll recall that a wise man once said, “You can only cut expenses so much, but your ability to increase sales is unlimited.” In the first article, we explored the expense half. Yes, it’s true you can only cut so much, but there are still a few quick and easy ways you can make a big impression on your expenses. In part two, I’m going to explore the other half of the circle. As the quote says, the bigger half, the unlimited half, is expanding sales.
Just to expand on what the quote above says, focusing on the expense side surely has a limit. It’s limited in two ways, first by the fact that you have only so many expenses to control. Second, there’s a natural limit to how much you can cut and still be able to do business. You can monitor your electric bill, but you can’t operate without enough electricity to keep your lights on. You can monitor your natural gas consumption, but if your booth operates on it and you want to bake your paint, you’ll have to spend the money. On the other hand, your ability to go after more sales is not restricted by any outside factor.
Most times, and in life, we as human beings limit ourselves. Most people build imaginary walls around themselves and never think to find a way to accomplish their goals. The picture of the mighty and powerful elephant held in place by a small stake driven into the ground enters my mind right now. The elephant, if it tried, could easily pull the stake out, but it doesn’t even try. The whole point is, why concentrate on something that’s small and limited and ignore the unlimited opportunity of sales that’s right in front of you?
There are many ways to change this. Let’s explore a few.
Some of these opportunities are right in front of you and can be done today. The first question I would ask you is, how accurate are your shop’s estimates? I once asked a shop manager how accurate his estimators were, and he quickly answered that his estimators were very good and very accurate. I already knew the answer, but I went ahead and spent an afternoon camped out in the paint shop and reviewed estimates. What I was able to prove very quickly was how wrong and out of touch he was, as the estimates were anything but accurate. He was there every day, yet he truly but wrongly believed everything was fine. “Trust but verify,” as President Reagan once said, is exactly what needs to be done.
The first step to increasing sales is to get on the front lines and personally verify that your estimates are indeed accurate. Don’t think, don’t guess, just get out there and find out for yourself. Remember, I said accurate, not inflated, aggressive or unethical.
So few shops write for everything they’re entitled to. Unfortunately, there’s a high level of ignorance out there in our industry. You don’t know what you don’t know, and if that’s the case, you should reach out and try to learn. There are so many options out there that are readily available for learning, there is no excuse for ignorance. If nothing else, get out of your chair and spend time in the shop with your technicians and actually see what they do, or in some cases what they don’t do. Your goal should be to perform top-quality, grade-A repairs, and you should write your estimates to reflect that. My point is, if you’re fixing vehicles with low quality, you’re probably writing your estimates that way and being paid accordingly.
First, you need to establish a culture of doing top-quality repairs. Second, you should hone your craft and become an educated and detailed estimator. Lastly, you should demand to be paid accordingly to the quality of work you perform. So start with what’s right in front of you and make sure to write your own estimate on any vehicle in your shop no matter what insurance company it’s for.
Another simple and easy way to increase sales is to make sure you have a policy in place for writing cash pay estimates. Time and time again, I’ve seen opportunities for cash pay estimates go unwritten, unrepaired and unpaid. If you don’t have a process for this, it’s not going to get done. No matter how well-intentioned people are, it seems that cash pay estimates consistently slip through the cracks. I’ve seen customers ask for cash pay estimates and not receive them, and I’ve also seen cash pay opportunities in the shop that are not gone after.
Again, go out into your shop and look around. How many vehicles are out there that have cash pay estimate opportunities? I assure you there are many in your shop right now that are right under your nose. Don’t fall into the trap of saying no for the customer without even asking. Fortunately, I learned this lesson very early on in my career. In my early 20s, we were repairing a vehicle for a neighbor who lived behind the shop. My estimator told me they had asked for a cash pay estimate for some additional work. At that point, I wrongly tried to “educate” my estimator. I told him, “Don’t waste your time, those neighbors will never get that work done.” I mouthed off for a few minutes and finally relented when he said, “Listen, I’m going to write it, I really think they will have it fixed.” I laughed and said, “OK, have it your way, go ahead, but I’m right.” He wrote the estimate and lo and behold, they agreed and paid to have the work done! I had pie on my face that day, but I never forgot the lesson. Never again would I guess the score before actually knowing it. It truly isn’t over till it’s over, so keep playing until the whistle blows.
These first two examples of how to increase sales are for vehicles sitting in your shop right now. Additionally, you may have customers coming in and out of your office daily who are not having their vehicles repaired with you. Your shop may offer itself to be used as an insurance drive-in. Just by having the customer in your office, you have the chance that some of them will elect to have their vehicle repaired with you. However, if you would like to increase your chances of success, it’s a good idea to spend a few moments talking to those prospective customers. It sounds simple, but they may not even realize they can have their vehicle repaired with you. Take a few minutes to introduce yourself, explain your shop and the benefits you offer and, most importantly, ask for the sale. This is elementary 101 stuff, but you would be surprised at how often the elementary is overlooked. You may have 25 people per week coming to your place of business for a drive-in and, unless you ask for the sale, 25 people may walk out. Having a professional office and a comfortable waiting area certainly helps.
You should also be tracking the “batting averages” of your estimators. Writing walk-in estimates but not converting them is a total waste of time. If these closing averages are not being looked at and reviewed, there’s a possibility that thousands of dollars are walking out the door per week. Remember: the object is to repair vehicles, not write estimates.
Within Your Control
Everything I wrote about in this two-part article is already within your control. There’s nothing to buy, and there’s nothing to spend. These opportunities are right in front of you every day. If you take advantage of them (and there are others, too, as I only discussed internal sales), you have a chance to make a big difference in your operation.
Where did the wise quote come from, you may ask? My father, who was a body technician, shop owner and multiple shop owner in his day…and he was really on point with what he said.