Selling is the most important activity in any collision repair facility. It’s that simple. We may feel that the most important activity is repairing damaged vehicles, but you don’t get to repair anything until the job is sold. Selling is the only activity that brings revenue into the business. Everything else, including repairing cars, drains revenue from the business.
While selling is the most important activity in the facility, frequently no one wants to perform the function. You often hear, “I’m an estimator, not a salesman!” The reason is because sales is often looked at as an unsavory activity. Our vision of the sales activity is tainted by the hard-sell used-car salesperson or the door-to-door vacuum cleaner salesperson.
Yet there’s no more noble activity than selling collision repairs. Think about it: If you’re an “estimator” in a collision repair facility, you and your family depend on your sales skills to provide a roof over your heads, food on your table, money in the 401(k) and hopefully a few dollars each month into a 529 plan for the kids’ education. Also, a salesperson generally supports four to 12 other productive employees. Not only are you and your family dependent on your sales skills, everyone else in the business depends on them, too.
In most collision repair shops, estimators are paid based on sales, not estimates. Our pay is generally a percentage of closed repair orders, not estimate dollars. Like it or not, we are salespeople.
Unfortunately, many shop estimators haven’t been trained in sales skills. As an industry, we see value in sending our estimators to estimating training, yet we see no value in sales training.
Sales KPI: Close Ratio
The key performance indicator (KPI) for selling effectiveness is “close ratio,” which is the percentage of sales opportunities we convert to repair orders. The math is simple: Repair Orders / Sales Opportunities x 100 = Close Ratio %.
If we wrote 60 repair orders from 100 sales opportunities, the close ratio would be calculated as: 60 ROs / 100 Sales Opportunities = .60 (x100) = 60% close ratio. That’s pretty close to the industry average.
Note the suggestion that we use sales opportunities instead of number of estimates. That’s because we frequently don’t write estimates. For a variety of reasons, estimators may choose not to write an estimate. Perhaps the vehicle is insured by a company that will write its own estimate, the estimator is busy or the job doesn’t seem worthwhile. We should count the sales opportunity rather than the estimate to get a true measure of close ratio.
For example, I recently had cause to look for a shop to repair the family Accord. I visited several area shops, but not one wrote an estimate. In fact, no one even got my name! If those shops measure close ratio as ROs divided by estimates, I don’t even factor into their calculation since no one even counted me as a sales opportunity.
To illustrate the value of improved sales skills and increased close ratio, consider the following example: Mike is an estimator in an average shop. He processes an average of 60 ROs per month. The average RO is $2,000, and Mike has an average of 100 sales exposures per month.
Mike’s close ratio is 60 percent (60/100), and his average monthly sales volume is $120,000 (60 x $2,000). If he could improve his sales skills and increase his close ratio to 70 percent, he would process 70 ROs per month (70 percent of 100 sales opportunities) and have monthly sales of $140,000 (70 ROs @ $2,000). The result: a sales increase of $20,000 per month ($240,000 per year), achieved by more effectively selling the opportunities that are already coming to the door. By the way, that would increase the shop’s annual net profit by more than $90,000, depending on gross profit margins.
Selling Is a Process
Selling in a collision repair shop should be easy. The customer has a damaged vehicle, we have a facility that repairs damaged vehicles. They have a need, we have the solution. This ought to be easy … and it can be!
Selling should be viewed as a step-by-step process. The steps are:
4. Handle Objections.
If followed properly, the process results in increased sales and profitability for the shop and increased income for the estimator.
80-90% Close Ratio? No Problem
Good collision salespeople can sell 80 to 90 percent of their sales opportunities. To achieve those close ratios, they use strong sales skills and follow a proven sales process. Most of us close 60 percent or less of our sales opportunities. Some tips for increasing sales effectiveness are:
1. Get sales training for the entire team. Everyone should be involved in selling for the shop. Sales training is a must for estimators, managers, customer service reps and anyone else who’s in regular contact with the customer. DPC’s SMART Sales is one such training seminar; others can be found at AMIOnline.org.
2. Measure sales effectiveness. We should know close ratios for each salesperson, week by week. Posting close ratios is the first step in increasing that important number. If you’re using a shop management system, manually re-check to see that the close ratio given by the system is accurate. Are you measuring estimates or sales opportunities?
3. Implement sales standard operating procedures (SOPs) to ensure consistent customer treatment. Sales qualification techniques, presentations, closing, handling objections and up-selling are all processes which can be written as SOPs.
Qualification. The first step of the sales process, qualification, begins when the customer walks in the office door or makes the initial contact by phone. Qualification is the most important step in the process. While qualifying the customer, we have the opportunity to demonstrate empathy, build trust and begin to help the customer through the repair and insurance claim process.
Many shops use qualification forms or customer information sheets. Usually, we simply hand the customer the form and let him or her fill it out. The customer completes the form and gives it to the estimator, who then generates an estimate. In the case of the DRP customer, shops frequently skip this step. The assignment is handed to the estimator and the estimate is generated. Often, the qualification step is hurried or skipped because of workload issues.
Last summer, I had the opportunity to visit a doctor. I didn’t want to go because I was fearful of the unknown procedures to be performed behind those scary, sanitary doors. I went to the office at the appointed time, and the receptionist handed me a clipboard of forms to complete and took my insurance card. I was directed to a seat in the waiting room, where I was to fill out the redundant forms. The receptionist then closed the window between us, and my fear and anxiety increased.
Does this sound like what happens in our shops? Our customers come to us after a collision, full of fear and anxiety. And how do we treat them? Do we hand them a form, sit them in a corner, write an estimate and send them away?
The customer wants empathy above everything else when he or she comes to our business. Empathy means having an “understanding of another’s feelings.” That’s what we all want from service providers. It’s what I wanted from the doctor’s receptionist. My point is that demonstrating empathy during the qualification step of the sales process is the only real way to differentiate your shop from the competition in the customer’s mind.
Don’t hurry qualification. Complete the customer information worksheet for the customer. Make sure to get all the information on the sheet, but be sure to ask real questions. Then, shut up and listen to the customer’s responses. That demonstrates empathy. Good collision repair salespeople can close sales during the qualification step of the sales process by doing nothing other than demonstrating empathy for the customer. They get the job before they even look at the car!
There are many ways to qualify a customer. You can use the customer information sheet, qualify the customer reviewing the information on the DRP assignment or even perform the qualification by just talking to the customer about the way to look at the vehicle.
Qualification allows us to determine the customer’s unique needs so that we can tailor our offering to him or her. More importantly, qualification allows us to demonstrate empathy and build trust with the customer.
Presentation. Many of us simply go from qualification to writing an estimate. We need to do a bit more. Once we’ve completed the qualification step of the sales process, we should offer a short presentation about the shop. The ideal presentation should be short and illustrate the benefits of doing business with your shop. Think of it as a 45-second infomercial for your shop focusing on what makes your shop different from the competition.
For example, the dialogue might go something like this: “Ms. Smith, you have a choice of repair shops for your Honda. There are several good shops in this market. We offer state-of-the-art equipment and a lifetime warranty, plus we focus on repairing your Honda as quickly as possible. There’s one thing you can get here that’s simply not available at any other shop, and that’s me. I work here, and I care about restoring your vehicle to pre-loss condition as quickly and easily for you as possible. Let’s get the process started.”
Many think of giving the estimate as the presentation. Ideally, we should try to get the customer’s commitment to repair before writing a damage evaluation. The damage evaluation should be viewed as part of the repair process, not as part of the sales process.
Develop presentations that focus on the unique benefits of doing business with your shop, and focus on the customer’s needs. Then, ask for the job before writing the estimate. You won’t get them all, no one does. But if you never ask, you’ll never get the job before writing the estimate.
In many cases, the initial estimate can be reduced to a parts list and order: “Ms. Smith, looking at your Honda, I can tell that we’ll need to remove the bumper to see all of the damaged components. If you’d like, I’ll go ahead and make a list of all of the parts I can see that need to be ordered. I’ll also order the internal components that experience tells me we’ll need to repair your car. Once we have the vehicle dismantled, I’ll complete the damage evaluation and advise you of our findings. Naturally, I’ll work things out with your insurance company and, with your approval, we’ll go ahead and repair your Honda.”
Close. Now it’s time to close the sale. Closing is simply obtaining the customer’s commitment to have your shop repair their vehicle. It can happen on the initial phone call or during the qualification step of the repair process. Every sales presentation should end with an attempt to get the customer’s commitment to allow you to repair his or her vehicle.
If the sales process has been followed, the customer qualified, empathy demonstrated and a customer-focused presentation provided, closing the sale is easy. However, if you skipped steps in the process, closing the sale can be hard.
Many shop estimators do a good job of qualification then make a good pres-entation of the value of having the customer choose their shop to repair the vehicle. But then, they fail to ask for the job! Why?
In his book, “How to Market, Advertise and Promote Your Business or Service in a Small Town,” Tom Egelhoff says, “Now is the time to close the sale. This is the most difficult function of the sales process … Fear of rejection is pretty powerful. We will risk losing the sale before we’ll face the disgrace of rejection.”
We don’t ask for the sale because we’re afraid that the customer will say “no.” But we need to get over it and ask for the job!
There are several types of closes: assumed close, value-added close, third-party close and closing from an objection.
The assumed close is the easiest. You simply assume you have the job and ask the customer to take a step to close the sale: “Ms. Smith, if you’ll just sign the repair order, we’ll go ahead with that parts order.” The assumed close can be very effective if incorporated into the qualification process.
Value-added closes offer some special value to the customer if he or she will agree to have the vehicle repaired at your shop: “Ms. Smith, I noticed that your Honda is due for an oil change. If you’ll schedule your repair next week, we’ll take care of the oil change free of charge.”
Third-party closes rely on a referral source as a “team member” to encourage the customer to choose your shop: “Ms. Smith, ABC Insurance referred you to us because we have a documented track record of high customer satisfaction and rapid repairs. I would appreciate the opportunity to impress you with our service just as we’ve impressed ABC Insurance.” In this case, ABC could be a past customer or any other referral source.
Closing from an objection will be discussed in the following section.
Handle objections. OK, we’ve qualified the customer and gently asked for the sale, but the customer simply ignored the request. We’ve given our best presentation and clearly asked for the sale again. The customer then says, “No, I’m not sure…”
That’s called an objection. Many of us stop the sales process when we get the first real “no.” But how we handle objections can make a 10-point difference in our close ratio! Selling is a process, and so is handling
Objections generally come after an attempt to close the sale, but they can pop up any time. Common ones
include “I need to check with my spouse,” “I’m unsure about the color match” and “What can you do about my deductible?”
Think of a customer’s objection as a request to know more before making the purchase decision. The customer is saying, “Sell me some more, you haven’t earned this one yet.”
Objections may be handled in a five- step process:
1. Listen to the objection. “What can you do about my deductible?” Shut up and really listen. Don’t try to respond or answer until the customer has fully spoken his or her mind. Then, pause a moment before replying. This helps build empathy and makes the customer feel that his or her concern has merit.
2. Restate the objection. Clarify the issue. Once again, this proves to the customer that his or her concern is valid. It also spells out exactly what needs to be discussed. “Oh, I understand that you’re concerned about when and how you pay your deductible.”
3. Educate the objection. Some objections require more information from the customer: “Ms. Smith, I understand that you’re unsure of some issues involved with repairing your Honda. What are those issues so that I may address them for you?” Once you’ve drilled down to the real issue, start at the top of the objection process with each concern.
Other objections require educating the customer as in the deductible objection above: “Ms. Smith, we accept cash, check or credit card for deductible payment. That payment isn’t required until the repairs are completed, probably two weeks from today. Which will work best for you?”
4. Reaffirm the objection. Make sure that you’ve answered the customer’s question and resolved his or her concern. “Have I answered that for you?” is usually enough. Keep the education process going until the objection has been answered. Often, another objection will arise: “No, what I really mean is that I want you to absorb my deductible.” In those cases, treat the response as a new objection and start all over with the new objection.
5. Close the sale. Once the objection has been handled and the customer concerns are resolved, ask for the job again: “Since we’ve handled that issue, would you like to take advantage of that opening on Tuesday, or would Wednesday work better for you?” You can use any of the closing techniques discussed above.
Close and upsell. If you’ve followed the sales process to this point, you’ve qualified the customer, demonstrated empathy and built trust. You’ve asked for the job and the customer has said, “Yes!”
But you’re still not done. Sell them something else! There are often two jobs with every customer: the “loss” and anything else you can sell. Stripes, accessories, detail services and a host of other things can be sold in a body shop. Isn’t it your moral obligation to sell an alarm system to a customer with a recovered theft?
I mentioned the family Honda earlier. In that case, the “loss” was the left front headlight and adjacent panels. The car also had two small “soft” dents on the right quarter, a small dent on the bottom lip of the deck lid and a broken windshield. It also needed a thorough detail. A good collision center salesperson could have easily converted the $1,500 loss to a $2,500 repair order. But first, I needed to find someone who wanted to repair it.
The rule for up-selling is: Close the sale first, then offer a small up-sell. If the customer balks, stop. Don’t lose the core sale because of aggressive up-selling. On the other hand, if the customer says, “Yes, I would like additional services,” keep selling.
Once you’ve closed the sale, you’re still not done! Sales and marketing activity could break the trust that you built through the sales process. Stay in touch with the customer, do what you said you’d do. Then, turn that customer into a salesperson for the shop.
Hank Nunn is the president of H W Nunn & Associates, a collision industry consulting company. He has more than 30 years’ experience in the collision industry as shop owner, technician, jobber store owner and consultant. Nunn is currently sales and marketing manager and facilitator for DuPont’s SMART Seminar Series. He may be reached at [email protected]