Estimators Earn Their Keep
Around this time last year, I wrote about the problem of retaining good sales-oriented estimators. I noted that really talented estimators with selling skills expected superior compensation and often moved on when it wasn’t forthcoming. This year, as many shops have experienced a major drop in business, I’ve watched the compensation issue heat up even more, and I’ve seen more competent estimators move on looking for better pay.
Sadly, one of the places many have chosen has been the ranks of a local insurance company’s appraisal crew. While I’m certain some shop owners have been pleased to have a really experienced adjuster writing estimates for that insurance company in his or her shop, it’s unfortunate to see another promising collision industry professional abandoning the shop side of the game.
A PROFIT MENTALITY
In the May 2008 issue of FenderBender, an article featuring Schiro’s Collision Repair in North Hollywood, Calif., noted that the owners “bonus heavily for the stellar performance.” Unfortunately, I’ve found this to be the exception rather than the rule. According to what I’m hearing from estimators, during slow times, bonuses simply go down with the business. What seems to be lacking is a profit mentality.
There are many ways estimators and other customer service personnel can stimulate more business, and compensation tied to that stimulation could easily be one way to cure the “slow condition.” For example, author and consultant Jay Abraham, in his timely book, Get Everything You Can Out of All You’ve Got: 21 Ways You Can Out-Think, Out-Perform, and Out-Earn the Competition (St. Martin’s Griffin, 2001), says: “There are only three ways to increase your business: 1. Increase the number of clients, 2. Increase the average size of the sale per client, and 3. Increase the number of times clients return and buy again.”
Immediately this provides three ways estimators can increase business or profits, and in turn increase their own compensation as well.
Three ways to INCREASE ESTIMATOR COMPENSATION
1. In most industries, sales people provide many quotations and make many proposals to prospective new customers. Typically, their sales success ratio is determined by how many proposals they make. In the collision industry, the estimate is the proposal, but few shops focus on this idea of making as many proposals (estimates) as possible. Tying an estimator’s compensation to the number of estimates that turn into jobs might inspire an ambitious estimator to go out of the shop to parking lots or wherever to write more estimates.
2. Structuring the bonus to reward the estimator for up-selling add-on services and products would also increase shop profits. In a recent issue of Restyling magazine, the editor points out that “ . . . the U.S. Department of Energy thinks that low-friction parts could save 100 million barrels of oil annually.” He mentions that a simple move like changing a drive axle’s bearings to reduce friction can increase fuel economy. An alert estimator may find a way to bring greater economy, value or driving pleasure to a customer and a higher profit repair order for the shop.
3. Especially in this slower economy, estimators have more down time. To help keep the shop busy, it should be a no-brainer to have estimators offering special deals—for simple scratch-and-ding repairs, paintless dent removal, or even detailing—to prior customers by phone, mail or email. Naturally, there should be a bonus when this extra effort pays off.
SOMETHING FOR NOTHING?
The Internet has introduced a somewhat unbelievable element into the business environment. Because anyone with an Internet connection can go to search engines like Google and Yahoo! and obtain vast amounts of information for free, some have come to believe there is no reason to pay for new or better information or connections. But nothing could be further from the truth. Professional services—even those provided on the Internet—will generally yield far more revenue than one can get from the free information. Likewise, the exceptional estimator or consultant can bring a shop far more business than the cost of the investment to pay these people generously.
I have, for example, generally given a money-back guarantee that a shop will at least double the cost of my consulting fee in new or increased business revenue. This is no big deal. A client should easily gain 10 or more times the cost of any consultation—and even more than that from effectively compensated estimators. The key is to abandon a “cost mentality” and focus on a “profit mentality”!
Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.