Cost-Conscious Estimator Management
I’ve noticed several shops that have a lot of estimator turnover. Before one West Coast autobody chain went bankrupt, I spoke to several estimators who had quit the chain because of what they said were inconsistent pay practices. Other estimators I’ve talked to said they quit other shops because there was no opportunity to increase their pay with sufficient commissions or by upselling add-on products or services.
On the other hand, I’ve heard complaints from shop owners who said their estimators didn’t try hard enough to capture their jobs. In fact, what they were really saying is that an estimator’s most important job is selling and that their estimators might have failed to recognize what makes a good salesperson. A good estimator might take pride in his or her knowledge of vehicles and technical ability to write a good estimate—but might not really be motivated to sell. A truly sales-oriented estimator, meanwhile, might have both technical skills and an inner motivation to persuade that will set him or her apart in the eyes of the shop owner.
Maybe it’s true that some salespeople are satisfied with winning someone over to his or her point of view—the ability to persuade alone might be reward enough. But it’s been my experience that most effective salespeople expect to make their persuasive abilities pay off—and pay off well. So a shop that fails to offer enough of an incentive to motivate a quality estimator/salesperson will soon lose that person. This level of sales mentality is very similar to an athlete’s motivation to play and win the game. If the game at hand repeatedly lacks a good challenge and compensatory reward, the best players often move on to a different team.
BEAN COUNTERS OR HORIZON EXPANDERS?
I recently had the opportunity to interview a company that handles many add-ons that are outsourced by a local shop in my area. Their products include clear bras, smoke films, wraps, graphic designs and more. Some of the company’s best-selling products are clear bras and protective films for headlamps and bumper covers. At a time when repairs to an expensive hood and front fender can cost thousands of dollars, this protection against sand, rocks and debris is an easy sell for a product that a customer would likely consider relatively inexpensive. The estimator who is given the opportunity to upsell these products for a commission will see a significant pay boost in most areas.
Unfortunately, today it seems that many businesses have come to be dominated by economist-managers who imagine that they have to work within a “revenue ceiling.” I call them “bean counters,” and, from their point of view, it’s only possible to increase profits by cutting costs. I know of one shop where the owner decided to use one of these guys to increase profits. Immediately the B.C. (bean counter) noticed that a couple of estimators were often earning more than $10,000 a month. “Aha,” he said. “Here’s a good place to add more than $10,000 a month to the bottom line,” and when the estimators were let go, the B.C. did add $10,000 a month to the bottom line, all right—only it was to the bottom line of a competitor.
It’s also been my experience that the businesses that thrive best are dominated by sales-oriented top executives who know that an effective salesperson never sees a ceiling on revenue or a limitation of possibilities.
A sales orientation always assumes that it is possible to create more business, find new and better prospects and increase revenues while still watching costs intelligently—but not brutally! While accountant-managers are economizing, cutting back and downsizing, sales-driven managers are widening horizons, reaching further and looking for new frontiers to explore and conquer.
In a body shop, this means first hiring estimators who can not only estimate well, but also sell well. It also means understanding that an estimator with a strong sales orientation is like a dynamic young race horse, eager to get out there and get more customers and to legitimately coax more out of every customer. All a clever manager has to do is point that kind of estimator in the right direction, offer some fulfilling rewards and turn him or her loose to produce a wealth of sales and profits for the shop.
Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.