Seal the Deal on Unsold Estimates
The best education Henry Yach III received in the collision industry came from simply watching his father, who ran Yach’s Body & Custom Inc. in Wausau, Wis., for more than 40 years. He started out in 1969, before shop management systems and before direct repair programs.
“He had to focus on customers,” Yach says of his dad, who retired and handed the business over to his son in January. “He was the main estimator for years and years, and he focused on helping customers understand the estimates and he had to make sure to sell those jobs.”
Closing ratios have always been a focal point at Yach’s Body & Custom. And the fact is, Yach’s shop has never had a problem selling its work. In 2012, the shop’s overall closing ratios hovered right above 80 percent much of the year, a number helped in part by a thorough process of following up on unsold estimates.
“That doesn’t make up a large portion of anyone’s work,” Yach says, “but it does make the difference in having a good closing ratio or not.”
Having a detailed post-estimate, follow-up procedure, Yach says, will add revenue to your shop, and it’s surprisingly simple to implement.
First Things First
Lazy might not be the exact word to describe it, says Robert Rick of RR Custom Solutions LLC. Complacent is more like it.
“Many people have taken to the mindset that, ‘Oh, we’ll just wait for that next DRP to come in,’” Rick says. “And we’re becoming insensitive to the customer who pays themselves or hasn’t decided what shop to use for their repairs.”
Having the right attitude and perception of the customer’s needs, Rick says, is the first step to improving sales—especially those on customers who have left the shop without electing to do the suggested repairs.
Hank Nunn, collision industry trainer and consultant with H.W. Nunn & Associates, has helped shops across the country develop practices for landing post-estimate sales.
“A strong unsold estimate follow-up process has proved valuable to those who use it consistently,” Nunn says. “Follow-up processes on the unsold estimate should be a standard procedure, followed on every unsold estimate, every day.
“If this process is done weekly, or only when the shop is slow, it will not work.”
Nunn, Rick and Yach all suggest nearly identical procedures for shops to use in following up with customers on unsold estimates.
1. Initial customer interaction. Whether it’s through “visual eye contact, a handshake, phone call, or even body language as the customer enters the shop,” Rick says that first point of contact with a customer is key to setting up everything else that follows.
“It’s about making sure the customer is going to be comfortable working with you,” Yach says. “The way you greet them or talk to them, right away, has to show them that you care.”
2. Explain the estimate. It may seem obvious, but Rick says many shops he works with don’t help customers enough when they present the estimate. That is to say, they do a poor job of explaining things.
“Most customers aren’t going to understand everything you’re saying, they’re not going to understand what the best course of action is,” Rick says. “They will understand the price, though.”
The key, he says, is to take the extra time to ensure all their questions are answered. If they seem to be wavering on committing to the repair, Rick says, simply ask them why.
3. Call to action. Not every customer is going to agree to the repair on the spot, but they likely have a time frame for making a decision. Get a commitment on a time to speak again within 48 hours of the estimate, Nunn says.
Rick says to make it as convenient as possible for the customer, picking a time of their choosing. Make sure you are the one calling them and not vice versa, Rick says. This allows you control over the process, and it ensures the customer’s commitment to speaking again.
4. Thank-you note. In between the initial estimate and the follow-up call, Rick suggests sending a handwritten thank-you note to the customer. It’s just a simple note expressing your gratitude for the customer choosing your shop, Rick says. And the fact that it’s handwritten shows you took the time, he adds, and it shows you care.
5. Proactive phone call. This is the most crucial aspect of the process, and often, it’s where the sales are closed or lost. This phone call takes place at the time set up at the call to action, and Rick is firm that it needs to be a proactive call.
“It needs to be a follow-up about doing business with you, not just a ‘thanks for coming in’ call,” he says. “You’re finding out when they’re getting the repair done, what concerns they have, what questions they have. You’re getting the information you need to close that sale.” [See sidebar for a script.]
6. Final follow-up call. Not every estimate will be sold through Step 5 of this process—so try again. Make another proactive call, Rick says.
Don’t Forget to Keep Track
Yach’s father always enjoyed monitoring the numbers of his business, and it’s something Yach focuses on now. Closing ratios are one of the key numbers he looks at every week.
“We monitor it for each of our two estimators, and in terms of both dollars and number of jobs,” he says.
Look at it weekly to stay on top of things, Yach suggests, but use the month-long numbers to give a clearer picture of how your shop is doing. For instance, Yach can pull up a random week in November 2012 from his shop management system, and he sees that his team sold 34 of the 42 estimates it wrote that week, just under 81 percent. That also amounted to roughly $74,000 in sales out of a possible $94,000, about 79 percent. That number only becomes relevant, Yach says, when comparing it to the overall results of the month.
“It gives you an indicator of where you are and what you need to do to improve,” he says.
With a full follow-up process, Nunn says shops should be able to close 20 percent of all estimates that leave the shop unsold after the initial visit.
Rick agrees, and says that, in his experience, implementing a follow-up process can raise a shop’s overall closing ratio by nearly 6 percent. Putting a hypothetical example together, Rick says, that can mean $12,000 in additional monthly sales for a shop working on 100 cars a month at a $2,000 average repair order.
Yach says the numbers don’t lie, and that’s something he didn’t need anyone to teach him.
“It’s pretty easy to see the results,” he says. “It’s all right there.”