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Measure Your Closing Ratio

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Dave Hamby, owner of Express Auto Body in Georgetown, Texas, always prided himself on his shop’s solid closing ratio. For years, he closed 85 percent of the jobs that came through his door. Or so he thought. Rather than actually measuring the statistic, he’d been making a ballpark estimate.

Hamby started measuring his closing ratio in 2007, and was “thunderstruck” by the results: 39 percent. “I thought my guys were doing a great job of selling,” Hamby says. But more than 60 percent of potential customers were walking out the door.

Hamby worked to hone his sales skills. He learned to focus on having customers “get to know the business” through a technique called consultative selling. That approach informs customers about the shop’s expertise and the value of it, rather than providing them with yet another estimate that they’ll compare with quotes from other shops.

Hamby’s closing ratio jumped to 80 percent by 2009. The shop now moves 120 cars each month, up from just 70 in 2007. And his monthly revenue improved by 58 percent.

Having a mindset toward sales is the most important consideration for shops to land more jobs, says Scott Wheeler, west region services manager for AkzoNobel Car Refinishes. Of the customers that leave your business to “shop around,” nearly 70 percent of them won’t come back.

“Merely offering estimates doesn’t address any of the customers’ needs or concerns, and you lose your opportunity to sell your facility to the customer,” Hamby says. Shop operators can secure future success with a little know-how in progressive sales strategies that make customers feel comfortable about choosing your shop based on more than just a price quote.

A Consultative Approach

The mix of today’s competitive environment with a decline in repair opportunities has made closing ratio improvement all the more important, says Ron Perretta, instructor of PPG’s MVP Business Solutions training courses and owner of Professionals Auto Body in Pennsylvania.

“Merely offering estimates doesn’t address any of the
customers’ needs or concerns, and you lose your
opportunity to sell your facility to the customer.”
—Dave Hamby, owner, Express Auto Body

Hamby agrees: Shops can’t just provide customers with an estimate and assume they will get the business. That transaction-style sales technique had been the norm at Express Auto Body. It was a technique that didn’t give customers any compelling reason to stay.

The industry needs something more progressive, Perretta says. It’s about giving the customer as much information as possible regarding the claims and repair process so they can make better decisions. “The more information you can provide about your shop, the more likely the customer is to stay.”

“The industry has changed,” says Hamby, who now brings customers on shop tours, shows examples of the shop’s work, and thoroughly explains the entire repair process. Customers want to understand the value you can offer and what makes your business better than the shop down the street.

Understand the Customer

Too many shop operators automatically assume customers will do business with them simply because they’re walking in the door, Perretta says. Given that the average closing ratio hovers around 50 percent, that’s clearly not the case. Understanding your customers can help you identify sales strategies and communication tactics to best serve their needs.

Nick Gojmeric, owner of Collision Plus Auto Body Repair Centers, which has four locations in Illinois, says he bumped his closing ratio from the mid-40s to 81 percent by taking time to understand the needs of his customers.

A customer came into Collision Plus a few years ago with a banged up car. An estimator went out to the vehicle, wrote up an estimate, and told the customer to let the shop know what he decided to do.

It turned out that the customer didn’t even want an estimate, Gojmeric says. He just wanted to schedule a repair, but the Collision Plus crew had no way of knowing that, because they hadn’t asked.

“You have to find out the customer’s needs, and what they’re looking for from your shop,” Gojmeric says. “That will help you frame your sales strategy in a way that’s pertinent and valuable.”

Wheeler says a good sales person should understand the customer’s needs within a matter of minutes, and should focus sales communication around those things.

That’s what Hamby does. Most of his customers simply want a sense of comfort, because they’re often afraid of the body shop experience.

“Customers are afraid of getting ripped off, afraid the shop will ruin their car, afraid of the financial consequences associated with the repair, and afraid of irreparable damage to their vehicle,” Hamby says. “Fear is countered with faith; show empathy, and show the customer how you can help them.”

Perretta says customers are looking for a fast repair, thorough explanations of the process, and guidance throughout the repair. “When the customer feels you doing that, they buy more.”

 

The Art of the Sale

The collision industry is taking a more assertive approach to sales, says Wheeler, who has delivered sales training to more than 600 shops and 1,200 management-level shop employees. Larger shop chains are getting better and better at the consultative approach, training their employees so they have more focus on sales metrics than in the past. That puts even more pressure on smaller shops, competing against the multi-shop organizations in the market, to capitalize on every sales opportunity that comes their way.

Create a sales environment. Wheeler says most shops are set up like “paper processing centers rather than sales centers.” A sales atmosphere should have professional brochures, music, and strategically arranged tables. Sit at a round table and have the sales person sit at a 45-degree angle to the customer, Wheeler says. This creates a friendly and personal relationship with the customer.

“Sales in today’s industry is a team approach; securing
the job is the responsibility of every employee
who interacts with the customer.”
—Ron Perretta, owner, Professionals Auto Body

Keep customers involved.Wheeler suggests not leaving customers in the waiting area while you process their information. “After you build a connection with the customer, you create a disconnect when you leave them alone,” Wheeler says. Bring the customer to your desk and chat while you process their information.

Create a set of sales materials. Have materials that show your quality of work and illustrate why your shop’s expertise is worth paying for, Wheeler says. When people can see your shop’s quality, they understand the value of choosing your services. Wheeler suggests creating brochures and putting work examples on the wall.

Ask for the sale. Wheeler says asking for the sale is the most important tactic for closing deals. He has mystery shopped 800 collision facilities, and found only 4 percent of them actually asked for the job.

Kevin Wilson, owner of Wilson Auto Collision, has made “the ask” his habit. The first question he asks every customer is, “Are you going to have your car repaired here?”

“It lets them know we mean business,” Wilson says. “If they answer ‘Yes,’ it makes customers feel locked into the sale right off the bat because they feel like the repair process is already underway.”

Wilson credits this tactic as the main driver of pushing his closing ratio up eight points, to 98 percent.

Use the “assumptive close” strategy. Assume that people want to do business with you if they walk through your door, Wheeler says. Don’t ask, “Would you like to do business?” Ask, “When would you like to do business?”

Track your statistics and discuss them with the customer. Use your strong key performance indicators to differentiate your shop from the competition, Perretta says. Discuss your shop’s cycle time, touch time or CSI scores with customers. Those metrics can be used as selling points so the customer understands—quantitatively—why your shop is better than the rest.

Sell, or Be Sold

A lack of sales skills is one factor that has been causing collision shops to close at a rate of 6 to 10 percent each year, Perretta says. Shop operators who want to keep their doors open need to let every employee know that sales is part of their job—especially front office employees who have direct contact with customers.

“Sales in today’s industry is a team approach; securing the job is the responsibility of every employee who interacts with the customer,” Perretta says.

Hold your shop employees accountable for encouraging the sale. Watch and listen to your employees work, Wheeler says. Once people know you’re actively watching their results, they tend to perform better.

Of course, that’s not always an easy task, Hamby says. He found it was quite difficult to put his customer service representatives in a sales position. (For tips on transforming front office staff into a sales force, check out “Everybody Sells.”)

“We had a lot of resistance from employees who were unwilling to accept the fact that their role in the shop had to change,” Hamby says. His shop experienced 80 percent turnover in the front office after implementing processes that focused on landing more sales.
“Turnover is tough, but shop owners have to appreciate the need for change,” Hamby says. “And they have to find employees who have enthusiasm for change.”

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