I often get phone calls from shop owners saying something along the lines of, “Hey, Mike, I need more work in the shop. Can you help me?’
The first challenge I pose to them is, “What’s your closing ratio? Because it won’t do you any good to get more work in the door if you’re not tracking and maximizing your closing ratio.”
Closing ratio, of course, is a measure of what percentage of the potential work that comes to your door you’re currently capturing. If you write 10 estimates and get six of those jobs, you have a 60 percent closing ratio.
I was thinking about this concept recently when I talked with a friend of mine, Ginger Mumpower, who owns Ginger’s Jewelry in Roanoke, Va. I asked her if she tracks her employees’ closing ratios. I wasn’t at all surprised to learn that she did, but she added, “More importantly, we track their turnover.”
Turnover? My first thought was perhaps she was talking about when a customer turned over some jewelry and bought more. I asked her what she meant.
“I track how often my salespeople turn over a customer to another salesperson,” she said.
Now I was totally dumbfounded. As in most sales jobs, I knew Ginger’s staff was paid on commission. Why would one salesperson turn a customer over to another? And how does tracking that help the business?
“Let’s say a customer comes in and want to buy a ring, but you as the salesperson don’t feel you’re connecting with that customer and it seems like he may leave without buying anything,” Ginger explained. “We track how often you turn that customer over to another salesperson who may be able to connect with the customer in a way you weren’t able, giving us another shot at the sale.”
It dawned on me that new car dealerships use this tactic all the time, turning over a potential customer who won’t quite commit to a sales manager who works to connect with the customer and close the deal.
So I started to think about how this idea applies to our industry. When my Dad and I were the shop owners, we initially could interact with every single customer, and our closing ratio was great because we were passionate about our business, and that came through when we spoke with customers.
But as business continued to grow and eventually expand to a second location, we couldn’t possibly reach out to every customer. Increasingly, shop owners who used to fix 50 cars a month and were able to interact with every customer are now repairing 200 cars a month, maybe at two locations. They just can’t connect with everyone, as much as they might like to.
That’s where turnover might help. If a customer is getting ready to leave without committing to let your shop fix their car, your estimator might want to excuse themself and bring you out.
“Mike,” the estimator might say, “This is Mr. Smith who owns the Volkswagen out front and is thinking about getting it repaired here. He’s considering some other shops, but Mr. Smith, I just wanted you to meet Mike, the owner here.”
That’s when you can use your passion for your business to try to win Mr. Smith over, offering him a shop tour, talking about your family’s long history at the business, etc. This allows you to maintain the tie that you enjoy with customers, but focusing it in ways that still allow you time to work ON (and not just IN) your business.
It might also be effective for an estimator to, at some point, turn over a customer to another estimator. “I noticed from your bumper stickers, Mr. Smith, that you’re involved with local softball leagues, and Joe here plays softball as well.”
Most employees, even those paid on commission, understand that this type of turnover is what’s best for the organization. I’m going to try to sell you, but if I can’t, I’m going to turn you over to someone so the shop will still benefit from the sale, versus you leaving and no one getting a commission.
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