In previous columns I've focused on the estimating process as a key driver for sales revenue and profit. Understanding the importance and getting comfortable with the mechanics of selling as an essential part of collision estimating that will raise close ratios.
Building a great repair plan with your estimating software is what fixes the car, but the more intangible process of getting the customer's keys is pure sales. The two disciplines may seem to be diametrically opposed until you put them into practice.Understand that when you're good at both parts analytics (damage estimating) and qualifying (sales), the process flows back and forth – one feeding off the other. Greeting the customer, filling out repair information, talking with the customer as their vehicle damage is being assessed, engaging in conversation about what happened, and walking the customer through what the car reveals about the damage all happens before you sit down to create an estimate.
National average close ratios run 67 percent, which translates into shops fixing less then seven cars for every 10 estimates they write. In addition, today's average repair order (ARO) costs $2,450. If you write 10 estimates per week, what would just one more car do to your bottom line? One ARO a week at $2,450 equals $127,400 per year in gross sales. With a target of 41 percent job cost profit, that is a gross job cost profit of $52,234 per year.
Focus on one more car a week, and the math works no mater what your current close ratio is. Do you know your shop's closing average? As a point of reference, I have trained estimators to achieve an audited close ratio, cars in the door, of better then 90 percent, and have tracked results going back to 1991. Let's take a look at a few key points used to raise close ratios over the years.
Greeting the customer – This sounds standard but consider that getting the right information up front will allow you to get the keys later. Have you ever fielded a phone call asking for a price on replacing a side mirror but the caller is not sure of the options or even the car model? You know to ask for vehicle year, make and model, and to follow up with questions about power versus manual, lighted and more as required. Without that information, you can't quote a price. The same applies to qualifying the customer: who are they insured by, who's paying for the repairs, how did they hear about you, will they need something to drive when their car is being repaired? This is the time to gather facts that will help you get the keys.
Qualifying and pre-damage inspection – Review the information as you take the customer to their car. Ask them to explain what happened in the accident, and tell them that the damaged car tells part of the story, but first-hand information helps identify secondary damage. Walk the customer around the car and touch all damage related to the incident, along with what may have been there prior to it. Talk about what the car tells you and why you need to inspect more then just the primary impact point.
Creating a repair plan – You're back at your desk with the customer writing the estimate. Use your estimating software's graphics to illustrate the damage. Consider having a second monitor that the customer can see. While writing the estimate, impress the customer with the powerful color diagrams and use the graphics to explain possible hidden damage. Leverage the technology to get the keys.
Getting the keys – If you develop this process as naturally as you quote the mirror replacement price, you should already have the keys. Ask trial close questions at every step in the process. Once you get a commitment at any point, secure the job with a signed work authorization and keys or an appointment date.
Realigning the writing of an estimate from that of creating a repair plan and parts list to becoming the main driver of revenue in your business puts you in better control. What does it cost to lose an estimate? The number of cars on the road to be repaired is growing but the accident frequency rate is dropping. Can you afford to lose even one job today?
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