MANY OF MY articles have been about learning your numbers and metrics and using them to improve your processes, and above all, your profits. Understanding what your numbers mean is very important, but learning what to do to improve them is the key to this exercise.
One of the most important of all measurable metrics is the close ratio, which also is called conversion ratio or batting average. We all should understand that our close ratio is the number of estimates, or potential jobs, that come into our door, versus the actual repair orders opened because of those estimates. Basically, it's the number of estimates that you turn into real jobs.
You also should know what your current conversion ratio is, and what you want or need it to be to start to generate a profit. You must always remember as a general rule you are not in business to write estimates. You are in business to repair cars. This aspect of our industry is easily forgotten, since all of us have to write estimates every day on vehicles that we know we will never in a million years be fixing.
When you feel that way, it is human nature to put very little effort into the all-important sales portion of the estimate you are writing. Let me give you a little example that really hits home about why you should always give every customer your complete repertoire in a situation like this. After we run through this real-life example, I will break down the estimate process into smaller bites that will help you improve your close ratios.
I was an estimator in a high-line collision shop. We worked on all new luxury cars, and it was rare to ever have to write an estimate on an older, less-than-stellar vehicle.
One afternoon an older gentleman drove into the shop in a 1974 Ford Maverick. I saw the car drive in, and I wondered to myself, "What the heck is he doing here?"
He parked the car and came in and requested an estimate. He was, as I mentioned, an older gentleman, about 80. I felt bad for him. The car was rolling junk, but obviously, he loved it. I knew any estimate I would write for the damage he showed me would total the car.
I worked through the estimate, reluctantly, and handed him a copy. I never tried to sell the job, but I was at least polite.
I told a few of my co-workers about the estimate, and we all kind of chuckled, knowing we would never see him again. About a week later, he called, wanting to drop off the car for repair. I was really surprised, but I thought, it's a job, and I scheduled him in for the next day. He arrived for his appointment on time, we fixed his car quickly, and I called to let him know it was done.
He said he would be at the shop in an hour to pick it up. When he arrived, my jaw dropped. He pulled in to pick up the car in a brand new, $100,000 Mercedes. I had no clue.
He had owned the Maverick for years, and just wanted to try and keep it on the road because he loved it. He loved the repairs we had done, and I know if he ever wrecks the Benz, we will surely get the job. Had I really just blown him off, like I was thinking of doing, we would never have the opportunity to fix one of his several other cars, or any of his friends' or relatives' cars.
Lesson One: Never, ever give a customer that comes into your facility less than 100 percent effort, no matter what kind of car he or she is driving. They just might have a $100,000 Benz at home.
The estimator position is one that requires some unique skill sets. Mainly, it is a sales position, not a technical estimator position. The mentality has to be capturing the keys, not writing a technically correct estimate.
An accurate estimate is important, and is part of the breakdown, but the most important skill is sales ability. If your front line people are not great salesmen, your shop's volume will suffer greatly. As owner or manager, it is your job to make sure all your front line people have received, and are involved in, an ongoing program of quality sales training.
This type of training is available to shops through all of the major automotive paint companies at a pretty minimal cost. Check with your jobber or supplier to get your people enrolled. You can also look into sales training seminars or commercially available training like Dale Carnegie and others.
Get yourself and your staff into as many of these types of classes as you possibly can. They have no downside. They will motivate and educate your people in how to really sell the job.
Help your people understand that your customers are coming to you not for an estimate, but for help. They have damage on their vehicle, and they are going through what they perceive is the correct process in order to get that damage repaired. They do not need an estimate; they need their damaged vehicle fixed.
Your job is to tell them why the shop fixing their car should be yours, and no one else's. The training classes I mentioned will walk you through a myriad of important areas to address, but before you get enrolled in one, here are a few pointers.
- Never provide negative feedback about a competitor. Talk about how good you are, not about how bad someone else is.
- Create an atmosphere in your shop that conveys to the customer that you truly care about them and their vehicle. Ask them if they were driving during the accident; if they were, ask if everyone involved is OK. Show your concerns about the customer first and foremost over the vehicle. Showing genuine concern will help the customer feel more at ease with you personally.
- Look at the vehicle closely, gauging not only the damage, but whether or not the vehicle is safe to drive. Broken taillights or headlights, loose sheet metal parts, cracked windshields or damaged hood latches can all make a vehicle unsafe to drive. If you know the vehicle is potentially unsafe, it is your responsibility to educate the customer as to why you feel that way, and strongly suggest the vehicle no longer be driven. Knowing a vehicle is unsafe and not informing the customer in an attempt to keep them from driving it further may implicate you if anything happened to the customer or any other driver or person.
Let's say, for example, if loose parts fell off the car and caused another accident. Or if the hood flipped open while the customer was driving the car, causing another accident and/or injuries to innocent people. If you feel the vehicle is not safe, get the people out of the car.
- Educate the customer about your shop. Let them know what vehicles you specialize in or are certified in. Make them aware of your technicians' abilities and level of training. Make sure you display all your certifications and training diplomas in a very visible spot. The customer needs to know that you and your staff have sufficient expertise in order to be able to properly repair their vehicle.
- Make sure your customers know you have the equipment and are proficient in its use. Your facility has most likely spent thousands of dollars on all the sophisticated equipment you use. Explain to your customer fully and in plain English, what you will be doing to the vehicle during the course of the repair, and how it will be done using your specialized equipment. Make certain to point out the equipment that makes your shop stand out over any other shop.
- Offer to take the customer on a shop tour. The condition of your facility has to be conducive to a tour. It should be clean, neat and organized, so the customer is impressed by the appearance of your facility. Give the customer an opportunity to see examples of your staff working on other vehicles like theirs, showing them the quality of your shop throughout the tour.
Explain to the customer what is happening in the various departments. If your shop uses water-based paints, make your customer aware of that and help them to understand your commitment to the world's ecosystem. Water-based paints have many other benefits as well, but none of your customers will know them if you do not tell them.
- Show your customers some examples of completed repairs if you have some repaired vehicles available to view at that time. One look at a quality repair is worth a thousand words. A high-quality finished repair will earn you much more credibility than anything you can say about your work quality. Most people respond much more favorably to tangible examples than to words and promises. Seeing is believing.
- Offer to help the customer through the claims process. Remember, your shop deals with repair claims on a daily basis. Your customer most likely does not. Offer your expertise to help them through this trying time. Call the insurance company's 800 number, explain to the claim rep the extent of the damage and let them know if the vehicle is not safe to drive. Offer to help secure a rental car, or drive the customer home. Talk with your local rental car companies and develop a relationship with them. They may be able to help you secure a job by offering your customers better rates or services. Remember, the idea is to get the keys, not simply write an estimate.
Of course, as I mentioned earlier, a high-quality, well written, technically correct estimate is important as well. You can emphasize your expertise by going over this quality estimate line by line with the customer so they fully understand what you are planning to do to their vehicle to restore it to its pre-accident condition.
I even suggest a waiting room commercial about your shop running on a loop on the lobby television. These often are available premade from most paint companies or jobbers.
Without question, writing a quick estimate certainly takes less time than including all of the steps discussed above when a customer comes into your shop looking for help. If you were looking for a repair on anything – car, washer, dryer, bike – who would you be more likely to trust with the repair on your investment? The person who scribbles out an estimate and tosses it at you, or the one who spends time with you and sells you on their shop and service?
I think the answer is a no-brainer. The lesson here is if you make the effort and pay attention to your close ratio and process, you cannot help but get better results. Your close ratio, along with your bottom line, will improve greatly.