You grew your business with an eye on the uncompromising standards of quality in the repair of your customers' cars. Constantly training to use a wide range of tools – combined with owning the right tools – is, in most cases, how you built your repair volume. That could be equated to the production infrastructure, and most of us understand the clear need to be vigilant and efficient in production. But what about taking the right approach to success in the front office?
How often do you take a good look at what happens from the first point of contact with a prospective customer to the point you hand them back their keys? Have you evolved this process as often as you have the repair process? After all, customers today have changed as much as their cars have.
The process begins with a phone inquiry and is typically followed by a customer visit, and includes everything from the estimate to the repair appointment to the actual repair. All three of these areas need to be measured and effectively improved.
In the past, we have talked about estimating as a sales process with equal parts repair planning and sales. The national benchmark for retaining an estimate is 67 percent. In the most basic terms, you fix 6.7 cars for every 10 estimates you write. A quick refresher for you on key performance indicators: average repair order equals $2,450 times a gross profit margin of 42 percent and results in a gross of $1,029 per car. Monitor the close ratio and set a manageable goal of a 10 percent improvement.
Years ago I attended a phone training seminar and, at that time, the combined cost in advertising and marketing to make the phone ring was $25 per call. Think of what it costs and what you would do to drive one more car a month into your shop. Now, think about that every time you answer the phone. Do you ask the right questions, get the customer's name and information and set an appointment on that call? If not, why not? The opportunity lost is just as expensive as the side marker lamp that disappeared in vehicle re-assembly; the only difference is, you wrote a check for a new side marker lamp and the missed repair opportunity stole the money out of your wallet.
Create the repair plan tailored to your customer using the best technology available. Look closely at customer pay work – it now makes up almost 20 percent of the work today. Remember that this process we live and work with every day is quite foreign to most of our customers. Many have never had need of our services and are intimidated by what may seem logical to us. The average customer visits a mechanical shop four times a year, but a collision shop only once every seven years
Follow up with appointed customers and make sure they know when their appointment is. Verify the information and offer additional conveniences they may wish to take advantage of, from rental cars to pick up and delivery service. Thank you letters and appointment-reminder post cards after the estimate also work great to keep the customer coming back with their keys.
Manage the first point of customer contact all the way to getting the final payment as a single sales cycle with three distinct parts. By now, you probably know that improving the close ratio 10 percent means very little if you are ineffective in getting the prospect off the phone and in your front door.
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