Whenever a shop approaches me looking for help with marketing, my first question is always, “What’s your closing ratio?” Because before you try to attract more potential customers to the door, you need to make sure you’re converting enough of the current “shoppers” coming to your door into “customers” who make an appointment to have their car repaired.
So if you aren’t doing so already, track your closing ratio for 30 to 60 days. If you write 100 estimates and get 60 of those jobs, you have a 60% closing ratio. And if your closing ratio isn’t 85% or better, you need to focus more on “selling” than on “marketing.”
Think about it: Let’s say you have a 65% closing ratio and you currently have annual sales of about $2 million. You can quickly estimate your potential sales from all your estimates is about $3.07 million ($2 million current sales divided by 0.65 closing ratio). If you could nudge up your closing ratio by capturing just 10% of those lost sales, you’ve added $307,000 to your annual sales without spending a dime more on marketing.
But to do this, it’s not enough to know just your closing ratio. You also need to know WHY people didn’t schedule repairs with you. What was their reason, their objection?
It could be because they felt they need to get multiple estimates. It could be because they need to check with their spouse. It could be because they think your shop is too expensive, or because their insurer told them you are hard to work with. It could because they need a loaner car or want their deductible waived. Track these objections either manually or with your shop management system.
Here’s why: In my shops, we were determined to keep our closing ratio high, to let as few of the potential jobs that came to our door get away. So once a month, I’d bring the office staff together and we’d look at our closing ratio number. We’d also look at the reasons we weren’t able to get potential customers to schedule appointments for repairs.
We’d then brainstorm what we could do to overcome the objections we were hearing. We’d use those discussions to build sales scripts and training that address those objections, one at a time. Then we’d roleplay the scenarios so they could practice and learn how to overcome those objections.
If the objection was that another shop has a loaner car, for example, we’d make sure the potential customer knew we offer them free pick-up and delivery within 10 miles of the shop, and estimators could extend this range based on the job. We’d make sure they knew we could coordinate a rental they could pick up and drop off at the shop. We’d offer to contact their insurer if they weren’t sure if they had rental car coverage or not. We could offer them some mass transit passes, or as appropriate, take advantage of some of the free rental days our rental car vendor offered us.
We built a whole series of these types of responses for a variety of different objections we encountered. While I think going through this process with your own staff is a valuable exercise, you can also download the “Overcoming Objections” document we developed at my shop from the “Forms, Tools and Links” section of my website.
So before you pour dollars or effort into marketing to get more potential business to the door, measure how much of that potential business you’re capturing. And if it’s not 85% or better, put some effort into helping your team overcome the objectives they’re hearing.
Mike Anderson