Charles absolutely wanted me to share some sales tips for collision shops with you. Our observations in the field indicate that sales are often neglected in Canadian body shops.
Charles has visited over 700 shops and we come to the same conclusion. In this article, we offer 5 tips to help improve this aspect of your shop.
You obviously make sales, but in collision shops, sales and their optimization generally remain untapped.
While there are some very good players who stand out, I’m always impressed to see entrepreneurs with such limited sales culture. This is typical of our market.
To illustrate this, let’s start with a recent anecdote.
True Story
Charles is sitting in a waiting room at a collision shop.
A lady brings her car in for a repair and talks to the customer service agent.
My hood got dented by stones, can you include that in the repair?”
The agent answers:
No, this is not covered by the insurance since it’s not related to your accident.
The lady tries again:
The damage from the accident is right next to the one I got from bumping into a garbage bin with the car. Can you include that? It’s only cosmetic.
No, madam, it’s not related to your accident.
The lady leaves with a loaner vehicle. Charles takes the opportunity to go and see the car she left in the shop’s yard. The windshield is cracked, and it doesn’t seem to be linked to the accident. The shop where Charles also has a glass repair and replacement service under the same roof.
Here, the body shop contractor has just let slip, three times in less than 5 minutes, nice dollars that would have increased the profit margin of this repair significantly, without much effort.
Why Care About Sales
For many Canadian collision shops, the bulk of their work comes from insurance companies. In our opinion, many perceive the business opportunity to be limited to the accident covered by the insurer, when it is not at all a finite relationship.
In fact, it’s the beginning of an opportunity that will not only boost your margins for each repair file, but also provide the best possible service to customers who come knocking on your door.
Body shops often ask us why they make less money than others. There are usually three main reasons:
- The quality of vehicle appraisals.
- The ability to make full sales.
- The quality of shop capacity planning management.
The first two points relate to sales. The first one aims at obtaining as many billable hours as possible for the accident and find all the previous damage that will be used for the second point; making complete sales.
Here are some tips on how to increase your sales at the shop.
Tip 1: Know the Different Sales Opportunities, Upselling and Cross-Selling
Upselling: inviting the buyer to purchase the same good or service, but of better quality at a price.
Example for a collision shop: the insurer doesn’t cover the blend. Without it, the repair will leave a significant visual mark. The collision shop can therefore offer a price for the blend.
Cross-selling: inviting the buyer to purchase a good or service while selling related products or services.
Example for a collision shop: As in the anecdote at the beginning, if you replace or repair glass and a customer wants a fender repaired, nothing is stopping you from offering to replace or repair their windshield if it is damaged.
Of course, don’t forget to set your price. Don’t hesitate to be creative with your promotions. You can even use this thinking to attract an accident-free clientele to offer a factory-like paint refurbishment, including chip and scratch correction, urethane coating, warranty, etc. You can diversify your sales mix and increase your brand awareness by adding a differentiating factor to your shop.
Tip 2: Know What You Can Sell
Here are some examples of what you can offer your clients:
- Refresh the hood by correcting chips usually caused by small pebble impacts.
- Blends not covered by the insurer.
- Polishing (the example of hitting a garbage bin in the anecdote at the beginning).
- Previous damage repair.
- Refurbishing the interior of vehicles.
- Glass repair or replacement if you have a glass department.
- Mechanical work if you have a mechanical department.
- Parts upselling, for example, if the insurer is paying for an aftermarket part, ask the customer if they want to pay the difference for an OEM part.
- Installing vinyl protection on the hood.
There are many examples and depending on your equipment and the skills of your team, you can offer a wide range of services to customers. In 2022, used vehicles are gaining value and people are keeping them longer, it’s a great time to adopt new selling habits.
Tip 3: Goals and Incentives
As an entrepreneur, identify your sales objectives for increasing the average customer’s shopping cart. Share these objectives with your team. Show them how to work as a team to complete sales (especially appraisers and CSRs). Get them used to pricing your extras. Educate them on sales and finally, give them incentives, either in direct commissions (e.g., 5% on extras) or in bonuses. In short, engage your team in the process, communicate your objectives and reward their achievement.
Tip 4: Demos
Some shops are awesome at creating demos to show customers the difference between a repair with and without blends or what a hood looks like with and without stone chips.
Some use pictures or posters, but the most daring use actual auto body parts to show customers the difference in results before choosing a service. It makes all the difference in the customers’ decision process when it is well presented during the sale.
Tip 5: Don’t Make Assumptions About the Client’s Behaviour
It’s a sale classic. If a customer is wearing slightly dirty jogging pants, we don’t offer to do a fix on their car. They look too poor. We don’t want a negative answer. In sales, our job is to get a positive answer. However, to achieve our goal, we must risk a negative answer.
Allow me to paraphrase Wayne Gretzky who said that you miss 100% of the shots you don’t make. This rings very true in sales.
A customer’s car may mean more to them than they think. They may be able to afford more than you think, even if they were a bit grouchy when they had to pay the deductible. Don’t be fooled by appearances and ask customers the right questions.
In short, selling is a skill, and like any skill, getting good at it requires discipline. One discipline is to always ask. The convenience store clerk who offers lottery tickets to everyone is a prime example of sales discipline to increase an average shopping cart.
Conclusion
At the time of writing, the collision market is experiencing a shortage of parts and labour, making it difficult for shops to get organized. Their profit margins are being hit hard by this crisis. Improving your sales skills will keep your head above water and when the market returns to normal, you will be a true shooting star in terms of profitability.
—
Author: Alexandre Rocheleau
Collaboration: Charles Aubry
Translation: Sophie Larocque
Editing: Émilie Blanchette
