Last month, we began a series on building a sales culture after hearing repairers are slowing down and backlogs have declined from weeks to days. The idea is to provide thoughts on implementing a sales culture within the repair centers to grow additional volume. This article will center on the benefit or value of upselling additional repairs to your current customers.
Let’s Start with Some Numbers
During the phone survey we did with 20 repairers, we found that 18 of them DO NOT actively solicit upsells beyond a simple ding or dent surrounding the damage related to the claim. The two who do upsell try periodically, but weren’t formally working on a project to enhance the upsell strategy. But fully 50% said they would be interested, given the market conditions.
Is There Opportunity to Add Value and Upsell the Vehicles for Which We Provide Collision Repairs?
A quick search on the internet yielded several independent studies reporting a range of 50-75% of vehicles on the road today have minor cosmetic damage requiring PDR or paint repair. Detail studies show that 35% of consumers would pay for a “deep clean detail” if it were convenient. So, your current customers' vehicles have opportunities to repair beyond the collision repair if you properly approach the topic.
Ryan Taylor of Body Shop Booster recently did a survey for Toyota. They found 41% of the vehicles in the service drive have legitimate minor cosmetic damage which could be repaired. Could you use an estimating platform like Tractable or CCC Jumpstart to write a basic estimate, and then use AI from Body Shop Booster (or similar) to solicit the sale on these repairs? It could add quite a bit of volume from dealer accounts.
Why Would a Customer Pay to Have Minor Cosmetic Repairs, PDR or Detailing Completed?
In the case of a collision repair, these repairs to dings and dents “add-value” to the vehicle. When I queried the couple of shops who did have success with upselling, they got reassurance by discussing the topic with a friendly new or used car manager and asking them about the improvement of vehicle value for various types of repairs. This affirmation can really improve your confidence and credibility when having these conversations.
Example: A three-year-old Toyota Highlander with scuffs and paint pitting on both bumpers might be worth $17,000. But with those areas repaired, the same vehicle might be worth $18,700, a $1,700 premium with a $600 (for example) cost to repair. That’s $1,100 net added value!
So, when asking the customer if they would like you to offer a price to repair these things, they can often confidently say, “If you’re considering trading the vehicle, repairing these things will definitely add value to your vehicle. Generally, the additional vehicle value is significantly more than you will invest to complete the repairs.”
What Additional Benefits Might You Use to Sell This to the Customer?
Depending upon the vehicle and the owner's view on the value or image of a vehicle, some customers take pride in a clean, well-maintained vehicle. Therefore, they are willing to either invest money in their current vehicle, or they begin looking for a replacement vehicle. If we can make them feel good again about the vehicle they own and drive by “deep-clean-detailing it” or repairing the cosmetic damage, then they save quite a bit of money by NOT buying a replacement vehicle at this time. AI from Body Shop Booster can ask for the sale even after the vehicle is scheduled in for repairs; you may want to consider using it to assist your sales efforts. In a sense, the repairs and a deep-clean detailing make them fall in love with their vehicle again.
What Types of Services Might You Offer?
There are endless possibilities for what to potentially upsell, but here are a few of the most common options:
- Offer to have your PDR sublet provider attempt to remove dings and dents
- Repair minor dings, dents and scratches.
- Restore headlamps which have hazed or faded.
- Offer a “deep-clean” detail of interior (and in some cases engine bay/trunk); special tools (generally low cost) can really aid in this effort.
- Additional accessories can also be sold, such as ceramic coatings, bed liners, clear film, custom floor mats, and more.
They Will Seek a “Deal”
These repairs are most often customer-paid, and we know that many of these customers are somewhat price-sensitive. Therefore, they want to perceive they are getting a “deal.” There are a couple ways to convey your pricing flexibility:
- Writing at a higher customer paid rate (for example $85) and then offering to discount back to the insurance rate (for example $60, a 41% discount) is a solid way to entice them.
- Reinforcing the fact that having these items repaired “while you’re here” saves the shop administrative and shop time; therefore, you can offer a X% discount at the time of the collision repair. If you came for just these repairs, the cost would be $500, but if we can complete them “While you’re here,” we can complete them for $300.
Why Might You Offer a Discount for Completing These Repairs “While You’re Here”?
Nobody wants to discount, but we all realize that the costs and expenses are less for vehicles repaired “while you’re here” versus coming in for a dedicated upsell repair.
Why?
- The RO file is already set-up
- The appointment is confirmed
- Vehicle is checked in
- Vehicle is already in repair planning
- Vehicle is already in the body stall for repairs
- Vehicle must go through the paint flow line (it’s taking up a booth cycle)
- Vehicle will be in reassembly and will need to be washed and vacuum-detailed either way
Therefore, upsold repairs generate additional labor hours and labor gross margin with very little marginal cost. Examples:
- PDR – we will make our mark-up for these repairs and the prompt-pay discount – Example: 27%.
- Body or paint upsells – we will make 60-65% on the labor gross.
- Detailing – We generally pay the detailer hourly, so any sales are 100% profit. Some repairers pay the detailer 10-20% for customer-paid detail jobs to incentivize them to do it well and get it done to not slow deliveries.
What Incentive Do the Technicians Have to Complete These Repairs?
I know it sounds odd, but it’s easier to have upsold the ding and dent repair and fix it properly, then to try to work around them. The technicians can perform a proper repair on blend panels and painters don’t have to paint over a chip which will look bad and may someday be a point of warranty failure.
Further, as mentioned previously, the body and paint teams will get paid flat rate hours for those additional repair hours or your hourly-paid staff will get credit for completing the hours towards their hourly incentive (if you offer one).
What Incentive Does the CSR / Estimator Team Have to Upsell?
Beyond feeling good when returning the vehicle to the customer with the added-value completed properly, completing the repairs generate additional margin dollars, some of which can be paid to the estimator to incentivize them to ask for and earn the added-value upsells.
The challenge is, our estimators are very busy people, meeting customers to understand their needs, performing advanced inspections, checking in vehicles, performing OEM research, documenting the repair plan, ordering parts from multiple sources, handling supplement requests, communicating with the customer, delivering the job, closing ROs, and even collecting money. They work hard to earn their wage based on workload and gross margin incentives they may be earning. The shops we interviewed agreed that a (for example) 10% straight commission for dollars sold would be a fair way to compensate the estimator for completing these sales.
A simple way to track these sales is to create a simple form for them to log the RO, the item upsold, and the dollar amount of the additional customer-paid lines on the estimates they have sold. These lines need to be noted on the final bill and referenced in the notes screen per file. At the end of the pay period, take the value-added upsell gross sales growth multiplied by, say, 10%. If they sold $2,000 in added value upsells, then they would have $200 added to their paycheck for that period.
Simple Sales Process for Added-value Upselling
The process is quite simple:
- When you first meet the customer, ask them how long they have owned the vehicle and if they plan on trading it in the next year. This gives you insight into their plan for the vehicle.
- As you inspect the vehicle, ask for them to opt-in to allow you to offer them a price for completing repairs for unrelated prior damage or a deep-clean detail.
- As you sit and create the advanced inspection report and document the price for the added value upsells, explain how you think what they invest in repairs will be more than offset in the added-value the vehicle might have at trade-in or sale.
- Present the “package” for just the collision repair and then the incremental costs for the added value upsell repairs “while you’re here.”
- And then ask for the sale by saying “which package would you be interested in scheduling for repair with us today”?
- Log the sale.
- Complete the sale.
- Collect the additional sales.
- Pay the incentives to your staff and enjoy the financial fruits of their labor!
Summary
Implementing a sales culture within the company continues to refine the selling and service skills of the CSR and estimator team within your repair center. The suggestion is to refine the rapport-building skills to include learning about the long-term plan for the vehicle, then asking permission to inspect areas which have minor cosmetic damage or opportunities to “deep clean.” Role-play examples of how they could price a “while you’re here” repair versus a standard repair. Then, in periodic meetings role play the explaining the upsold repairs and the added value and then asking for the sale. Doing this added value upsell process could result in you growing your sales and gross profit, without processing more vehicles through the door!
