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Tuesday, 06 August 2013 01:04

Still Using a Quota System For Consumer Sales?

Written by Tom Franklin

I was surprised recently to learn of a shop that still uses sales quotas.

As a professional in marketing and sales, I am very familiar with quotas, and the pros and cons of the practice. It’s likely that the various sales reps that call on collision repair shops, selling everything from computer systems, estimating software and spray booths to frame machines, are expected to meet sales quotas. It’s also likely that at the end of the month when a rep is still way under his or her quota that some drastic measures will be taken to force yet one or two more sales. That’s just the nature of using a sales quota system.

But I had to ask what a collision shop sales person could do to close more business for the shop at the end of the month? Earlier in the month he or she could have gotten on the phone and called prior customers, or placed more follow-up calls to prospects who brought in their vehicle and didn’t leave it to be repaired. Or when the shop has dealership connections, the sales rep could push hard on the dealership service drive for collision work. But at the end of the month, the story would only be told with closed tickets. What could he or she do to push that up to meet a quota?

I talked to one rep who said the game begins when a customer brings in a car to be repaired. The aggressive rep on quota barely waits until the customer is out the door before he or she is on the phone to the customer’s insurance company to get an adjuster out to look at the car. If the company says five days, he or she immediately contacts the customer to call and push his or her insurance company to get out to see the car in three days or less. The rep also pushes for a quick teardown to expedite the parts orders and avoid supplements.

If the end of the month is coming quickly and some of that rep’s vehicles have still not been completed and closed out, the rush is on to find out why not. Delayed delivery of parts is a hard problem to overcome, but supplements are a different story. I was surprised to learn that a shop owner willing to work with this kind of quota pressure would permit a rep to go the customer to approve a supplement if the insurance company is holding back on it. When the job is completed if the insurance company hasn’t paid for the supplement, the customer will get the bill. Now the aggressive rep has to convince the customer that he or she will be able to collect back from the insurance company eventually.

So here we arrive at why few shops allow this kind of last minute quota pushing. A customer who is pushed to authorize supplements and collect back from his or her insurance company may not choose to use this shop again. It was obvious this shop owner put the highest value on quotas and profits, while another might do everything possible to not irritate a customer. I could see that this shop is highly profitable and capable of bringing in plenty of jobs without worrying about retaining every customer in the long run. I could also see why many shop owners would shy away from using quotas, but might there be a way to do it without irritating and possibly losing customers?

A long history of successful companies using sales quotas says they serve an important purpose. Sales reps are strongly motivated by sales contests, sales bonuses, commissions and more. Even the mention of quotas when hiring a rep will tell an owner whether or not this person can work with that kind of pressure. Many cannot and it’s best to determine this as soon as possible. The pressure of having to meet a quota will probably drive a laid-back employee crazy but an aggressive sales type will thrive on it and draw on a depth of ingenuity to bring in or close business that otherwise could have slipped away.

After this conversation about quotas, I asked a few other shop people whether or not they used quotas in their shops. No one else I spoke to used them, but there was often a greater emphasis on targets and  team closing. It seemed to me that individual quotas could be difficult to manage in most collision shops, but given the new emphasis on lean processes and team production, I think there is definitely a place for some sort of target or quota system.

At first glance this might not seem applicable to a small, independent shop but perhaps that’s where it may be needed most to “light a fire” under sometimes complacent estimators and owners who now have to compete in a much more ruthless collision repair marketplace.

Read 2268 times Last modified on Wednesday, 14 December 2016 17:50