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BDC Averages.

Hi Doug,

Playing Devil's Advocate (or am I?)

What if I told you that the Sales Floor of tomorrow will be 90% what we today call BDC and only 10% Salespeople?

Think on this model: Customer Service Reps (90%) and Product/Delivery Agents 10%.

If I was starting a dealership from scratch today, my "floor" would be filled with Customer Service Reps with excellent writing skills and phone personalities. Honestly, they probably wouldn't be on the "floor" at all, as it's easier to remotely employ college students, stay-at-home mom's etc. These would be the only commissioned agents in the company -- they are commissioned to deliver traffic.

Store employees know where to find the keys, enter data, complete paperwork, and deliver units. Each is equipped with a pad or smart phone to look-up product related questions. (I was in Williams Sonoma over the weekend buying cookware -- had a lot of questions. The clerk used her iPhone and an in-store communication system consisting of a microphone and earpiece to answer every single question. I bought on the spot). As long as the in-store people don't get in the way (talk customers out of a sale), they are perfectly functional.

Think of the traditional model -- why people came to the store -- and seriously ask yourself why people come to the store today.

The bottom line: 80% of this game is now won or lost before a customer steps through the door. I'm going to emphasize managing to the 80%.

{EDIT -- looks like this sentiment was already broached -- and beaten -- guess I should keep reading before writing...}

One area where we are in total agreement is the "80% of the game is won or lost before a customer steps through the door". That is exactly why I want my front line to be highly trained, experienced and motivated professionals. Your experience with Williams Sonoma isn't out of line but what if the salesperson can answer all of the questions without needing all of the technology?

At my last store, in Dallas, we had a dozen ISMs which was a third of the sales force. They delivered 70% of the sales. Their average total gross was much higher. The customers were in and out of the store in half of the time and the closing ratio was phenomenal.

Reading through this thread, I think that some are following a Walmart model. Be careful of what you wish for. Minimum wage employs and marginally paid supervisors is not something that I would have ever wanted to be a part of.
 
Reading through this thread, I think that some are following a Walmart model. Be careful of what you wish for. Minimum wage employs and marginally paid supervisors is not something that I would have ever wanted to be a part of.

As vehicles become more commoditized, so goes the process, and the only differentiation you may see is the difference between a Walmart and a Williams-Sonoma.

It's already happening.
 
John,

Yes, our products have become a commodity and there is much less product loyalty.

How do you make money, in the car business, especially with new cars? The key is leasing, under allowance, selling accessories and optimizing F&I.

After Chrysler's first bailout, Lee Iacocca said, "The future of Chrysler will be determined at point of sale". I was the GSM of a Dodge/Nissan store. A week didn't go buy where Chrysler District Managers were not in the showroom doing walk-around presentations. Trust me, it wasn't easy selling Dodge K cars, Rampages or even the old style Dodge trucks. That store built an exceptional sales force and became the volume store in the zone for Dodge.

To the point: you are not going to make gross or be a market leader with 9 unit/month "average" salespeople in the internet economy. They take the direction of least resistance.
 
HI Doug,

The simple answer? You're not going to make money in the car business like you did in the past. Fight it, hate it, deny it, turn a blind eye -- honestly, it doesn't matter. The model is changed, and continuing to evolve (or devolve, depending on your point of view).

One thing is for certain: you cannot look to the past to find the answer here. Dealers will still make money - franchises still have value. But the writing is on the wall for high-priced talent on the floor.
 
Your Front line will determine your Value in that 3 second window of opportunity to Impress. No doubt technology is driving the future of sales but not from a perspective of knowledge, that is what eCommerce retail is all about. Car buyers are not looking purchase their car online they are looking at increasing their knowledge of the purchase using Technology because the days of "hopping into the Family car with Dad and riding around Dealership t Dealership on a Saturday" no longer exist.

Buyers are ARMED with information when they hit your showroom and your Sales People better be prepared to VALIDATE what they may already know and walk them through the best choice for them.

...Also after the sale activity is SOOOOO Important. Dont take their money and push them out the door. This is another quality of a GREAT Sales Person and is the main ingredient for referral and repeat business.
 
HI Doug,

The simple answer? You're not going to make money in the car business like you did in the past. Fight it, hate it, deny it, turn a blind eye -- honestly, it doesn't matter. The model is changed, and continuing to evolve (or devolve, depending on your point of view).

One thing is for certain: you cannot look to the past to find the answer here. Dealers will still make money - franchises still have value. But the writing is on the wall for high-priced talent on the floor.

John, only a small percentage of dealers are market leaders and the rest are but average or subpar. Is it more difficult to make money, Yes! It still can be done if you assemble the right team around you.

Your Front line will determine your Value in that 3 second window of opportunity to Impress. No doubt technology is driving the future of sales but not from a perspective of knowledge, that is what eCommerce retail is all about. Car buyers are not looking purchase their car online they are looking at increasing their knowledge of the purchase using Technology because the days of "hopping into the Family car with Dad and riding around Dealership t Dealership on a Saturday" no longer exist.

Buyers are ARMED with information when they hit your showroom and your Sales People better be prepared to VALIDATE what they may already know and walk them through the best choice for them.

...Also after the sale activity is SOOOOO Important. Dont take their money and push them out the door. This is another quality of a GREAT Sales Person and is the main ingredient for referral and repeat business.

Two very different perspectives in the last two posts.

I want salespeople that want to stay around long enough to get repeat and referral business. In the days where the family jumped into the car to shop for a car ...those were "shoppers" where today's customers are "buyers". The shoppers were far harder to close. They didn't know what was out there and had a legitimate reason to continue to look.

Customers only shop 1.2 to 1.3 dealerships before purchasing a vehicle. What is your closing percentage, on your sales log, (not directed towards Joey)? Do the math. If it is 20, 25 or 30%, you are missing sales. There is nothing like a green pea to suck the enthusiasm away from a motivated buyer. I was in a dealership, today, where a young, poorly groomed, salesperson approached me with his hands in his pockets. Seriously, do you need to know what he said? I can't tell you. I wasn't paying attention.
 
The model is changed, and continuing to evolve (or devolve, depending on your point of view).

:iagree: and so do all the dealers I regularly communicate with. The interesting thing is the number of proactive Dealer Principles who are taking a deep gaze into their service operations. In the past 3 months I have heard more DPs tell me things like "all my future opportunity is in service" and "sales had its day; service is tomorrow." I like to think of these individuals as being years ahead of the curve. And no, to that last quote, was he implying sales is over. He was saying that he would prefer to invest more in his service departments than his sales departments.
 
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The interesting thing is the number of proactive Dealer Principles who are taking a deep gaze into their service operations. In the past 3 months I have heard more DPs tell me things like "all my future opportunity is in service" and "sales had its day; service is tomorrow."

AMEN!

Being a GM store, our new car profits are gone. Do you belong to a credit union - GM preferred pricing for you! Is your sister in law's 2nd cousins Uncle Ed a past GM employee - oh boy, GM preferred pricing for you family guy? Can you breath and sign your name - wow genius, GM Preferred pricing for you!

Recently I heard that past GM CEO, Akerson, asked his team how many dealers are profitable, the answer was something like 68%. When he asked if you took away the SFE and EBE programs, the number drops to below 40%. OUCH.

Service is the future for sure. GM may be close to requiring service BDC's in dealerships I hear.
 
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Recently I heard that past GM CEO, Akerson, asked his team how many dealers are profitable, the answer was something like 68%. When he asked if you took away the SFE and EBE programs, the number drops to below 40%. OUCH.
I talked to a friend that works for a very good import store in Dallas. They just came off of their best December, ever. He was talking about net profit in new and used car sales. Knowing these people, their fixed operations are very strong, too. For the record, they don't have a BDC and will not hire anyone without serious, documented experience. They also pay very well.
Unless they have changed, Classic Chevrolet (Grapevine, TX) doesn't use a BDC and only hires experienced hands. They have been the volume Chevy store in the nation for years. That place mints money, pays well and has a waiting list for people. They close at 6:00 on Saturdays and if you are not on the F&I log at 6:00, you finish your paperwork on Monday.

With the sales numbers that the domestics are putting out, they better figure this out before sales head south.
 
I talked to a friend that works for a very good import store in Dallas. They just came off of their best December, ever. He was talking about net profit in new and used car sales. Knowing these people, their fixed operations are very strong, too. For the record, they don't have a BDC and will not hire anyone without serious, documented experience. They also pay very well.
Unless they have changed, Classic Chevrolet (Grapevine, TX) doesn't use a BDC and only hires experienced hands. They have been the volume Chevy store in the nation for years. That place mints money, pays well and has a waiting list for people. They close at 6:00 on Saturdays and if you are not on the F&I log at 6:00, you finish your paperwork on Monday.

When the asteroid hit, do you think all the T-Rex's were gone in an instant? Or were there a few that hung-on, and lived the Good Life for a few more years?