Do you have a BDC?

[Jerry Thibeau]

The budget I was given to hire these two coordinators didn't let me hire the caliber of coordinator I desired and thus the BDC wasn't as successful as I had hoped.

What kind of training did they get? That's normally the issue.

 

[ajholland]

Jquinn...Unfortunately, I didn't have buy in from the top to pay what I wanted. They wanted to pay a straight base salary with no bonus for appointment shows and solds. Where is the motivation for BDC Coordinators? They do all of the follow up, hand a sales person an appointment which they should close 60% of the time, and get nothing for it. It just isn't going to work.

Hi Jerry...they received lead handling training and phone training.

They were other factors at work to...for examply, when we would receive an eprice request, we would sometimes wait 2-3 hours for a manager to get back to us. At this point, I know we try a BDC again for a while. So I at least want dedicated internet consultants, I'm just struggling with the organization.

 

[Alex Snyder]

AJ - Fantastic post :thumbup: - there is a lot we can talk about. First, let's reverse engineer some stuff here. I know a lot of this won't help you with the current problem at hand, but hopefully it will give you a process for tackling future issues.

First: Figure out where the timeframe ends on consumer interest from the day they submit a new Internet lead to your stores is. To put it simply: are you seeing purchases happen from people who submitted a lead 90 days ago? 6 months ago? How far back before it begins to dwindle?

We'll call that the *Interest Timeframe*

Second: Figure out how many leads per month you're averaging. I would look at this over a 12 month period. How many leads did you receive over the last 12 months and then divide that number by 12 to get an average (I know, simple math, but I just want to make sure everyone is following along). Include phone calls if needed....if you have those stats.

We'll call that the *Average Leads per Month*

Third: Figure out your closing ratio. Simply take the number of sales you've counted with "Internet something" as the source (every dealership counts this differently) and divide that by the number of leads you've received. Again, do this for a full 12 month period. Include phone calls if needed....if you have those stats.

We'll call that the *Lead Closing Ratio*

The word track thus far: Hey boss, over the last 12 months we have sold [INSERT INTERNET SALES #] off of an average of [AVERAGE LEADS PER MONTH] per month. That equates to an average closing ratio of [LEAD CLOSING RATIO]. The national average is around 10% with best practice dealers reaching as high as 20% just on the leads alone. I don't know exactly what it is when you factor in phone calls. It appears that our customers continue to have interest in buying a car up to [INTEREST TIMEFRAME] days after submitting their initial Internet lead.

Because we know what our customers' interest timeframe is we can assume we do not have to put a lot of effort into Internet leads that are older than [INTEREST TIMEFRAME] days. That means we will need to staff to sufficiently handle at least [AVERAGE LEADS PER MONTH] plus residuals from leads that didn't buy that came in over the last [INTEREST TIMEFRAME] days. That is roughly [SALES GOAL / CLOSING RATIO] leads. I have heard that the average Internet manager can fully optimize a workload of roughly 100 new Internet leads per month. I just thought you should have those stats before we discuss budgets.

Fourth: Figure out where you want to be. How many sales do you want? With that number in your head you can use the *Lead Closing Ratio* to figure out what you're going to need to get there. If you take the number of sales you want and divide it by the *Lead Closing Ratio* you'll get the number of leads you need to get to that sales figure....technically speaking.

We'll call that the *Projected Leads Needed*

Continued word track: So boss, you've got the exact numbers I can account for. Now, let's talk about some projected numbers to help aid you in your decision. Please keep in mind that this next stat is scientific and not reality; it is purely a technicality that does not factor pay incentives or quality of personnel. I want us to get to [INSERT SALES GOAL #] per month. If we figure our current closing ratio is [LEAD CLOSING RATIO] then we will need [PROJECTED LEADS NEEDED] per month in order to get there- technically speaking. We will also need at least [INTEREST TIMEFRAME] before we can expect to see our sales goal number. Just imagine what we could get to with an improved closing ratio. We're going to need quality people who are completely dedicated to attaining this goal.

By the way, I heard from someone who has over 6 years experience in building his own dedicated BDC (some guy named Alex Snyder) who said he saw the right BDC pay was roughly the same as the average pay for sales agents. He also said he found the best way to incentivize his BDC was based on the number of outbound phone calls each one made per hour. He said that 8-12 calls outbound calls per hour produced a good number of appointments and still allowed time for his BDC to adequately handle inbound calls and Internet leads. He mentioned that some guy named Jerry Thibeau helped him figure that incentive plan out

Example numbers in word track below....

 

[Alex Snyder]

The word track thus far: Hey boss, over the last 12 months we have sold [INSERT INTERNET SALES #] off of an average of [AVERAGE LEADS PER MONTH] per month. That equates to an average closing ratio of [LEAD CLOSING RATIO]. The national average is around 10% with best practice dealers reaching as high as 20% just on the leads alone. I don't know exactly what it is when you factor in phone calls. It appears that our customers continue to have interest in buying a car up to [INTEREST TIMEFRAME] days after submitting their initial Internet lead.

Because we know what our customers' interest timeframe is we can assume we do not have to put a lot of effort into Internet leads that are older than [INTEREST TIMEFRAME] days. That means we will need to staff to sufficiently handle at least [AVERAGE LEADS PER MONTH] plus residuals from leads that didn't buy that came in over the last [INTEREST TIMEFRAME] days. That is roughly [SALES GOAL / CLOSING RATIO] leads. I have heard that the average Internet manager can fully optimize a workload of roughly 100 new Internet leads per month. I just thought you should have those stats before we discuss budgets.

Continued word track: So boss, you've got the exact numbers I can account for. Now, let's talk about some projected numbers to help aid you in your decision. Please keep in mind that this next stat is scientific and not reality; it is purely a technicality that does not factor pay incentives or quality of personnel. I want us to get to [INSERT SALES GOAL #] per month. If we figure our current closing ratio is [LEAD CLOSING RATIO] then we will need [PROJECTED LEADS NEEDED] per month in order to get there- technically speaking. We will also need at least [INTEREST TIMEFRAME] before we can expect to see our sales goal number. Just imagine what we could get to with an improved closing ratio. We're going to need quality people who are completely dedicated to attaining this goal.

Hypothetical Math to test this approach:

Let's use these numbers
INTERNET SALES #: 120 per month
AVERAGE LEADS PER MONTH: 1,000 per month
That is a 12% LEAD CLOSING RATIO
Assume that 90 days is the INTEREST TIMEFRAME
SALES GOAL is 200

Here is the word track with those numbers filled in:

Over the last 12 months we have sold 120 per month off of an average of 1,000 per month. That equates to an average closing ratio of 12%. The national average is around 10% with best practice dealers reaching as high as 20% just on the leads alone. I don't know exactly what it is when you factor in phone calls. It appears that our customers continue to have interest in buying a car up to 90 days after submitting their initial Internet lead.

Because we know what our customers' interest timeframe is we can assume we do not have to put a lot of effort into Internet leads that are older than 90 days. That means we will need to staff to sufficiently handle at least 1,000 leads plus residuals from leads that didn't buy that came in over the last 90 days. That is roughly 2,640 leads. I have heard that the average Internet manager can fully optimize a workload of roughly 100 new Internet leads per month. I just thought you should have those stats before we discuss budgets.

So boss, you've got the exact numbers I can account for. Now, let's talk about some projected numbers to help aid you in your decision. Please keep in mind that this next stat is scientific and not reality; it is purely a technicality that does not factor pay incentives or quality of personnel. I want us to get to 200 per month. If we figure our current closing ratio is 12% then we will need 1,667 per month in order to get there- technically speaking. We will also need at least 90 days before we can expect to see our sales goal number. Just imagine what we could get to with an improved closing ratio. We're going to need quality people who are completely dedicated to attaining this goal.

By the way, I heard from someone who has over 6 years experience in building his own dedicated BDC (some guy named Alex Snyder) who said he saw the right BDC pay was roughly the same as the average pay for sales agents. He also said he found the best way to incentivize his BDC was based on the number of outbound phone calls each one made per hour. He said that 8-12 calls outbound calls per hour produced a good number of appointments and still allowed time for his BDC to adequately handle inbound calls and Internet leads. He mentioned that some guy named Jerry Thibeau helped him figure that incentive plan out

Okay boss, you've got some numbers to play with. Now let's talk about how many people I can hire.

 

[kcar]

Not yet, BDC centers are worthless and expensive, unless you can manage them to their full potential.
When done right, they can be a highly valuable resource to any dealership.

 

[ajholland]

AJ - Fantastic post :thumbup: - there is a lot we can talk about. First, let's reverse engineer some stuff here. I know a lot of this won't help you with the current problem at hand, but hopefully it will give you a process for tackling future issues.

First: Figure out where the timeframe ends on consumer interest from the day they submit a new Internet lead to your stores is. To put it simply: are you seeing purchases happen from people who submitted a lead 90 days ago? 6 months ago? How far back before it begins to dwindle?

We'll call that the *Interest Timeframe*

Second: Figure out how many leads per month you're averaging. I would look at this over a 12 month period. How many leads did you receive over the last 12 months and then divide that number by 12 to get an average (I know, simple math, but I just want to make sure everyone is following along). Include phone calls if needed....if you have those stats.

We'll call that the *Average Leads per Month*

Third: Figure out your closing ratio. Simply take the number of sales you've counted with "Internet something" as the source (every dealership counts this differently) and divide that by the number of leads you've received. Again, do this for a full 12 month period. Include phone calls if needed....if you have those stats.

We'll call that the *Lead Closing Ratio*

The word track thus far: Hey boss, over the last 12 months we have sold [INSERT INTERNET SALES #] off of an average of [AVERAGE LEADS PER MONTH] per month. That equates to an average closing ratio of [LEAD CLOSING RATIO]. The national average is around 10% with best practice dealers reaching as high as 20% just on the leads alone. I don't know exactly what it is when you factor in phone calls. It appears that our customers continue to have interest in buying a car up to [INTEREST TIMEFRAME] days after submitting their initial Internet lead.

Because we know what our customers' interest timeframe is we can assume we do not have to put a lot of effort into Internet leads that are older than [INTEREST TIMEFRAME] days. That means we will need to staff to sufficiently handle at least [AVERAGE LEADS PER MONTH] plus residuals from leads that didn't buy that came in over the last [INTEREST TIMEFRAME] days. That is roughly [SALES GOAL / CLOSING RATIO] leads. I have heard that the average Internet manager can fully optimize a workload of roughly 100 new Internet leads per month. I just thought you should have those stats before we discuss budgets.

Fourth: Figure out where you want to be. How many sales do you want? With that number in your head you can use the *Lead Closing Ratio* to figure out what you're going to need to get there. If you take the number of sales you want and divide it by the *Lead Closing Ratio* you'll get the number of leads you need to get to that sales figure....technically speaking.

We'll call that the *Projected Leads Needed*

Continued word track: So boss, you've got the exact numbers I can account for. Now, let's talk about some projected numbers to help aid you in your decision. Please keep in mind that this next stat is scientific and not reality; it is purely a technicality that does not factor pay incentives or quality of personnel. I want us to get to [INSERT SALES GOAL #] per month. If we figure our current closing ratio is [LEAD CLOSING RATIO] then we will need [PROJECTED LEADS NEEDED] per month in order to get there- technically speaking. We will also need at least [INTEREST TIMEFRAME] before we can expect to see our sales goal number. Just imagine what we could get to with an improved closing ratio. We're going to need quality people who are completely dedicated to attaining this goal.

By the way, I heard from someone who has over 6 years experience in building his own dedicated BDC (some guy named Alex Snyder) who said he saw the right BDC pay was roughly the same as the average pay for sales agents. He also said he found the best way to incentivize his BDC was based on the number of outbound phone calls each one made per hour. He said that 8-12 calls outbound calls per hour produced a good number of appointments and still allowed time for his BDC to adequately handle inbound calls and Internet leads. He mentioned that some guy named Jerry Thibeau helped him figure that incentive plan out

Example numbers in word track below....

That is great information and advice Alex, I appreciate it. I know given the resources I could create and manage a very successful BDC and your word track definitely provides a solid base for my discussions. A detailed breakdown of our stores shows the following:

2 locations (Ford Lincoln/Buick GMC), 100 yards away from each other. Ford averages 157 leads, Buick averages 63)

3 locations all together (Nissan/Subaru/Pre-owned lot). Nissan averages 87, Subaru 63, and Pre-owned averages 50.

1 location 30 miles away (Chevy Buick GMC) averages 95.


We close right on the 10% mark consistently. I know a change in process and dedication from the company gets us closer to 13-15%. Our average customer buys in 21 days and we do get customers who buy up to 90 days(we follow up to 180), but not much after that 90 day mark.

My thought right now is to have dedicated consultants who follow the leads for 45 days. At that point the lead is handled by a combination of an internet coordinator and automated emails. I think this would allow me to put more leads onto a dedicated consultant and still maximize our follow up. In this set-up, could I give a consultant 150 leads per month?

 

[Alex Snyder]

In this set-up, could I give a consultant 150 leads per month?

Without knowing the quality of the people handling the leads I would say 150 is a good start. Try it out and be sure to keep an eye on the closing ratio. If it goes up from 10% then you're doing well. If it remains steady at 10% or drops then you either have the wrong people, the wrong pay plan, or you need more people.

 

[ajholland]

Without knowing the quality of the people handling the leads I would say 150 is a good start. Try it out and be sure to keep an eye on the closing ratio. If it goes up from 10% then you're doing well. If it remains steady at 10% or drops then you either have the wrong people, the wrong pay plan, or you need more people.

The people I have in mind are really solid on the phone and email. I think they would do very well, they just need to be allowed to focus on internet and not the lot. I think we would see an immediate 2-3% increase in closing %.

 

[Dan Dulgheru]

This is how we're setup:

Director of eCommerce - me
BDC & Phone System Manager - Steven Finnel (also on these forums)
eMarketing Coordinator - creates online videos, handles social media, SEO, and is basically my right hand
Inventory Marketing Coordinator - takes the photos of our cars, prints stickers, and writes comments
3 Customer Care Center team members on the sales side - basically Internet Sales Managers
11 Customer Care Center team members on the service side - handle inbound calls and service appointments

It has taken us about 4 years to get to this point. We've had numerous other staffing structures, but this is what is working for us right now. We're talking about making some minor changes in 2010, so this structure is in no way ever set in stone.

Hi Alex,

I am curious and I remain grateful if you say that the above structure remained unchanged.

Is this right?

Thx

 

[ddavis]

I've always been intrigued by the concept of having a BDC.

I have been an Internet Director at two stores. At both, our sales increased so fast we outsold the facility. Getting computers, desks and phones became an issue. I was fortunate to have a good core of quality Internet Managers. We simply ran out of room and purchasing a new phone system is very expensive.

I believe that a Internet Manager working customers cradle to grave can handle about 85 quality leads per month. I kept a close eye on the ROI report. We initially purchased leads from various sources. As the content improved on our website and display advertising, we stopped purchasing leads. Our lead count continued to grow. Every time we exceeded the 85 leads per Internet Manager, we added a person. Because of our infrastructure limitations, we focused on leads that had proven to close at a high percentage. For the same reason, I couldn't afford to have an Internet Manager that couldn't perform. At the first store, I had two guys deliver 66 vehicles in a month. At the second, I had a guy deliver 99 vehicles in a quarter. We expected an Internet Manager to sell 20 vehicles a month. Our department made up 60 to 70% of new and used car sales in a major market. I got a bonus every time we exceeded 15% sales as a percentage of leads.

I will never know what could we have accomplished with unlimited resources.