BDC Averages.

[DealerForce]

I'm surprised there are still dealers that think this way.

Better yet...hire sales people that bring their own customers, close their own deals, fund their own deals and clean their own cars. On paper it looks brilliant. Sounds like a splendid idea. You will absolutely save a lot of money. Heck I'd recommend hiring Santa Clause, The Eater Bunny and the Tooth Fairy their client base are HUGE.

Excellent!

 

[mcampo2501]

But I will strongly disagree people don't want to take a phone call - after 500+ successfully completed dealership campaigns in 48 states and over 2 million calls logged, I am very comfortable in saying that it's actually the exact opposite. We do for dealers what 100K pieces of mail can't do - actually get people in the door to buy a car.

If you have had decades of success using this approach, I would not be surprised at all. In fact, I would say that has been the golden standard up to the moment. Heck, it wasn't that long ago that even I had a home phone. What I'm saying is that if you do any kind of research what so ever on the buying behavior of Gen x/y you'll see find that they don't like the phone. Communicating with people the way THEY want to communicate is the future. I took the requirement off the phone number field on our website forms and not only did I stop getting a bunch of bad phone numbers, but my overall lead volume went up while my close rates stayed the same. I have countless emails addressed to my BDC staff thanking them for not harassing them with endless phone calls like the other dealers they contacted. In some cases I think it was actually the driving factor in their purchase decision. My team "actually gets people in the door to buy a car", and they do it in a way that makes the customer comfortable.

We can agree to disagree here. Like I said before, strong phone skills are important when someone WANTS to talk on the phone, and will currently still be a skill found in all the best sales people and BDC agents. My thought is that type of person will account for a much smaller part of the buying population in the years to come. People like yourself will need to learn how to do what you've done by phone through new mediums, or you'll be left behind.

 

[ddavis]

I'm surprised there are still dealers that think this way. I have been a Sales Person, Internet Manager working leads from A-Z, BDC Manager, Internet Director and I have been an outside Internet Marketer.

Still dealers that think this way? I really don't appreciate the condescending attitude. Over the last four decades, I have held every position in the front end of the store from a salesperson to the General Manager. Though I have never held the Controller position, I have a degree in accounting and can read a financial statement with the best of them.

In my opinion, nothing is as effective as having a BDC. Why? Because their sole purpose from the second they come in is to reach out to customers and leads. They don't have to worry about picking up a car, running a car to detail, stepping away for a lot walk, spending time greeting and qualifying a customer, leaving the dealership for a test drive, or sitting down to do paperwork. They are aggressively reaching out to leads and customers to get them to come to your dealership.

The sole purpose of a salesperson is to sell a car. I have been fortunate to attract high quality sales professionals and not the average idiots that you see at most dealerships. At my last store, here in Dallas, I had a dozen cradle to grave ISMs that averaged over 10 years of experience. You couldn't keep your desk, in my department, if your 90 day running average was less than 16 vehicles. A dealership is lucky if the "average" salesperson actually accomplishes a full hour of work in a given day. Today, dealerships don't want superstar salespeople. They prefer green peas that are easy to control. They would prefer two 9 car performers to one that sells 20. Why? They don't have quality managers that can motivate and control them.

If one rep places 100 daily phone calls that means he/she is spending 5 minutes per phone call.

That sounds like Obama math. My ISMs hammered the phones. I officed in the same room with my ISMs. You are lucky if you get a live person 10% of the time. How is that 5 minutes?

Give your best SALESPERSON 100 leads per month. Will he effectively work those new leads the way a BDC would? I'm sure he will try to but will not have enough time or patience to do so. His bread and butter is closing a deal and moving on. The BDC's bread and butter is getting the customer in then moving on. It's all about volume.

First off, I would never give my ISMs 100 leads. I was alarmed if it reached 75. It is not about (contact) volume. It is about quality of contact. Your clerks could not hold a candle to one of my ISMs. Yes, they did daily lot walks and they could describe any car on the lot in detail. They didn't piss off the customers with endless messages. This is something that experience teaches.

I've had reps convince customers to drive an hour passed several same brand dealerships to visit us.

Again, we were in Dallas and we routinely had customers come from Austin, Oklahoma City, Tulsa, Lubbock, Shreveport, and Houston. One Saturday, we had two different customers come from Lafayette.

the Internet Director chooses where to spend the budget, the BDC works the leads produced from those sources. How is that NOT Business Development?

As the Internet Director, I had a great deal to do with budget but also how the cars were marketed. The leads and internet related calls went to my ISMs without adding a layer to the sales organization. My store was the volume store in the group (143 stores). My budget was but average for the group.

I agree there is absolutely no substitute for quality salespeople. But a salesperson cannot do it all.

Yes, I believe that they can. It may require more of them but they are on commission. No additional hourly wage, and no call volume bonuses or appointment spiffs. Dealership have gone this route because they can't attract, train, motivate and retain enough quality people. Every market leader has one thing in common, a better sales organization. These dealerships will have salespeople that were managers at other dealerships. The really good ones seem to flock together. Who wants to be surrounded by a bunch of poorly motivated duds?

BDCs become necessary because of poor salespeople and marginal managers. I had a daily performance board that became the focus of the General Manager. It included number of calls, appointments, closing ratio as a percentage of leads, number of leads, deliveries etc. (all by ISM) with the totals at the bottom. I had great people and their activities were closely monitored. I had a floor salesperson tell one of my guys that he would never work for me. "The guy is always up your a$$". He told him, "let's compare checks at the end of the month".

Take away the leads and the phone calls, does the BDC actually develop business? Are they soliciting business on their own? My guys did get a lot of repeat and referral business. The customers came in and my guys would close them in about half the normal time. They did print up their own deal packets (checked by the desk) and turn to F&I. They did take the car to clean-up but we had delivery specialists.

I'm not going to go into statistics because I don't think you would believe me. I will say that I haven't seen any on this thread that impressed me. You have a BDC that you consider productive. Tell me, how much productivity is the store getting out of the salespeople on an hour to hour basis? If they are like most stores they are in "dope rings" pissing in each others pockets waiting for the up bus.

 

[Jay Juliano]

Still dealers that think this way? I really don't appreciate the condescending attitude. Over the last four decades, I have held every position in the front end of the store from a salesperson to the General Manager. Though I have never held the Controller position, I have a degree in accounting and can read a financial statement with the best of them.

I don't mean to sound condescending. It's not my intent to. With that said, and at the risk of sounding condescending again, it's actually irrelevant which roles you have held in the past. All it takes is common sense. If it takes an employee 6 minutes to dial a number, speak to a customer, send an email, and then update the CRM he/she is only capable of making 10 calls per hour or 80 calls per 8 hours with no break. If you have a "cradle to the grave" Internet Manager handling your leads he won't even be able to produce 80 calls a day between all of the breaks he must take (greeting, qualifying, demos, paperwork, detail, working deals, ..., etc). An employee with such a work load cannot effectively work leads... only recent leads. This is why a BDC works when ran correctly.

At my last store, here in Dallas, I had a dozen cradle to grave ISMs that averaged over 10 years of experience. You couldn't keep your desk, in my department, if your 90 day running average was less than 16 vehicles.

So as long as you sold 1.3 cars a week you had a desk in your department?

A dealership is lucky if the "average" salesperson actually accomplishes a full hour of work in a given day. Today, dealerships don't want superstar salespeople. They prefer green peas that are easy to control. They would prefer two 9 car performers to one that sells 20. Why? They don't have quality managers that can motivate and control them.

This is far from the truth. Times are different. The majority (not all) of your old school car guys love to sit around and reminisce about the old days of crushing customers and bitch about how there's no more money in the business unless you are "being fed". They simply don't understand or accept change. This is why green peas are becoming the "preference". Quality managers can only motivate and control those who WANT to be motivated.

That sounds like Obama math. My ISMs hammered the phones. I officed in the same room with my ISMs. You are lucky if you get a live person 10% of the time. How is that 5 minutes?

With every phone call placed requires at least a voicemail, an update in the CRM, and a sent email. Between calls that go nowhere and calls where you make contact you will probably average anywhere between 4min to 8min per call (averaged out). In an 8 hour shift this is 60-120 phone calls (I didn't even factor in a Lunch break). Some will do more and some will do less. If you have a "cradle to the grave" ISM he/she most certainly will do MUCH LESS because he/she has the extra responsibility of taking on the salesperson role. Meet and Greet, Qualifying, Walk Around, Demo, Negotiate, Detail, ..., etc. these are all tasks that take away from the time spent reaching out to your customers. It's flawed.

First off, I would never give my ISMs 100 leads. I was alarmed if it reached 75. It is not about (contact) volume. It is about quality of contact.

It is about both quality and volume. When you mix quality voicemails, quality emails, and quality conversations WITH volume that is when you push the needle in a BDC.

Your clerks could not hold a candle to one of my ISMs.

I wouldn't know that. Neither would you. We know nothing about each other. We know nothing about our operations.

Yes, they did daily lot walks and they could describe any car on the lot in detail. They didn't piss off the customers with endless messages. This is something that experience teaches.

Don't assume just because an employee is a BDC Rep and not a salesperson they are p^ssing off customers.

Dealership have gone this route because they can't attract, train, motivate and retain enough quality people.

Not true in all cases. Every marketer should also be a salesperson and every salesperson should also be a marketer. However, your sales department should be different from your marketing department. It's all about having relational departments to effectively and successfully track your ROI.

Every market leader has one thing in common, a better sales organization. These dealerships will have salespeople that were managers at other dealerships.

I don't agree with your philosophy here at all. In my opinion, declining in the rankings is unattractive. What is the reasoning? Lack of modern skills? Lack of job availability? I don't know...I disagree that "better sales organizations" will have former sales managers selling. The beautiful thing about this business is you can have a salesman of 25+ years lose to a kid with motivation and 0 experience.

BDCs become necessary because of poor salespeople and marginal managers.

Ignorant statement. Or actually, ignorant view. BDC's are becoming popular because it's a dedicated department solely responsible for one task. More and more dealers are starting to see the importance of having reps designated and dedicated to solely marketing and generating business. It's very easy to hold accountability with a dedicated department but near impossible with a sales floor where everyones day and tasks differ so greatly.

How can you hold a Salesperson accountable for only making 20 phone calls if he spent the whole day "upping" customers and going on test drives? You can't.

Take away the leads and the phone calls, does the BDC actually develop business? Are they soliciting business on their own? My guys did get a lot of repeat and referral business

I can tell you are an old school car guy and there's nothing wrong with that. You just don't "get it". The BDC develops business from working leads, previous customers, maturity lists etc. They work at the dealership. Are they going around passing out flyers and holding up signs? No. Neither are your salespeople. Everything you are saying looks great on paper. However, in the real world it doesn't exist. Your sales people surely are not working 60+ hours at the dealership and THEN working full time at home marketing. They don't. Entirely unlikely and unrealistic.

I have BDC reps who IN ADDITION to their jobs brought in friends/family to buy no different than sales people (because they are....people). I have BDC reps who have had previous customers call THEM and not the saleperson because of the rapport that was built before they walked in to the dealership (again..because they are people. Just like everyone else.)

The customers came in and my guys would close them in about half the normal time. They did print up their own deal packets (checked by the desk) and turn to F&I. They did take the car to clean-up but we had delivery specialists.

Why would you have delivery "specialists"? Isn't this kind of similar to the whole BDC vs No BDC debate? I mean...I would like to see a Salesperson deliver a car to his/her own customer. You should have hired better salespeople...... (That was condescending. I apologize a head of time.)

I'm not going to go into statistics because I don't think you would believe me. I will say that I haven't seen any on this thread that impressed me. You have a BDC that you consider productive. Tell me, how much productivity is the store getting out of the salespeople on an hour to hour basis? If they are like most stores they are in "dope rings" pissing in each others pockets waiting for the up bus.

In a perfect world your sales people do EVERYTHING. Even you have found that having a "delivery specialist" is convenient because it frees up the time for the sales people so they can move on to the next customer. There are dealerships that have BDC's for that sole purpose. Then there are dealerships that have BDC's for that purpose AND for the simple fact that they can reach out to far MORE customers without the interruption of taking test drives, doing paperwork, and everything else the salesperson is responsible for.

 

[mcampo2501]

Dave, I'm generally on the same page as you, but as Jeff pointed out earlier, a customer visits fewer than 2 dealerships before purchasing. At some point the idea of an "ISM" will be dead. I firmly believed in the ISM approach and came to my current job pushing that agenda. The problem with a cradle to the grave internet approach is that the sales people find themselves with less and less to do, which creates the environment you described with typical sales people.

Here is what you're not considering. If a "floor salesperson" is only taking walkins, his whole day consists of doing demo's, test drives, writing up deals and praying that they'll get closed. Half the deals the ISM's end up paid for are deals they have to fight the floor over because someone didn't ask for who they were supposed to ask for, or something like that. If the ISM's spend more of their day getting people in, and the floor salesperson spends most of their day with product, it starts to make sense to separate the two jobs.

Here is where I somewhat agree with you. The best and most qualified people should be in the BDC. I think the dealership is moving to a place where all the hard work and intelligent thinking happens before the customer arrives. For that reason, I want people that can simply learn to demonstrate and deliver a car to be salespeople. A good sales manager or two allow for all the t's crossed and i's dotted, leaving the BDC to do the heavy lifting.

 

[DealerForce]

What I'm saying is that if you do any kind of research what so ever on the buying behavior of Gen x/y you'll see find that they don't like the phone.

Wow! They don't like the phone?? I guess that thing glued to everybody's ear I see walking around with must be a fancy blender. And your sold on that people really don't want to be contacted by phone because of that huge sampling of roughly .0002% of the total database told you thanks for not calling them too much? You sound like one of my old phone reps that didn't want to pick up the phone.

While you handle the 2 out of 10 customers, I'll get the other 6 to 7 into my dealership because I'm able to call 2k people in a day versus your 60. My reps sell the appointment and average a 86% show rate on new leads... that's across 300 of the last campaigns we've completed. #'s don't lie.

A BDC gives you a dedicated resource for both quality and volume, Something you can't get from a sales rep selling part time and calling part time, not when you have thousands of leads coming in every month; the dozens if not hundreds you aren't connecting with monthly because you take it slow and easy, guess where they're going... to your competition. That's one of the biggest "profit leaks" in the industry and we help solve it every single day.

 

[ddavis]

If it takes an employee 6 minutes to dial a number, speak to a customer, send an email, and then update the CRM he/she is only capable of making 10 calls per hour or 80 calls per 8 hours with no break.

Jay, the vast majority of those calls go to an answering machine. That doesn't take even a minute. You have the CRM contact in front of you and that takes no time to type "left msg". Our ISMs worked on appointments only. The time to sell a car was shorter because they already had a car picked out, was parked in the front and all of the paperwork would be generated from the information in the CRM. Appointments were usually in the evening and after much of their follow up work was completed. Yes, my guys logged a lot of hours.

So as long as you sold 1.3 cars a week you had a desk in your department?

No, that is 16 units per month on a 90 day running average ...minimum. I only remember sending one guy to the floor for not meeting the quota.

Times are different. The majority (not all) of your old school car guys love to sit around and reminisce about the old days of crushing customers and bitch about how there's no more money in the business unless you are "being fed". They simply don't understand or accept change. This is why green peas are becoming the "preference". Quality managers can only motivate and control those who WANT to be motivated.

I didn't run a retirement community for burned out salespeople. Anyone can manage green peas. You tell them to stand, on their heads and an hour later they will be there. 87% of all salespeople are gone within a year. After 6 months, the ones, on the bubble, become an issue and a cancer for the organization. They are negative and just hang'n on until something else comes available. The ones that make it, over a year, become more difficult to manage. That is where I excelled as a manager. Give me those people. I can't tell you how many salespeople that I hired that were performers but fired for insubordination at other stores. I controlled them with very little turnover and most dealerships can't say that. Good salespeople are not going to tolerate working for idiots.
Most GMs don't have a clue what turnover cost them. I think that I wrote a thread about this on here.

I don't agree with your philosophy here at all. In my opinion, declining in the rankings is unattractive. What is the reasoning? Lack of modern skills? Lack of job availability? I don't know...I disagree that "better sales organizations" will have former sales managers selling. The beautiful thing about this business is you can have a salesman of 25+ years lose to a kid with motivation and 0 experience.

I have no idea what you mean by "declining in the rankings is unattractive". Most of these people don't want the aggravation of management and with the right pay plan can make more money. One of my closest friends is a floor salesman and he makes more than anyone other than the GM and dealer. I defy you to find some motivated green pea that can sell with him.

Ignorant statement. Or actually, ignorant view. BDC's are becoming popular because it's a dedicated department solely responsible for one task. More and more dealers are starting to see the importance of having reps designated and dedicated to solely marketing and generating business. It's very easy to hold accountability with a dedicated department but near impossible with a sales floor where everyones day and tasks differ so greatly.

How can you hold a Salesperson accountable for only making 20 phone calls if he spent the whole day "upping" customers and going on test drives? You can't.

Dealerships are going to BDCs because their managers are not getting the performance out of their people. I'm seeing dealerships closing their BDCs. I ran an internet department with cradle to grave ISMs. They didn't catch ups. I officed in the same room with them and monitored their every move. I heard every sales call that came in the store and could hear their outgoing calls. Where do you get 20 calls? My guys hammered the phones. These were professionals and not clerks. They were money motivated, highly competitive and came in to work.

I can tell you are an old school car guy and there's nothing wrong with that. You just don't "get it". The BDC develops business from working leads, previous customers, maturity lists etc. They work at the dealership. Are they going around passing out flyers and holding up signs? No. Neither are your salespeople. Everything you are saying looks great on paper. However, in the real world it doesn't exist. Your sales people surely are not working 60+ hours at the dealership and THEN working full time at home marketing. They don't. Entirely unlikely and unrealistic.

I saw the potential of the internet early on and was intrigued by it. I am old but far from old school. My guys handled all of the internet calls and leads. We had the same lists which were incorporated in the CRM. No they don't pass out flyers, answer mailouts, newspaper or TV ads ...just internet. I wouldn't hire a green pea and everyone, on the sales floor, wanted in my department. I did the marketing and I am very good at it.

Why would you have delivery "specialists"?

The store used delivery specialists for all deliveries...not just the ISMs.

A BDC gives you a dedicated resource for both quality and volume

I seriously question the quality. I had a dozen ISMs and I would put my least productive against your best on the phones. We sold 70% of the new and used cars and our average total front and back gross was much higher than the floor.

 

[Jay Juliano]

Jay, the vast majority of those calls go to an answering machine. That doesn't take even a minute. You have the CRM contact in front of you and that takes no time to type "left msg".

That isn't true. It doesn't take less than 1 minute to click in to a customers record, send an email, dial a phone number, wait for it to go to voicemail, leave a quality message, update the record in the CRM, then move on to the next contact. And even if it did...once you factor in the length of time it takes to talk to someone and set up an appointment it isn't hard to believe you would average no less than 4 minutes per phone call (120 Phone Calls per 8 hour shift with no breaks or lunch break).

It took 40 seconds alone for my phone to get to the part where you leave the voice mail. And when you send an email you should NEVER use JUST the template. Every email sent should have a touch of custom output. Remember QUALITY.

Our ISMs worked on appointments only. The time to sell a car was shorter because they already had a car picked out, was parked in the front

If an exact vehicle was already picked out then your salespeople were spending a LOT of time on the phone qualifying the customer. I don't believe every appointment a vehicle was picked out and the customer never changed color or options. Again, on paper it sounds good. In the real world it's less than realistic.

Anyone can manage green peas. You tell them to stand, on their heads and an hour later they will be there.

That's not managing a green pea. A GOOD manager will train, inspire, and guide a salesperson regardless of their level of experience. Unfortunately most managers will not.

Most people are hired based on experience then fired based on attitude. If you hire based on attitude and train it's less than likely you will fire based on attitude.

Most GMs don't have a clue what turnover cost them.

I agree 100%.

Dealerships are going to BDCs because their managers are not getting the performance out of their people.

I suppose you can now say there are many reasons why a dealership may or may not go with a BDC. Holding accountability with a dedicated team seems to be the most logical choice for me.

I'm seeing dealerships closing their BDCs.

I see that too. But was there ever a set process in place to begin with? Did they have a qualified leader (Internet Director) or was it just an average joe or someone off the floor???? That is the real question for a failing BDC or any failing operation.

I seriously question the quality. I had a dozen ISMs and I would put my least productive against your best on the phones. We sold 70% of the new and used cars and our average total front and back gross was much higher than the floor.

It's ignorant to question the quality of an operation simply because the employees hold the title "BDC Rep" as appose to "Salesperson". It's also ludicrous to assume your reps or better or worse than anyone else without knowing the numbers, market, and ROI. I won't even entertain that because it's silly.

You can think whatever you want but the fact is a BDC will absolutely be able to reach out to more customers for the sheer fact they don't have the interruption of their work flow by taking on the salespersons role like an ISM would.

I applaud you for running a solid Internet Departments with ISM's. The dealership you worked for must of been very lucky to have a great leader. Whether you ran a BDC or utilized ISM's you would of seen success. In my professional and personal opinion I have found the success with isolating the marketing to a separate department and running a tight BDC.

 

[john.quinn]

Jeff, I agree that this is one statistic that everyone in the car business should be focused on. Most dealerships still believe that they are on target when they close 30% of their sales log. The 30% statistic came from NADA over thirty years ago when consumers were "shoppers" and not "buyers".

What I would love to see is a comparison of good cradle to grave as apposed to BDC operations. I am still convinced that the BDC is ineffective as it adds another costly layer to the sales organization. Calling it a Business Development Center is a joke. A BDC simply takes calls and internet leads that were developed by the Internet Director. They don't develop any business on their own. I think that the "handoff" has really become a turnoff to the customer. I have heard too many calls where the customer asks if they will be dealing with the salesperson on the line. There is no substitute for quality salespeople.

I want someone to show me a BDC that can develop business on it's own and I will be all in. I am convinced that most organizations with BDCs have more salespeople waiting on the "up bus" while clerks are taking calls.

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...}

 

[GrantG]

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

This is a topic that needs to be addressed more the industry if we are to evolve and prosper. How many dealer groups or OEMs have really asked the Million Dollar question: Why we do business the way we do?

If we are to grow as a dealership (and Industry) we need to better examine the roles and responsibilities of our staff. Why should the car business be any different? Why do we react slowly to change? Frankly, and this might irritate a few, Franchise laws have protected dealers from having to get with the times and earn their keep. I am not proposing a change to franchise laws but I do promote survival of the fittest.