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Did Alan Ram Really Post About Having the Sales Floor Handle Leads Instead of the BDC and Close the Comment Section?

Alan, let me begin by saying that you are one of my favorite trainers and I highly recommend your training to any dealership.  Your training is exceptional. However....the vast majority of salespeople are not effective at handling Internet leads or phone calls. In fact, they are horrible at it. The average turnover of the salesforce in the car business is extraordinarily high and the main reason for this high turnover is the lack of training that new salespeople get.  They are set up to fail from the start. Is it any wonder that when a new salesperson fails over and over in the beginning of their careers that they start to look at other options?  As an industry, we are not even training new salespeople how to sell cars. What makes you think that we are going to do a good job training them how to sell appointments?

I have heard you make your argument several times and while it's compelling and makes perfect sense, it's not based in reality for the majority of dealerships.  Dealerships struggle on a daily basis getting salespeople to follow up with their own customers.  Salespeople don't train, they don't follow up and they don't prospect. They come to work and sit at their desks hoping for an up to walk through the door. When the up does show up, they don't put notes in the CRM and they don't follow up with their SOLD and UNSOLD customers.  This is reality.  Are there dealerships where all of the salespeople are true professionals that would love to handle Internet and phone ups? Of course there are but those are the top 5-10%. I agree that, in theory, every salesperson should be able to handle an up whether it's on the floor, the phone or the computer.  In reality, we just need them to sell cars, train and prospect.  When they start doing those things, we can talk about eliminating the BDC.  Until then, we are going to need specialist who know how to set appointments that show.

######

EDITOR'S NOTE: In fairness to Alan Ram, I have copied and pasted his original post in the space below... In order to appreciate Mr. Warwick's points, as well as the comments that have followed, it is useful to have Alan's original article in the same page for reference...

TITLE: Is Your BDC The Result of a Failure in Training? 

AUTHOR: Written and posted by Alan Ram

(Article reposted in entirety below)

Here’s a question for you –

Is your BDC the result of a failure in training?

 

That should have your attention.  If I’ve ever written an article that will be misconstrued, this will be the one! As I’ve talked to dealers over the years, I’ve seen many BDC’s spring up out of knee-jerk frustration. While there are obviously exceptions to the rule, this is something I’ve seen repeated in the industry over the past several years.  A dealer says “we tried training our salespeople, but they’re still terrible at handling phones so we’ve hired three people and all they’re going to do now is handle our inbound sales calls as well as Internet leads.” I have a number of different problems with this thought process and I’m happy to tell you about them:

  1. So you’re telling me that the people that you’ve hired to sell Lexus in Chicago are capable of talking to a customer that walks into the dealership, but for some reason it blows their flipping minds to talk to that same customer on the telephone or communicate via e-mail?  I’m not willing to accept that.
     
  2. I have trained tens (if not hundreds) of thousands of salespeople and BDC reps over the years. In that period of time, I have found that it takes every minute as long to PROPERLY train a BDC rep as it does a salesperson. The operative word in the previous sentence is “properly”. As a matter of fact, it takes longer to train a BDC rep. Why? Because while the sales staff already knows the product, the BDC staff is starting from scratch. I’ve asked BDC reps specific product questions before and you may as well be asking some of them the gross domestic product of Bolivia. So while you think you’re solving one problem, you’re really creating another. Most of the calls I listen to that are made into BDC’s do not represent an improvement over the sales staff. At most it’s the get the customer’s name and number department while trying to set up an appointment without giving the customer an actual reason to come in. I’m not trying to be harsh here. This is fact. We are creating an unnecessary level of specialization at many dealerships.
     
  3. In this day and age, where the number one thing I hear when I do dealer 20 group meetings is “expense, expense, expense!”, shouldn’t the number one expense be hiring a second group of people to do the job the first group should have been doing? We’re talking about communicating with customers on the telephone and Internet here! This stuff isn’t quantum physics.  It amazes that the same dealers who throw up in a trash can when they get a $1000 invoice for training have absolutely no problem in adding as much as 20-40k of expense per month in creating a BDC.

 

Here’s the solution; train your people to do the jobs you hired them to do. 

If I’m hired to sell cars at your dealership, I should be capable of communicating with customers in person, on the telephone, and online. That would be part of being a well-rounded salesperson. Unfortunately, salespeople don’t necessarily arrive on your doorstep well-rounded. It’s your job to train them. The sad fact is that much of what dealers have bought over the years in the name of training, hasn’t been anything close to training at all. Going to the Marriott and listening to myself or anyone else talk for eight hours is as much training as going to a baseball game is training for baseball. You might get educated, but you’re not necessarily going to get trained. 

 

For something to be considered training, three elements need to be present:

1) Education

2) Simulation

3) Accountability

If any of those three elements is missing, whatever you’re trying to accomplish probably isn’t going to happen.

Now I’m not trying to convince anyone to dismantle their BDC. What I’m telling you to do, is make sure that you’re not replacing one group of people that you didn’t train properly, with another layer of expense that you’re not training properly either.

BDC’s ARE GREAT and provide a wonderful return on investment when you have them doing the right things the right way.  For example, following up unsold customers. 39% of people surveyed say that the reason that they would not come back to a dealership is because they didn’t like the salesperson for whatever reason. Too tall, too short, reminded them of their ex-brother-in-law or smelled like smoke. What this is saying is that your sales staff does not have a shot with 39% of what you think are their be-back opportunities. When the customer doesn’t like the salesperson they won’t tell him or her “we didn’t like you”. What will they say? We’ve decided to hold off or we’re not going to do anything right now. They won’t tell the salesperson, but they will tell someone else. That’s why it is critical that every dealership have someone in ADDITION to salespeople following up on each and every customer that visit’s the store.  That is a great function for your BDC.

  

Another thing you can do; shift your BDC's focus to your service department.
I have worked with many dealerships that have amazing success in having BDC representatives schedule both repair as well as recommended maintenance. They can actively be following up on recall notices and generating service revenue.  This is a huge opportunity.  Your service advisors are on the drive talking to customers. They’re in the shop checking on vehicles. Call your dealership. Try to get a hold of the service adviser sometime and see how often you get voice-mail or get put on hold for a period of time.

 

So again, I’m not telling you to dismantle your BDC.

Business Development Centers are great when they are actually developing business. Let’s just make sure you have yours focused on the proper opportunities.

 

http://cbtnews.com/tags/alan-ram

Views: 2971

Tags: Alan Ram, BDC, Dealer BDC, Failure, Proactive Training Solutions, Result, Training

Comment

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Influencer
Comment by William Phillips on July 28, 2014 at 7:30pm

It is easy to understand, change trainers (managers), not your sales format.   If they cant sell on the phone, they cant sell in person. One you can see and stop, the other you cant if you don't look.  


Influencer
Comment by Mike Warwick on July 28, 2014 at 3:26pm

Why is it hard to understand that it's easier to train 3 BDC agents to be experts at what they do than it is to train 15 salespeople?  I agree that ROI is not only important but should be the deciding factor. If your BDC agents are not closing a minimum of 14%, they are costing you money.


Influencer
Comment by William Phillips on July 28, 2014 at 3:13pm

If Alan did post it, he is correct.  If hear these comments in this Blog right, you can train BDC people but you cant train sales staff??  Who hired them and who's managing them is the real problem.  The excuses I have read in this Blog are unreal.  Have any of you ever run or owned a store?   Sales staff are too busy?  give me a break,give them less leads....  BDC's are excuse crutches for untrained or undisciplined sales staff, they should never be, but are used for first time contact.  How many surveys do you want to take the time to read that verifies customers hate being passed around.  BDC's do work for out bounding, they perfectly train your sales staff to just watch for the front door to open at the dealership.  Get ready smarter cars are evolving year by year.  When you start accepting the EXCUSE that your sales staff cant be trained, cant follow up and cant talk to a client your headed down the path of no return. Soon the car will be to difficult for the staff to operate (to time consuming) so now they cant sell it,let someone else do that.  Put your sales staff in the right amount of leads (obviously less than most of you think) and hold them accountable for more than just the end result of any opportunity and your will see the Magic you long for.  Do I have clients with BDC's, absolutely, and we make them work.  Are they the best solution, absolutely not, and the reasoning to any GOOD manager who reads the financial statement is obvious.  More employees and poor ROI.   Accountability is the toughest pill to swallow in the auto industry, because its the only one that works.  Drink someones Kool-Aid or your own.  


Influencer
Comment by Mike Warwick on July 28, 2014 at 5:54am

Manny is 100% right and I don't mean to come across as believing that salespeople are lazy or incompetent. Salespeople want to be successful and more importantly, they want someone to show them how to be successful in this business. Salespeople will do what we train them to do and hold them accountable for. If you have salespeople that don't train, follow up and prospect, their managers need to take a good long look in the mirror.  You are allowing this to happen on your watch. The excuse I hear the most often from managers is that they don't have time. In my experience, the real reason they don't train their people is because they don't know how.  I have no idea why we assume that a manager should be a good trainer.  They are completely different skill sets.  Stop assuming your managers know how to train and find out if they do.  Give them a topic to cover and sit in on the training. If they blow it, get your manager some training.  I read a statistic last week that they average NFL player spends almost 3 hours practicing and training for every minute they are in the game. How much practice and training are your players getting before they speak to a customer?

Comment by Steve Duff on July 28, 2014 at 5:04am

There are many problems with having floor sales personnel work internet and phone. Besides what has been pointed out below (which already makes a solid case) there is the logistical problem that the clock brings.

Here's what I mean... if a floor sales person (BDC are also sales persons by the way, just that they are selling appointments, not cars) takes an internet lead and follows up with an email and a voice mail message, they will be expected to keep trying until they make contact. An email or call may come back from the customer which informs the sales person that they are at work and the best time to talk to them is around 5:30. Ok, so what is going to be happening at 5:30? Most likely the sales person will not be available to follow up. They will be in the middle of a test drive, doing a service walk, working numbers, etc with a customer on the lot. They may not be done with that customer until after 7:00. Meanwhile his internet customer has moved on to the next dealership and has purchased a car because they were ready to buy, but their salesperson was not ready to sell.

There are a thousand other similar scenarios. Sometimes one of our sales departments gets a little slow and typically they will blame our BDC for not giving them leads early in the game. So about once a year we agree to turn leads over them them very early in the game, like after one attempt by BDC, then give it to that sales team to continue following up. Every time after a few days we take it right back because they simply will not or cannot do the proper followup.

We went through this again just last week. Their sales were down, we were blamed, we tried something new whereby each day all pre-owned fresh internet/phone ups were to immediately be given to a particular pre-owned salesperson (each day was a different salesperson). I'll just give one example of what happened. BDC took call, customer said they wanted a call back in an hour... BDC sales rep turned it over to pre-owned sales rep, telling him to be sure to call in an hour. He said "yeah sure, no problem". Half an hour later the BDC rep looked but saw no notes in CRM (floor sales reps were firmly told they had to enter in all comments about their activities), but nothing there so she called him. He jumped on her saying "I'm busy now, but I will call them soon".

Ok, so you probably guessed it. No, the customer didn't get called back.

BDC now once again retains the control of selling appointments, as it should be.


Influencer
Comment by J.D. Rucker on July 28, 2014 at 12:11am

It's been a decade since I sold a car directly, and I'll readily admit I was bad at it. I was not persuasive, didn't do well at asking for the business, and didn't really make a friend. However, I was often at the top of the board because I was tenacious at follow up, asking for referrals, and trying to generate a ton of opportunities. I was the guy that pulled the orphan file and licked envelopes to the point that one dealer asked me to start paying half of the postage for all of the letters I was sending out.

There were those who were much better at selling cars. They were aggressive closers who could get a customer to climb into the trunk of a car just to prove to the manager chuckling from the tower that they had control. I always thought that if I could sell like them or if they could follow up like me, we could set records.

Then, the internet came and I found the solution (well, the solution found me, actually). I was at a dealership that believed the internet was the devil and as the geek on the team, they wanted me to handle it. I stopped taking ups and started working the internet leads. This was my niche. We DID start breaking records and I made more money than I've ever made before or since.

The point I'm trying to make is that the people who could close the deals would have had no chance of succeeding at what I did and if I were trying to sell cars one up at a time I would never lead the board. As Jeff said early, there are specialties that need to be harnessed. Mine turned out to be getting people in the door. Then, it turned into getting people to the website. I hate to generalize, but I've found that the most talented at selling a vehicle are rarely excellent at tenacious follow up, while the "geeks" are normally not as good working the deal in person. I've seen a couple of amazing models where deals are worked from lead to close, but in both cases the training needed to be incredible.

Bottom line - I like what Alan recommends in concept but I believe that Mike is correct in general because bridging the gap requires the right training AND the right people already in place or ready to be hired. Alan's model is possible. Mike's model is practical.


Dealer
Comment by Michael on July 27, 2014 at 4:44pm

For all those that have supervised the above activity, let alone worked with a BDC and a mutually exclusive sales force on premise, know that Jeffery, David & Alan are spot on. At best 5-10%. Answering the telephones by a sales staff at large is a bit mistake in any store that has not and/or does not monitor every call. Efficiency is gaining a staff member x 2-4 that has an exclusive skill set to gain the appointment on calls for Both sales and service departments. When a GM does have one-4, magic occurs. Furthering in developing a BDC that integrates handling the incoming calls is almost miraculous in results to the traditional model...


Influencer
Comment by Jeffery Sterns on July 27, 2014 at 5:01am
When everybody's accountable, nobody's accountable. Specialties need to be focused, measured and ....required. Focusing on all tasks results in excellence in none.

The only time I can see salespeople selling appointments ...is if it is for a bdc pay plan (shows, sells) and not to get them in for them self. Why? The process breaks down when the salesperson (specialty) begins to measure the difficulty of the deal (difficult price shopper, weak credit...or worst ever: want to come when the salesperson' s shift is ending or day off!).

I think it can only work (if it needs to work...but why does it need to work? Let bdc hone their specialty (which is also not selling a car) ....it can only work if a salesperson is detached from the sold car result and only attached to the appointment .

It is just plain too rare that a salesperson can separate and isolate his / her roles ("now, I'm making an appointment with no attachment to the ease of the deal." And "now I am selling a car with no poison from what the customer said to make me less excited during the appointment making process ."

I vote bdc specialty. And car selling specialty. If a salesperson is a star that can handle both....they will soon have no time for bdc work. Not even time for fresh ups, frankly.

And if they are that passionate about bdc work....I've seen (and done) salespeople call yellow pages with a well honed pitch and make an appointment dor themself inside of 10 dials.

Influencer
Comment by David Ruggles on July 26, 2014 at 10:07pm

Sales people avoid putting prospects in the CRM because they don't want their balls busted over closing ratio or follow up.  Dealerships typically don't even assigned orphan owners.  After all, with all of the turnover, how many times can an owner or prospect be reassigned? 

I see no way to have sales people take over for the BDC except in rare dealerships.  Dealerships need to establish rotation boards.  Those who aren't with customers or watching the lot can be prospecting or following up.  Few dealerships have the discipline to do this.

I can't tell you how often I see customers unattended on the lot or in the showroom because sales people are busy checking FB, their email, or texting.  One wonders how much of that is business related.

Recall the old days when dealers wouldn't buy sales people a computer because they figured they'd be playing Solitaire or watching porn all day?  My!  Look how far we've come.

Comment by Ralph Paglia on July 26, 2014 at 7:55pm

Mike, first of all, I would like to compliment you on handling a "Closed for Further Comment" article posted on ADM... I am not certain about why Alan Ram chose to do that to his article that you reference, so I won't try to speak for him. He is an excellent trainer and the dealers who use his services speak very highly of the results they get. And, Alan clearly stated that he was not suggesting doing away with dealership BDC's... He was calling for them to be used differently than what he is seeing in many dealerships.

For the most part I disagree with Alan's recommendation that individual sales people should be trained to handle an ever increasing set of responsibilities. Keep in mind that there were very few "Internet Leads" 20 years ago and far fewer phone calls relative to showroom traffic. In my opinion, the very same qualities that make most dealership sales professionals the best at selling to customers when they are at the dealership, work against their effectiveness when dealing with customers who are not physically present.

As a management professional, you must act and manage resources in a rational manner that will generate the greatest amount of profit. If you have a sales resource who is REALLY good at using his/her skills with certain customers, or under certain circumstances, or even on specific model lines... Our mission as management professionals should be to maximize the amount of time that sales resource is in their "Strike Zone" so they hit more home runs than otherwise possible...

I despise the use of "Round Robin" lead assignments or anything else that relies on random versus optimization criteria based assignment of sales opportunities... and that includes phone calls and Internet Leads.  Many people have accused me of being "Unfair" with these types of "Intelligent Lead Routing" strategies... To them I say we are not interested in their sense of entitlement and this is not a baseball game, it is about selling the most number of cars and trucks to the traffic we get on the showroom floor, on the phones and via the web. Fair has very little to do with satisfying customers, who have no interest in "fair". They want what they want and they want it right now.

Specialization is the most reliable and proven organizational management strategy ever developed to maximize sales, profits and employee satisfaction...

When Henry Ford introduced specialization, in the form of assembly line sequencing, it not only revolutionized his company, his specialization strategy led to an era of industrial development and profitability in America that drove dramatic increases in income and buying power for the workers who became the best at whatever job they were assigned to specialize in on a manufacturing assembly line...

When I was the GM of a dealership in San Diego, we hired two retired Chief Petty Officers... When any Navy NCO enlisted men came to our dealership, they were immediately assigned to our two CPO's on staff. It didn't matter who upped them. We closed over half of all showroom opportunities to Navy personnel because we had specialists on staff that spoke their language and understand the various ins and outs of getting LES documents and setting up allotments for the banks.  Was that fair to the salespeople out on the point? Many said no, but to this day I say yes. They were freed up to serve customers more likely to buy a car from them.

 

If I have a salesperson who does a great job selling cars to people on the showroom floor, why would I want him on the phones when his work history has already shown us that he sucks on the phones and he hates doing it? Why, why, why? My job as a manager is to find someone who is as good as he is on the floor, but is only that good with customers over the phone when he/she is focused on getting them into the dealership... Not qualifying them for finance... Not trying to figure out whether or not he wants to waste his time with that customer... But singularly focused at that point on getting the customer to the dealership.

If I perform my management role well, that very same salesperson who does so well with customers in person won't have time to be on the phones or responding to Internet sales leads because he or she will be too busy selling and delivering cars!!!

There have been too many times I have seen employees whose appearance was far too dreadful to be representing the dealership to people who arrive on the showroom... But, their personality and effectiveness would transform when seated at their cubicle in the BDC to the point that they would get 50 people a month to show up at the dealership... Thank God we were smart enough to realize that they should NOT be on the sales floor to the same degree as the salesperson who sold their appointments new and used cars... the very same sales professional who should not be on the phones as long as we keep bringing customers to the dealership back in the BDC.

 

The "To Have a BDC or Not Have a BDC" debate has been going on for a long time...

I first debated someone about this issue in 1997. It is a valid debate and there are certainly reasons galore to support both sides and perspectives. I have enough respect for Alan Ram to read his articles, discuss his opinion on the matter and then respectfully, and I mean that sincerely, disagree with his assumptions... With a couple of exceptions.

Alan is spot on when he suggests that BDC's refocus on Fixed Operations.

There is so much value to be delivered using communications specialists to drive everything from routine maintenance appointments to SOP installations and targeting customers with prime used cars in their possession to bring it in for a free service so we can make them a purchase offer, so we can buy back their car for more than any other dealer is willing to pay... Because since we sold it new, it is worth more to us as a used car than to anyone else.

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