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Just One Internet Department Structure

Creating a basic structure for your Internet department should be one of the simplest tasks for a dealer.  Unfortunately, too many decision-makers at dealerships attempt to get in the way of how an Internet department operates.  One primary element to a department’s evolution is determining the hierarchy of power.

In two previous blogs (Preparing To Grow Your Internet Department – Part 1 and Part 2), I’ve detailed the beginning steps to bringing aboard new talent onto your eBusiness team.  Allow me to first clarify that I understand many people in our industry are pushing for an open floor.  “Divide and distribute all leads to everyone!” they chant.  “All customers are Internet customers so all salespeople should handle leads!”  To this I say, “Not yet.”  Most dealerships didn’t initially hire their entire floor with the expectation for them to handle leads so they likely aren’t the right “breed” for the position. (This can be a later blog rant).

Why I point this out is that MOST dealers still have some form of department.  Specific people dedicated to handling (and possibly selling) the Internet leads for the store.  So if you’ve decided on a separate department for your Internet opportunities (as most dealerships have), you need your team to understand their power levels.

On the sales floor, the hierarchy is clear.

  •   Dealer/General Manager
  •   General Sales Manager
  •   New and Used Car Managers
  •   Sales floor


Most Internet departments are likely best off if they function under a structure separate from the sales floor.  (Working together is important, but not working for.)

The hierarchy is most ideal if the Sales Management and Sales team doesn’t retain power in the department.

  •   Dealer/General Manager
  •   Internet Director/eCommerce Director/Business Development Manager
  •   Internet Sales Manager
  •   Business Development Agent/Internet Sales Coordinator/Customer Contact Rep


It is my opinion that no one should be responsible to report to anyone equilaterally.  The ISM shouldn’t have to report to the Sales Managers.  BDC staff should never have to “explain themselves” to the sales consultants.  They are independent entities that work together, side by side.  Too many personal agendas get in the way when one with a “sales” and “profit” agenda controls people with an “appointment first” agenda.  One sales manager setting pricing or controlling follow-up process to make their own showroom job easier usually creates obstacles for the Internet person focused on bringing in qualified customers in the first place.

When creating your Internet department, make sure to set specific rules regarding the hierarchy in the dealership.  This will allow people to focus on their own jobs rather than how someone else should do theirs.


 

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Tags: Consulting, Dealer Knows, Training, Webb, automotive, dealerknows, dealership, department, hierarchy, internet, More…joe, power, structure

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Comment by Marc Bodner on March 20, 2012 at 8:18am

If you look to other "bricks and mortar" type retail establishments, the in-store sales and management structure is different from the online structure.  Inventory is shared, the store can be used to return items from online, etc.  What makes the auto dealership a bit different is the purchase is not made completely online.  An "internet" customer has to invade the space of the "brick and mortar" sales group.

The decision really has to be made at the dealer principal or GM level.  If internet/BDC is nothing more than a lead generation department feeding the sales floor, that structure and management process needs to be put in place.  Many technology companies have inside "sales" departments that are tasked with developing and nurturing leads to be handed off to the sales people.  They get a portion of the deal as part of their comp plan making an additional 20-25% on top of their base salary.  They're evaluated on how many leads they have driven into the sales people.  It does get a bit contentious when leads don't buy, however expectations on both sides must be tempered with historic closing rates at the dealership.

The decision on which model is going to be established is up to senior management.  Whatever that decision, that culture must be embedded in the organization and policed firmly.  Both work. 

Comment by Steve Duff on March 20, 2012 at 7:48am

In my case, I'm probably just extra fortunate to have a Dealer Principal who totally backs our new E-Commerce/BDC dept. When my dept. was challenged by SM and GSM in recent past, I got a written directive from the owner after discussing the issue with him. The directive which he posted as a note on his notepad was (paraphrasing) "don't need more chiefs in ECD/BDC" (we have myself over the dept. and a BDC manager as well) and "nobody directs any ECD/BDC staff without ECD Director's approval. The GSM had attempted to commandeer the department, and in the process attempted to make us look a little bad. The next day, he, my BDC Manager, the Dealer Principal and myself had a meeting where the DP pulled out his notes from the day before and the GSM was put back into his place. He was gone two weeks later for a multitude of things. I had the forethought to ask the DP for a copy of his notes which he gladly gave me.

 

A few weeks later, a new employee who was acting as a GSM but was not really given the title, came in and tried to do the same thing but I rebuffed him and now he stays away. So I guess having a forward thinking owner who sees the importance of internet and good BDC is crucial. But equally crucial is that an Internet/E-Commerce/BDC director has to "grow some" and not be shy of protecting the turf.

I predict that within 5 years, based on what I read here and elsewhere, and on my own experience (disclosure: I'm really an automotive green pea. I've been here at this dealership a year and a half, up until November was online marketing manager just involved with websites, search, creatives for online and print, and helping with TV ads but didn't run BDC or anything until I proposed our E-Commerce Dept). But I have a ton of sales/marketing experience covering all of my adult life. This aspect actually has helped because the owner didn't want a "car guy" to take the dealership into the future. 

So anyway, in 5 years I think the sales force will be mostly inside, working the phones and internet, and the people outside on the lot will be hourly employees who greet customers, do walk-around "final inspections" and test drives, then bring them into the sales team to close the deal. That's sort of the rough draft version of the vision I see. (sorry for the long post!).

 

Comment by Marc E McGurren on March 20, 2012 at 7:06am

I think we agree mostly as you state, "Getting a sales manager involved is a necessity, but involvement doesn't denote control over the area, which, unfortunately, is what most stores give their SMs."  

Most stores SMs do have more authority and this is where it gets muddy.  I was that internet manager that always seemed to fight an uphill battle.  No matter the data I brought to the table I seemed to always be going against the grain.  The more I talk with ISMs and folks across the country this is the case many times as well.  

What I did find was that keeping the sales managers in the loop and finding out how to make them feel warm and fuzzy went a LONG way.  I became a friend that sold a ton of cars with great gross rather than a foe who was giving away their hot inventory.   

Therefore, in theory, I agree, but in reality this isn't the case w/o a GM/Dealer/Dealer Principle backing this 100% and taking an active role in the development, growth, and direction of their digital marketing.  


Comment by Joe Webb on March 20, 2012 at 3:45am

Marc - Tom Gorham nailed it on the head when he said "The experienced Internet Manager suddenly becomes out-voted in running his/her own department by people with little knowledge about running an Internet Department.".  
While I agree with you that developing an approved pricing matrix and weekly meetings can be beneficial to a more rewarding relationship between the two, I can assure you this doesn't happen in most stores.  I developed a pricing matrix back in 2002 we used to use, and STILL managers would want their say about how aggressive (or high) they should be.

Why I believe a two hierarchal system is possible with either new departments (which their are none) or established departments is that approval from ownership and GM goes a long way in enforcing structure.  A GM gets paid on total gross as well so they understand, when determining pricing with their ISMs and SMs, how it affects the overall store, not just their own pocketbook. SMs will supply pricing for the matrix that makes their jobs easier while a quality General Manager will choose pricing that is best for ISM, SM, and customer.

Getting a sales manager involved is a necessity, but involvement doesn't denote control over the area, which, unfortunately, is what most stores give their SMs.

Comment by Tom Gorham on March 19, 2012 at 7:11pm

@Marc E McGurren - I understand your point about the the sales managers wanting to be a part of the decision-making in a department they felt was irrelevant for years for lack of vision.  It is NOW their bread and butter.  Late to the table... 

The problem is that they bring old-school prejudices and practices to the table and pretend to be sudden experts on the Internet.  An OEM seminar or two and they know it all... but unfortunately no depth of knowledge, experience or understanding. The experienced Internet Manager suddenly becomes out-voted in running his/her own department by people with little knowledge about running an Internet Department.

When I hired my Assistant Manager a decade ago (he's still with me) I chose him as a "green pea" so he wouldn't have those old habits to drag into our future.  Right decision!  So now we must drag managers who bring those old habits into the future ... not a problem... until you give them decision making authority for the Internet Department.

Comment by Marc E McGurren on March 19, 2012 at 6:07pm

Joe, love this article and I agree with you in theory.  This is a great way to start from scratch, but unfortunately is not the case in most dealerships.  Sales managers, GSM's, and GM's get paid on the entire departments gross profit, not just the floor sales.  So with that said, they want and in my opinion need to be bought in and a part of the process.  They want to have a say in how their paycheck is affected, how their inventory is being handled, and ultimately *want some sort of control.

So how do you go about doing this?  Getting them involved whether they want to or not.  Most *want to have control yet do not want to or "have time" to be a part.  I believe by having a pricing matrix that they approve of, process that they were somewhat involved with developing, and then having weekly/daily talks with the Internet/BDC manager that this helps alleviate "us vs them" mentality that can take place inside many dealerships.  

I like the proposed idea, I am just not sure how most dealerships could transition into something of that nature. 

Comment by Steve Duff on March 19, 2012 at 4:41pm

It would be hard to put a dollar figure on the amount of business lost over the past year due to imcompetent handling of leads and phone ups unfortunately. So you may have to make some assumptions that you feel the senior management could agree with. Suppose the bungling of the leads, improper or non-existent followup (etc) was costing the dealership 5 to 10 deals a month, do the math from there. And be sure to extrapolate it over 12 months.

Comment by Steve Duff on March 19, 2012 at 3:15pm

BDC / Internet Dept./ E-Commerce Dept being fairly interchangeable terms I have assumed in my last post. Our E-Commerce Dept. includes our BDC, and our BDC staff are referred to as Internet Sales Coordinators. They are trained to be extremely professional on the phone, answering it the PROPER way (instead of "SALES MAY I HELP YOU"). And the emails are properly formatted, no SHOUTING, have links to product pages, and links in the signature, addressing questions, ending email with a question, etc.

Most floor salespersons don't answer email or phones professionally and can help ruin company image.

 

Comment by Ashley Corning on March 19, 2012 at 3:13pm

Thanks Steve, I know it all has to do with $$$ $$$$ and $$$, but other than grosses on the sales we facilitate, idk how to put a dollar figure on it!

Comment by Steve Duff on March 19, 2012 at 3:10pm

Ashley, one thing you might focus on is the salvaging of lost opportunities and salvaging of lost image. What I mean is that with a focused BDC professionally taking all calls and professionally responding promptly to internet leads, you are sealing up profit leaks and stopping the mishandling of leads that are responded to. There are profit leaks all over the place and senior management knows this. When you can demostrate that you are helping make their advertising dollars go further, you'll get some traction I'm sure.

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