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Comment by Doug Davis on May 28, 2013 at 5:51pm

Stan, that is a nightmare. Friday the 13th or the Exorcist.

500 third party leads?  What do you figure that cost?  $18 per lead.  That is $9000. They sell them to a half dozen dealers ...Ka-ching!

If you are going to feed your BDC leads, with a 3% closing ratio, you need people that are cheap and replaceable.

Do dealers think there is a farm where they grow these leads?  Maybe, they dig them out of the ground like copper or gold.  News Flash: They come off of the internet and mostly from organic search.  I haven't bought leads in years.

Here is a challenge to any dealership. Give me half of that amount (per month) and I will flood a dealer's website with traffic.  For clarity, no black hat tactics and nothing that would harm the reputation of a store.  If after 4 months (a fair trial), you don't like the results, I will give you 100% of your money back.

Comment by Mathew Koenig on May 28, 2013 at 5:08pm

Thanks Chris. I'm not dissing the hard working call center folks though. Many are great. I'm saying that with great sales people, resulting from great leadership...they shouldn't be necessary. :-)

Comment by Chris Hill on May 28, 2013 at 5:06pm

There it is = IMHO...(just my opinion so if you work in a call center don't blow up...) In my opinion, if leadership made sure to train, monitor, measure, re-train all of their staff on the phone, both inbound calls and prospecting calls, they wouldn't need to employ another team of people to handle calls for them.

Well said Mathew Koenig!

Comment by Mathew Koenig on May 28, 2013 at 4:39pm

Good info Larry. I have to say that in my opinion it can all be summed up with something that hasn't changed since the days of horse trading:

They have to have a reason to choose you over someone else.

Google says "fast & easy" are the drivers. Neilsen, xAd, telmetrics say "Right Place, Right Car, Right Price" are the drivers but basically we all know that it has to be the right car, and right price but the variable is "where".

It seems like the person who, on the phone for example, can make the person feel like: "buying a car here will be faster and easier than anywhere else...plus you'll get a great deal and a car you love..." is going to win the day.

I feel old saying this now but "back in my day" every sales person had to learn to be a rock star on the phone. Our calls were recorded and we tracked all of the numbers. If we stunk on the phone, we didn't get to take phone ups so it forced us to hone our phone skills. Our dealer spiffed us on call to show ratios which also helped. 

IMHO...(just my opinion so if you work in a call center don't blow up...) In my opinion, if leadership made sure to train, monitor, measure, re-train all of their staff on the phone, both inbound calls and prospecting calls, they wouldn't need to employ another team of people to handle calls for them.

Comment by Stan Sher on May 28, 2013 at 4:31pm

@ Mark Tewart: Excellent comment.  What I found is that even when it is managed properly if there is no real buy in from the top it will fail.  The top (executive management) needs to communicate better with the managers that are managing these efforts.  It is great that they communicate with sales and finance, service and parts.  Recently, I witnessed a brand new BDC that is being built.  The dealer pushed for buying over 500 3rd party leads before investing in making 1st and 2nd party traffic better.  The dealership has a new CRM and are working fresh leads from the first of the month without any overflow leads from the past 30-90 days.  Appointments are all of a sudden are down.  5-8 appointments per day instead of 22 and 22 on a Saturday instead of 30-35.  Big changes happening with used car merchandising and call volume is down.  The store stopped doing gimmicky promotions and calls dropped.  When the manager got approached by the owner as to why the department was under performing the hands on manager had their reporting with them.  They saw that most of the traffic was third party leads and 30-35% of the third party leads that came through had been returned for being bad.  The BDC Manager was also skeptical that another 30% might be bad because it seems that 3 out of 5 leads contacted turns up bad because people on the phone say they never submitted a lead of just tell the BDC rep to go scratch.  Needless to say the BDC Manager had a full handle on the whole situation and was fully accountable and capable of doing the job.  Employees were properly managed and trained and the CRM was finally starting to do what it was supposed to.  That did not stop the qualified BDC Manager from being replaced by one of the BDC reps who only has 6 months experience working in the BDC (let alone a dealership) for a lot less money.  

Bottom line, it is an expense and a large one.  I spoke at the New Hampshire Auto Dealers Association conference last week.  I had a choice to attend one session since I was speaking two sessions after that.  I decided to go watch a session where a real dealer was speaking.  He talked about technology and how to manage success.  He even talked about hiring an expensive eCommerce Director.  He said that the first 4-6 months were the hardest because everything was being build and even he was stressing how expensive this project was.  He said he compensates is director like a real sales manager and that even till this day it is expensive.  However, he has the right person that can manage all the tools (dealer.com, autotrader, crm, vAuto, etc...) and that it takes the burden off to be able to manage the whole dealership.  He found a way to justify the expense.  He gave it time and realized that is the way to go.  I worked for a dealer that knew this is the way to go and had that expense justified over the first 9 months of being in business.  The most successful dealerships and dealer groups have justified the importance of the BDC and realize that it is very much.  The reason why BDC departments fail is because they are never given the proper chance to show what they can do.  Everyone wants magic to happen overnight especially because we are in a 30 day business.  It takes 1-4 months of delivering 30-40 units per month of a BDC before you hit 60, 70, 80, and 100+ (months 5-10).  From there the process needs to be consistent.  When this is understood there will be a more positive outlook on BDC departments.  Now there are situations where a BDC is not needed.

Comment by Chris Hill on May 28, 2013 at 4:13pm

Larry,
Fantastic break down and post!

Comment by Doug Davis on May 28, 2013 at 3:42pm

It has and will be about good people. You can't pull a big wagon with ponies.

Comment by Richard Robbins on May 28, 2013 at 3:08pm

Where is the "LIKE" button?! Well stated Mark!

Comment by Keith Shetterly on May 28, 2013 at 3:07pm

@ Mark Tewart:  Excellent point "My final thought: If you were to mystery shop your salespeople on the showroom and find out what they did without training, you would not give them more responsibilities to fail at. "

Comment by Mark Tewart on May 28, 2013 at 3:04pm

Thanks for the post and the good running debate it presents. There are good arguments for both sides. 90% of BDC's fail within 6 months. Why? Is is because it's a flawed concept? Is it because BDC's are obsolete? It's because of the same reason most things fail or do not reach potential in a dealership. That reason is a lack of management, leadership, processes, training etc. Without the key critical components it's just another failed department. I just mystery shopped three dealerships. All three were at the dealerships requests. BDC and non BDC, the results were horrible! The time for response was horrible or non existent on two of the three. The autoresponders emails lacked any copywriting technique and value. Only one called back and the call was lacking the use of proper phone training. Follow up emails were promised but not delivered. The common problems in most dealerships exist because of a lack of leadership, clearly communicated expectations, follow through and follow up on those expectations and little to no TRAINING. Our industry wants magic bullets and there are none. Shiny objects will not work without constant training. My final thought: If you were to mystery shop your salespeople on the showroom and find out what they did without training, you would not give them more responsibilities to fail at. 

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