Think Twice Before Going Under The Knife

Think Twice Before Going Under the Knife

By: Alan Ram

Let me say at the outset; I love BDCs. Like anything else though, there are efficient, productive models as well as ineffective ones. Like plastic surgery, when done wrong, you can end up creating more problems than you solve. The acronym “BDC” does not have an absolute definition. There are several variations as well as activities that any BDC might be engaged in. Let’s talk specifically about how phone ups as well as Internet leads are handled at your dealership.

A typical call to my office yesterday: A general manager calling from Washington State wanting training for his BDC that his dealership is in the process of setting up. My first question was, “What will your BDC be doing?” First and foremost on his mind was handling inbound sales calls as well as Internet leads. He followed that up by telling me that his sales staff is absolutely terrible on the phones and that listening to call monitoring makes him nauseous. His solution is hiring three or four people primarily dedicated to handling his sales calls and Internet leads. I replied, “So, your sales people are terrible on the phones? How much have you actually trained them?” There was a long pause before he replied, “We really haven’t done any training.” Well, there you go! That wasn’t too hard to figure out. His desire to set up this BDC was born out of a failure in training. You can’t blame your people if you have not properly trained them. Think about it this way; because you have failed to train, you’re now looking to hire a second group of people (that you probably won’t train properly either) to do what the first group should be doing. Talk about an expense! Train your people to do the jobs you hired them to do! If I sell cars at your dealership I should be qualified to talk to customers not only face-to-face, but on the telephone and Internet as well. The skill set required to do so does not warrant the expense of hiring additional staff.

Let’s take this a step further. One of the biggest challenges we have at dealerships today is finding good people. Put yourself in the position of a good salesperson looking for a place to work. You walk into a dealership to interview. It’s a beautiful facility and a great brand. Then the person interviewing you drops the bomb; “By the way, our BDC takes all sales calls as well as handling our Internet leads.” At that point, I would imagine you would stand up, thank the interviewer for their time, and walk out the door to the dealership that lets you handle phone ups and Internet leads. Do not kid yourself. That is a huge challenge that many dealers hadn’t considered, but are now facing. Good salespeople avoid working at those dealerships that severely restrict their opportunities and those dealerships tend to become a culture of telemarketers and greeters.

Here’s something else that we all know: Customers today are more informed than they have ever been. This is no time to be dumbing down your process. Your customers have specific questions they want answered prior to touching tile at your dealership. Non-salespeople are not equipped to intelligently discuss the product, competition, option packages, vehicle specifications or inventory. Unless your customers are all simply calling to get directions to the dealership or inquire about your hours, your TRAINED salespeople should be getting the calls. Customers would also prefer to talk to the person they’ll be talking to when they get there. I am shocked when I hear that manufacturers are encouraging dealers to set up BDCs with non-salespeople taking calls and handling Internet leads when survey after survey has shown that customers hate being passed around. By having non-salespeople handle this initial lead, we’re simply starting to pass them around even earlier. If we truly care as an industry about what the customer wants, in this case, the customer has already spoken.

A good BDC model is lean and efficient. Some critical functions your BDC can and should be performing are handling inbound as well as outbound service and parts calls. A well-run service BDC can be an invaluable asset. Your BDC can also be making third party follow-up calls to unsold customers as well as generating traffic with sold customer campaigns. There are plenty of high return activities your BDC can and should be focused on. You might just want to reconsider adding sales calls and Internet leads to that list. No dealership is going to consistently perform at a high level despite a lack of effective training as well as strong processes. Those are the foundations of any successful organization. Before you put your dealership under the knife take a good look in the mirror. Let’s make sure that your BDC is an investment versus a reflection of your failure to train.

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Comment by Kevin "Friend Me" Bradberry on December 29, 2014 at 4:54pm: Alan,

I enjoy reading your stuff! In this article in particularly you mentioned that " One of the biggest challenges we have at dealerships today is finding good people.

Partnering with an excellent automotive recruiting company will ensure that you're ability to find good people will not be an issue. Partnering with an automotive recruiting that also does BDC installations and optimizations and who understands the dealership's needs on both the variable and fixed ops side can make this whole BDC headache a thing of the past. Thank you for sharing your wisdom. I admire your work.

Comment by steven chessin on December 26, 2014 at 3:29pm: The real confusion of "bdc vs sales" results from several issues -- the biggest is lead volume.

A giant BHPH that does radio commercials announcing their vast inventory, "We Accept All Credit Applications" --- and have "Operators Standing By" is all the elements that demand full lead management. The slower the pace and the higher the prices the lower the need to what most consider a traditional BDC.

However, regardless of the inventory size or the lead volume a properly managed BDC will always have tons of work to do. I met with a used car store with 100 cars and was told, "We have no BDC because we don't get enough calls and emails to need one." I told them, "You have it backwards. You don't have enough calls and emails because you don't have a proper BDC". .

Comment by Brian Bennington on December 26, 2014 at 2:55pm: Happy Holidays Alan, I love posts like yours as they are so provocatively stimulating. Checking Mike Warwick's bio, his position as a Digital Marketing Director at Kelly Group lends some solid credibility to his opinion and I appreciate his participation here. His first statement about management "choosing the path of least resistance" says it all, but it's believable because, if you ask most reps why they want to be managers, the usual answer will be something related to power and control, and "sprinkled with things he thinks his boss wants to hear," but nothing about sharing their sales knowledge with those they'll manage. Also believable, because the people who promote them generally lack an understanding of what a manager really should be qualified to do. Ah...how terribly damaging to business is the fear of promoting someone who might know more than the "promoter."

The manager who commented to Mike that he "loves his BDC" because "they are much easier to manage" is an excellent example of a manager whose prime concern is making his job easier. Reps can be managed, but it takes a lot more thought than handling telemarketers. The upside is when a manager is successful, he usually has earned a more tangible level of respect and admiration from his reps than a room of "phone-callers." They don't know or care how savvy a manager is about handling customers and deals if all he tells them is to keep making the calls. Frankly, BDC is about the safest place for non-salespeople to be in a well-run aggressive sales department. Are there some people "cut-out" to do a good job in BDC? Absolutely, but if they figure out exactly what the endgame actually is and understand how to constructively move in that direction, they'll probably demand to be a genuine sales rep. Come to think of it, the BDC might be a good place to recruit reps....

Comment by steven chessin on December 24, 2014 at 2:54am: "Danger Will Robinson !" A strong bdc converts at 15% or more. Why fix what ain't broke ?

Comment by Brian Bennington on December 23, 2014 at 6:32pm: Strong post Alan, In your fourth paragraph, you comment you are "shocked when you hear that manufactures are encouraging dealers to set-up BDCs with non-salespeople...." Come on, Alan. Why would you expect to get credible advice from manufactures when they get their "list price" from every vehicle they deliver. Can you imagine a dealer asking a manufacture, "If I buy six of your Belchfire LaStatus models instead of three, can I get an extra 10% off"? Every discount or special interest rate created by manufactures is designed to do one thing. Create dealer demand (to move more vehicles) and they know well in advance they can afford it.

They do share the "I don't care who sells the vehicles as long as they're sold" mentality with dealers. And, because of dealers' inability to attract and/or train strong salespeople, they've devised a way to eliminate needing reps talented in the art of negotiating by simply going "one price." That's also the reason for the existence of third party negotiators (TrueCar, etc.). That makes sales training one hell-of-lot easier. The fact that they're willing to forgo profit opportunity to do it shows just how little they're willing to work at it. I'm sure you'll agree that "The lower you set the bar, the less effort it takes" is true in any endeavor!

I've often heard that being a strong sale rep (negotiator) means the rep is more inclined to put profit above everything. What "bulls..t"! A strong sales rep begins thinking how their new customer can generate additional business before the customer ever leaves finance. I know I did, and even an small-time marketer like me knows that it won't happen unless the after-purchase follow-up & service is superior. Most dealers (and manufacture reps for that matter), no matter what they tell you, aren't strong sales people. Primarily because there are so many 2nd, 3rd and 4th generation owners who never had the motivation to "get really good." There are exceptions, and they're the ones you want to work for. They recognize strong sales reps and both encourage and reward them.