Business Development or Detriment? You Decide.

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BDCtombstone

Let’s face it; as I write this article, as many Business Development Centers are failing as are succeeding to the tune of countless dollars lost. That’s a fact. I heard another trainer say that there are as many funerals occurring for BDCs right now as there are births. There’s actually a cottage industry in the car business built on convincing dealers that salespeople cannot be trained to handle the telephone, which could not be further from the truth. Let me say this at the outset; your people don’t suck on the telephone because you don’t have a BDC. They suck because you haven’t trained them properly. If you had done a proper job of training in the first place, you wouldn’t think that the solution to many of your ills is to subject your customers to discussing the second biggest purchase most of them will ever make with what is basically a telemarketer, or even worse, forwarding your valuable customers to some 19 year-old kids in a “virtual BDC” three time zones away. With statistics showing that customers only shop 1.3 dealerships in person these days, opting instead to decide where they’re going to buy online and on the telephone, I am openly questioning who many of you are choosing to entrust your financial futures to.

Now, don’t take this to mean that I am anti-BDC. I am no more anti-BDC than I am anti-restaurant. It’s just that there are good restaurants as well as bad restaurants and there are good BDC models as well as bad BDC models. The way many dealerships are “attacking” their phone problem would be the equivalent of someone grossly out of shape and overweight immediately opting for a risky gastric bypass surgery without first addressing the fact that they have never exercised and that their diet consists entirely of junk food and soda pop. An intelligent person might first want to address the underlying condition. Let’s put the whole BDC on hold for a minute and focus on the foundation of dealership productivity. That foundation needs to be training, supported by processes and accountability. That might not sound all that sexy or be what’s trending, but it is the truth. You need to have the proper foundation in place otherwise nothing you implement will succeed long term. If your BDC is reflective of nothing more than a failure to properly train, all you will end up doing in the end is changing the location and source of where you’re losing your customers while spending exponentially more to do it!  It all starts with real training as I outlined in the November edition of Dealer Solutions magazine. Please feel free to go back and reference that article. You have to recognize that there’s a difference between thinking you “trained” your people and really training and maintaining your people. You support training with the right processes, and then you hold your people accountable. What many of you are looking for whether you know it or not is a culture change.

You want a CULTURE of business development at your dealership. You want your inbound sales calls and Internet leads converted to customers on the showroom floor. You want your unsold customers followed up professionally and consistently. You want your sold customers followed up and valued as a source of repeat and referral business. I get that. The reason that doesn’t happen in many sales departments is because salespeople and managers have not been properly trained in these areas and they don’t have a game plan that they are comfortable with and confident in executing. With proper training comes confidence. With confidence comes results. When results are achieved, your people start doing things not just because you’re making them, but because they want to. When results are multiplied, momentum is created and now you are seeing a culture change. Doing the right things, you can expect to realistically see significant change and strong results almost immediately. Instead of adding tens of thousands of dollars per month of bottom line personnel expense to your statement in an attempt address your deficiencies, invest LESS THAN 10% of what you were going to spend and address the underlying issues causing these deficiencies with effective training and implementation of some common sense processes. The results might amaze you. Understanding that this is an article written to encourage thought (and an attempt to stop some of you from making a very expensive mistake) versus a complete game plan for a dealership, let me share a couple examples of high return processes that any dealership should implement to change the culture.

 

As a dealership in 2015, I’m sure you have call monitoring. Can you honestly say that every inbound sales call is listened to by a manager? Many of you will say “we listen to some, but not all”. In the prioritization of management activities, what in the world is more important than listening to your salespeople talking to customers that just called your dealership who want to buy cars today? Too many dealerships view call monitoring as an accountability tool when they should also be using it as a save a customer tool! As a substitute for actually listening to calls, some dealers will subscribe to services that “critique” or score sales calls. These services are not a solution but are instead a weak alternative that allow dealers to think they are doing something to address the problem. Here’s what I mean; you subscribe to one of these services with the result now being that your managers don’t feel they need to listen to your calls because it is being done for them. Days later you might receive a summary of your calls complete with scoring and critiques. The only problem with that is that most of these customers have already gone on to purchase vehicles elsewhere! You know a week later that Tommy missed an opportunity to ask a customer that already bought a car from your competitor four days ago for their phone number. Really?! As an owner or General Manager, I don’t need to hire a company to evaluate sales calls after the fact. I need my managers listening to EVERY call throughout the day and recovering missed opportunities to sell cars. That customer who called in on a specific preowned vehicle at 10 AM today will be out somewhere buying a car at 6 PM tonight. If we listen to that call at 8 PM tonight, it’s too late! That’s why, throughout the day (hourly) your managers HAVE TO listen to calls and quickly resolve missed opportunities to do business. What activity is more vital for your managers to be spending their time on? This is an invaluable process that incorporates ultimate accountability.

If 18 sales calls came in today, your managers need to be listening to 18 conversations. That is NON- NEGOTIABLE. They then have the opportunity to constructively coach your staff while saving opportunities. If your managers don’t think they have time to do this, you need to reprioritize their day. What is another benefit to this? When sales people know they are being held accountable, they naturally tend to take every call more seriously. You will find that taking these common sense steps will tend to eliminate your urge to take on the enormous pure expense in the form of a second group of people hired to do what the first group should be doing! (Aka most BDC models being pushed today)

Many of the issues we see at dealerships are also the result of managers who don’t necessarily know how to manage. While many dealerships might employ good “desk” people and “closers”, they don’t all have managers with good management skills. We see that because of the way we tend to select our next manager.  One of the main criteria seems to be an ability to simply sell a lot of cars as a salesperson. Picking managers that way would be the NFL equivalent of taking the best player on the team and making them the coach. The best coaches in NFL history were not necessarily the best players. Why? Because it is a completely different skill set. Yet, what do we tend to consistently do as an industry? We take our best players, we give them very little if any training in how to actually manage, and then we’re surprised when they fail. The time has come when managers actually need to know how to manage. When I conduct one of my 3-day “Management by Fire” events around the country, I am shocked by how many people we have in management positions who have received absolutely no real quantifiable training in how to manage. That might be one reason you have five salespeople standing around outside talking about the most recent public sex scandal for two hours while waiting for one fresh up while your managers sit inside and hope someone brings them a deal today. No meaningful change will ever happen at your dealership despite poor management. Either your managers are good or you need to get them the proper training to make them good.

Here’s another high return process. You want your salespeople focused on generating repeat and referral business yet your pay plan might reward them equally for standing by the front door and selling floor ups that were coming in anyway. That might be why you have a culture of those same five salespeople standing around and waiting for hours on end. Gear your pay plans to reward individual business development. In other words, compensate your staff additionally for generating and selling actual tracked referrals as well as cultivating their own repeat business. Again, none of this will happen without proper training. When salespeople realize that they earn more by generating and selling repeat and referral clients, and they have a plan for accomplishing that, they shift their efforts to those activities. This is very similar to the phenomenon seen when you put a big flat commission on an aged unit. They may have been walking around that car for the past six months, but the day after you incentivize it, it’s gone. Why? Because they’re working the pay plan. You want them working the pay plan in a way that generates additional traffic while at the same time reinforcing the culture you want to see.

These are just a few things you can do to create and reinforce a CULTURE of business development. Rest assured there are many more. Before doing ANYTHING else you need to address the underlying conditions that got you to this point. At the end of the day, you will almost certainly find that you don’t need more people. You simply need the people you have doing a little bit more. Think about it.

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Alan Ram
Alan Ram, President and Founder of Alan Ram's Proactive Training Solutions, is recognized by most as the best in the automotive industry at increasing individual, as well as dealership productivity through effective utilization of the telephone, Internet and client base management.
  • Carlos Lopez-Lay

    Totally agree, I have been dismantling my BDC team, it brought additional costs with little or no benefits.

  • Peter Viljoen

    Expecting managers to listen to every call is complete nonsense and shows a clear lack of retail experience! They would be sitting listening to calls all day and doing nothing else. With over 100 years of retail activity, we still sit with the problem that sales executives simply do not follow-up with customers so what is going to change now? Clearly the training methodology is flawed, combined with attracting sub-par salesmen because the industry still persists with hiring salesmen at the lowest possible salary…..

  • Don Milosch

    I couldn’t disagree more. I fact, i think the only business hurt by BDC’s is phone trainers. Its so much easier to train a small group of people with the right skill set and mindset to handle inbound phone and internet leads.I have found that having a group of people who’s entire purpose is to get appointments is the best way to generate more appointments. I love Alan’s training, and Firephone, etc, and we actually use it in training my BDC staff. However, I disagree with his take on BDC’s. Ring,Ring.

  • I’m amazed when I hear people say it’s ‘nonsense’ to expect managers to listen to calls. Before we had everything made digital, and had CRMs automating the job of contacting the customer, all of us were able to listen to calls because we prioritized our day. Since the advent of newer technology, leaders have great tools like a CRM to see what’s going on with every deal so YES – Managers DO have time to listen to the calls their people receive and YES, if they did daily one on one meetings they would have time to properly coach their team. A BDC isn’t a bad thing, if done right, but frankly, with less walk in traffic and consumers doing more of their research online, sales people have more time than ever to be training and learning how to do well on the phone. Kudos Alan!