Hillside Honda Excels with Five Essential BDC Components

Four years ago, I accepted a part-time position as a Business Development Center (BDC) representative with a small dealership in Connecticut. Immediately, I realized it would not be a part-time job for long; it was the new career I had been looking for. Within two years, I was the BDC manager, and leading a BDC proved to be as rewarding as it was challenging. Our dealership delivered between 100 and 160 cars per month – respectable numbers considering the market available in Connecticut.

In July of 2006, I decided it was time for a change.  I wanted more of a challenge and more opportunity for growth.  Through my networking, I was introduced to Joe Shuster, general manager of Hillside Honda, a high volume metro dealership in Queens, N.Y.

Hillside Honda is located just north of JFK airport in Queens, which according to the census bureau is home to more than 2.2 million people.  Within a 17 mile radius of the store are 15 different competitive Honda dealerships.

The store's ability to deliver so many cars while operating under their many selling constraints intrigued me.  Hillside Honda has no room for expansion. They house inventory in the showroom (12 to 15 at a time) and on the roof of the facility.  The rooftop provides room to showcase 10 to 15 new vehicles along with used inventory, and it also has room to store service vehicles.  This accounts for a total of 35 to 40 units at any given time.  The balance of their 425-unit inventory is stored off-site at multiple storage facilities.  Some are a few blocks away; others are 10 minutes away.  The last huge challenge is customer parking.  It almost doesn’t exist.  Customers can use metered parking in front of the dealership or they can park on side streets.  

Shuster and I had several conversations about how a successful BDC should operate. 
At the time, Hillside was delivering a substantial number of units per month, but they wanted more. Their pursuit to deliver more vehicles further inspired me so much so that when I was offered the position of BDC manager I accepted without delay.

My first responsibility was to bring the BDC’s penetration to 50 percent.  This goal, while considerable, was very attainable. Achieving this objective would require attention to the following five components: 

• Staffing
• Incoming Sales Calls and Appointment Setting
• Unsold Showroom Follow-Up
• Lease Retention 
• CSI

Staffing

My first priority was to make sure we had aggressive, self-motivated representatives handling the phones. Too often BDCs are filled with phone operators instead of salespeople.  Many people are hired solely on the merits of their interview. Candidates for a position at Hillside Honda are interviewed, trained and subjected to role playing prior to receiving a job offer. By training them on the basics and role playing telephone calls, we are able to better select candidates.  Constant turnover weakens the relationship between the sales department and the BDC.  Consistency is one of the greatest strengths in building a successful, enduring sales department.

Incoming Sales Calls and Appointment Setting
In the past, representatives were given price sheets and told to negotiate from invoice. This practice was immediately changed.  The representatives were trained to use power phrases, handle objections and how to answer customer questions – providing just enough information to set an appointment, while leaving the customer feeling satisfied with their phone call experience. If you give the customer too much information, there is no need for them to visit your store.

Each representative is evaluated monthly, so job performance doesn’t falter. Four random calls are selected and reviewed with the representatives.  A bonus is attached to a perfect call.  This motivates the representatives and keeps them focused every time they answer the phone. When a call comes in, they have to assume it could be a bonus call.

When setting an appointment, the customer is told to ask for a sales manager when they arrive at the dealership. This makes the customer feel special and provides a smooth transition to a salesperson. The stage has been set for the sale.

Unsold Showroom Follow-Up

An average of 1,400 customers per month visit Hillside Honda. The BDC is responsible for more than 1,000 customer visits.  Practicing under the belief that 100 percent of the customers that enter the dealership are there to buy, we must follow up with those who do not make a purchase decision during their visit.

Every customer is called the next day, and an attempt to make an appointment for a return visit is made. We pursue every customer with the same aggressiveness. Negative feedback from the showroom floor isn’t tolerated.  Everyone is a buyer, and if we didn’t sell them a car, it’s because we haven’t done our job. Notes are entered in the Higher Gear CRM system, opening a flow of communication between the salesperson and the BDC. This affords the salesperson an opportunity to be involved in the follow-up process.

A scripted series of questions is used during the follow-up call.  Customers don’t always tell their salesperson the real reason for not making a purchase decision, however, when speaking to a BDC representative who asks the right questions, they usually open up.  Once the true objection is identified, the BDC representative uses the objection to close the customer on an appointment to return to the dealership. Our goal is simple: 100 percent follow-up.

Lease Retention

Contrary to the name, most Business Development Centers never develop any business.  They should be called BMCs, Business Maintenance Centers, as they do nothing but maintain current business.  If the phone doesn’t ring, the representatives will do nothing to generate business.

One of the most valuable assets an automobile dealership possesses is their customer base.  Everybody in this industry would agree that the easiest to sell and most profitable customers are those who have purchased from you in the past. With that in mind, a five-step system has been implemented to track and contact these customers. An assertive, detail-oriented representative is assigned exclusively to this task.

Our lease retention system is as follows:

• Customers are sent an initial letter introducing the leasing coordinator, reminding them that their lease is nearing maturity and advising them that they will be contacted soon.
• Customers are sent a second letter informing them of a pre-set appointment for their end-of-term inspection.  This inspection will be done by a new car manager at the dealership. This letter puts the customer at ease because they can keep their appointment without having to worry about making a buying decision.
• Contact is then made by telephone to confirm or reschedule (if needed) the appointment for their free end-of-term lease inspection. Most customers reschedule, however, this is still worthwhile. Contact is made five months prior to lease maturity. Customers are already considering a new car and possibly worrying about wear and tear and over-mileage expenses.  Most customers don’t even know that they can get out of their lease early, and they respond favorably once informed.
• Non-responsive customers will be sent a barrage of brochures, coupons and promotional fliers. This will continue along with constant phone calls until the customer makes and keeps an appointment or until we confirm that they have purchased elsewhere.
• Tracking is essential and must be done daily.  A 3 feet by 5 feet easel and pad are right next to the lease retention representative, where each customer’s time frame and status is listed.  The old adage of out of sight, out of mind is not a factor here.

CSI

Past practices proved unsuccessful once again. On average, 500 calls per month were being handled by one representative, amounting to 20 to 30 calls per day. This massive undertaking prevented the representative from focusing on new business.  The customer call list was divided among four representatives in the BDC, affording them time to focus on their mandated five to seven CSI calls, as well as their other responsibilities.

Each customer is contacted up to three times.  They are congratulated on their purchase, reminded that we will be here for them after the sale and asked five survey questions similar to the questions American Honda will be asking them in the days to come. Any issues at this point are to be handled by the original salesperson and management in order to correct any problems prior to the customer receiving a call from American Honda.

Concentrating on finding the right people for the job and setting up systems and processes for customer contacts has not been easy.  During one of my initial interviews at Hillside, I asked Shuster what the secret to success was at Hillside Honda. He looked around as if to make sure nobody was listening, leaned in toward me and said in almost a whisper, “The secret to success is good old fashion hard work.” Since joining the Hillside Honda team, I’ve worked harder and smarter than ever before, and I’ve had more fun and enjoyed success I’d only imagined in the past.

Our BDC department hasn’t quite met our goals yet, but we are steadily improving each month.  Currently, the dealership is averaging 355 units per month, and at 49 percent BDC penetration in November of 2006, we are close. It’s time to set our goals a bit higher.

Vol 4, Issue 1