A Tale of Two Dealerships

Recent visits to two dealerships we consult with reinforced something I have been advocating for years. Bear with me while I set up the story.

On the surface, the dealerships are very similar. They are each owned by very good people with high integrity and sound business principles. They do similar volume, with a similarly structured sales team, and both have a business development center (BDC). The first store has very strong fixed operations, the second … Well, let’s just say there is an opportunity there. Each store attracts a large number of leads, with high percentages of special finance customers. But both stores’ BDC teams were struggling to turn an appropriate number of leads into customers in the showroom, resulting in a poor closing percentage.

Expert Advice
I have personally trained and coached the personnel in both stores extensively, as have other members of my team. The problem was, when we weren’t there training, it just didn’t seem to happen. I referred both dealer principals to a third-party BDC expert who went onsite, full-time, to work alongside each store’s BDC manager for five to six weeks. This allowed them to help show the manager how to train and coach their team — and to help them bring their respective team members along.

With the expert assisting, the appointments-kept rate as a percentage of appointments made and as a percentage of valid leads received ballooned. With the benchmark being 60% of appointments set, suddenly both stores consistently reached or exceeded that level. Then came time for the expert to move on.

Shortly afterward, the first store failed miserably. The expert was never welcomed and not well supported by the sales management team, and it showed. That BDC reverted back to the same bad habits they had prior to the trainer’s arrival, and in doing so, their show-to-set rates plummeted back to slightly above 30%.

The second store did just the opposite. There, the trainer was embraced by the BDC and supported daily by a DP who had the drive to succeed. There, following the expert’s departure, their ongoing coaching of the BDC manager helped ensure the best practices put in place by the trainer were carried on.

What did this mean for customers in the door? The first dealer, in spite of a heavier ad spend, with just under 1,000 leads, barely brought 100 customers through their door — and had a horrible sales conversion rate. The second? Their sustained commitment and drive resulted in nearly 300 customers in the door, on basically the same number of leads, and substantially more vehicles delivered.

What is the takeaway here? First, for me, it has reinforced the fact that no matter what, one size doesn’t fit all. Here, two good dealers of similar means achieved totally different results. The managers at the first store are focused, to their great benefit, on fixed ops. They simply lack the ability — and, more importantly, confidence — to manage their BDC. As a result, they more or less accepted their BDC agents’ excuses, there was no consistency in execution and poor performance was the only result they could have accepted.

The second store’s DP came up through the sales ranks and, with a willingness to learn, grow, train and coach, had the confidence and desire to ensure their management team executed. Consistency and accountability ensured that BDC would continue to rock after the expert left.

Aptitude vs. Apathy
So what does this tale of two dealers mean? Is one inept and the other not? No, not at all. It does prove that a BDC alone is not the answer to converting leads into sales. Yes, they can process high volumes of leads, but that alone does not guarantee leads turn into appointments or those appointments will be kept.

It also proves that you cannot run a BDC — or, for that matter, have sales personnel man an extensive calling program — without a plan. First and foremost, you need someone who is capable of training, managing and coaching the BDC manager or the salespeople collectively on a daily basis.

Given their own devices, over even a short period of time, call centers and especially salespeople will deviate from even a very solid plan to something they think works better. It seldom, if ever, does.

Whether your leads and incoming calls are handled by a BDC or a team of sales personnel, they must be trained and coached consistently. Given the high volume of leads and their significant determination over the success and failure of the variable operations departments, you simply can’t afford to waste the opportunities. When one store can turn the same number (and same type) of leads into 200 more dealership visits than another, you can only imagine the positive (and negative) impact that the BDCs had on their respective stores.

So where does this comparison leave us? First, a BDC is not appropriate for every store. The first store, with our help, eliminated their BDC. We then trained their sales staff to handle the inbound and outbound leads.

Are they as effective as the second store’s BDC? No! Not even close, in fact. But they have been more effective than their dysfunctional BDC ever was, and the store has eliminated a significant expense. Plan A was to train and maintain their BDC, but with no one on staff capable of making it happen, going without is the better course for now.

Motivation Nation
This comparison also reinforces the importance of nurturing and supporting the BDC manager and their team. Processing upwards of 100 dials and calls per day can be a mind-numbing job. A dealer or general manager would have to work a shift in their BDC to truly appreciate that team’s challenges. It is so easy for even a skilled, well-intending agent to make unwitting, incremental changes to their call guide over the course of the day. By day’s end, what they are saying and what they are supposed to be saying are miles apart. This is where the importance of individual coaching comes into play, and without it, the results can be disastrous.

If you are working a significant amount of leads each month, regardless of where they come from, don’t settle for subpar results. One of our clients had more than 2,000 leads last month and, with a world-class BDC firing on all cylinders, was able to get more than 45% into the showroom. If you aren’t achieving a minimum of 25% of your valid leads turning into showroom visits, it is time to spend more time on your calling process — however it is being handled — and less money on subsidizing your store by spending more money on advertising.

For those of you that want more help, I highly suggest you attend this year’s Industry Summit, which will be held September 8–10 at Paris Las Vegas. You will hear BDC development experts as well as some of the top BDC managers in the country discuss ways to build and train a highly productive team. The investment will be a drop in the bucket compared to what you will spend in advertising to compensate for an ill-performing department. I hope to see you there.

Until next month, whether in Vegas or in print, great selling!

Greg Goebel is the CEO of DealerStrong and the industry’s leading special finance trainer since 1989. He is an 18-year former dealer principal and a highly sought-after speaker, author and consultant. [email protected]