BEWARE of YOUR Internet Or
Business Development Department Infrastructure
For more than nine years, I have traveled the country conducting consulting and training for approximately 500 dealerships, and before that I worked on the front lines for five and half years. I have tracked trends, patterns, common situations that effect dealership’s success, and what is crystal clear is that region, franchise or demographics don’t matter. I want to share some revelations I have identified that will help you sell more cars, more often and more profitably.
Dealerships are not staffing their Internet or business development department the right way. I see the same thing over and over at dealership after dealership. For example, dealers will have 500 leads in their CRM and have one or two appointment setters working those leads — or worse, they have no appointment setters. They just rely on showroom consultants to handle all of those leads.
Let me just dive into my concerns in this scenario, beginning with having too few appointment setters. This doesn’t work because there are far too many leads to be handled for only one to two appointment setters. Understand that you only have an 11 to 14 percent connection ratio from phone call attempts. I train clients to make 120 calls per day, no exceptions. However, we find that the average dealership’s appointment setters are making only 50 to 75 calls per day.
Let me break this data down for you:
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On average, 50 call attempts will only convert to five to seven conversations. Does that sound productive for an eight-hour day? Of course not. With two appointment setters each making 50 calls, they will have 10 to 14 conversations for the entire day. Remember that is only 10 to 14 conversations out of 500 leads. Leads mean opportunities to do business. These prospects are in the market but we do not engage them?
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Even if your people were making 75 calls each. One rep’s connections would be seven to 10 conversations and two rep’s connections would be 14 to 20 connections. That’s still inadequate compared to the lead volume.
Now, let’s discuss the scenario of having no appointment setters and just utilizing your showroom sales consultants. The average dealership has approximately 10 sales consultants, and they have lots of responsibilities as well as ways for them to sell an automobile. Let’s look at the eight different ways a showroom sales consultant can sell an automobile:
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Walk-Ins
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Be-Backs
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Phone-Ups
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Internet
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Referrals
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Prior Customers
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Service
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Prospecting
Lets be honest: I believe the vast majority of automotive sales consultants do not engage the full eight ways to sell an automobile and even if they do, the majority do not do it consistently. But, let’s pretend for a second that they do. How can the average sales consultant handle their full sales responsibilities plus handle the 50, 75 or 100 fresh Internet leads they receive per month? If an appointment setter — who does not have to do a product presentation, demo drive or a delivery — only makes 50 to 75 calls per day and converts only five to seven conversations per day, how many phone call attempts do you really think your sales people are making?
Exactly.
Let’s add another crazy, but important, variable called the residual flow factor. That means the “carry over leads.” Remember that the average Internet prospect is approximately 45 to 90 days. So, if you receive 400 leads in the month of June and you sell 40 units, it doesn’t end there. Just because you close your month doesn’t mean that all of those 370 other leads that didn’t buy are garbage. On the contrary, those are actual working (“cooking”) opportunities. So, let’s say that out of the 370 remaining leads, 200 are still active and viable opportunities. You will start July 1 with 200 “carry over” leads, plus you will receive an additional 400 “fresh” leads for a total working lead opportunity of 600 leads. This is known as your residual flow factor.
Now, let me give you the “secret formula” to success. I have numerous nationally recognized client success stories. Clients using this formula have graced the cover of every major automotive magazine, including AutoSuccess (The most recent would be Alan Vines Automotive, in the September 2012 issue).
Alan Vines Automotive has five appointment setters:
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Five coordinators X 120 calls per day = 600 calls per day
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600 calls per day X five working days = 3,000 calls per week
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3,000 calls per week X 4.3 weeks in a month = 12,900 calls
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12,900 calls X 12 percent connection ratio = 1,548 connections with prospects
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1,548 connections X 25 percent appointment made ratio = 387 appointments
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387 appointments X 60 percent appointment show ratio = 232 appointment shows
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232 appointment shows X 42 percent close ratio = 97 units delivered.
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97 units delivered (as documented in the cover story)
Alan Vines Automotive receives 600 to 700 fresh leads per month and has a residual flow factor of 800 to 900 working leads.
My final point is that your Internet sales appointment setters should not be doing anything other than dealing with fresh and carry over Internet sales leads. The only exception is if you have them take incoming phone-ups. That is perfectly in alignment with the system. Do not, however, have them working on:
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Unsold showroom traffic
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Service
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CSI
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Data Mining
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Credit
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Getting lunch, coffee, etc.
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Taking pictures
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Greeting
If you think your one or two appointment setters (if you even have them) can work 300 to 500 fresh Internet leads plus do any or all of these things, you are wrong. If your dealership has these efforts tasked to the Internet appointment setter, I suggest that you delegate to someone else, hire BDC appointment setters or accept mediocrity.
If you have any questions or comment about this article, or if you would like me to personally review your Internet or BDC infrastructure with you, please feel free to e-mail or call me.
Sean V. Bradley is the founder and CEO of Dealer Synergy, a nationally recognized training and consulting company in the automotive industry. He can be contacted at 866.648.7400, or by e-mail at sbradley@autosuccessonline.com.
Comments
Thanks for the response Dani,
We do have some templates that I do use, but then I also get people who want specific information, which I generally have to go to another sales person in regards to, either to whom the lead is assigned to or to someone who knows more about the car or truck. but you're right about the spam issue which is a thought that had never occurred to me or that the customer could just not be opening any of my emails and just deleting them off as well. A cell phone # is actually more handy than an email in my mind, text messages are more looked at then a email and so I've been realizing the value of txt messaging things to potential customers as well such as vehicle listings etc.
My manager wants us to at least dial 10 numbers an hour, which in an 8 hour day is 80 calls, which is do-able, but in my telemarketing experience, I could probably do double that once I get more proficient in things. I've only been working in the BDC department for about a month and a half.
Hi Rebekah --
Create templates for yourself for those "internet address only" leads you have to work. Having to type a fresh email can be a time suck, but if you can just click on a pre-made template, you can move on to the next prospect in less than a minute. Also, do not be afraid to make 3-4 unique templates and then just rotate them. If you are not getting an answer from those leads, it's either because 1) Your email is going to a Spam filter (so it almost doesn't matter what you send, they will never see it) or 2) They are not ready to buy or visit, so they delete, or will not answer or 3)If your system has not marked it as a bad email address, it may be a bad email address anyway. With any of the 3 scenarios, you are wasting your time until you have a viable return answer from the prospect, so do not be afraid to rotate a template and move on to your next prospect.
Thanks for the good article. I've actually started working BDC and I am fairly new to the automotive industry in general but not to phone calling. I am use to calling eight hours a day, I find it hard to make 80 calls let alone 120 calls. But I push hard and sometimes get at least 90 calls in. It's not always easy to get that many because I push not just on phone side but dabble in the internet leads. The internet leads are a time gobbler in my mind because a lot of them have email only and no phones to dial, but I am only suppose to work on them if the internet team isn't in or at their desks or the main internet salesman on each team isn't available to get to them in a reasonable amount of time.
My dealership expects us to make 80 phone calls a day and make 8 appointments a day. I am still new so, getting to that number is a bit of a struggle. Some days I get four, others, eight, some five and others six. Also depends on the day of the week, and whether or not it's a holiday. I am getting better at becoming more knowledgeable about product and what's available in incentives and rebates plus what's in the used car inventory. But I do have knowledge gap issues because like I said I know about an inch worth on cars and know lots about phone calling. However, thanks for giving me something to aim toward and the benefits of at least getting 120 calls a day.
Alyssa -- Your best bet would be to review Telemarketing job descriptions and use those as a guide for your own help wanted ads. You want a pleasant phone demeanor, teachable, and of course, people who are comfortable to have their ear to a phone for 8 hours a day.
If you do not think that this formula works I highly recommend that you carefully review this article again, again, and again until you fully understand it. Sean has been using this plan for years and it’s been proven to work. You can't expect one or two coordinators to handle so many leads. Even if you're trying to save money by having fewer staff you end up losing more money by not pursuing as many leads as you should be. The amount of coordinators you have all depends on the number of leads you are receiving, the type of dealership, and the size of the dealership. As Sean mentioned in the article that five coordinators fit perfectly when you have 600-700 leads in a dealership like Alan Vines Automotive. Once you figure that out you can decide how many coordinators you will need. Now you just have to hire the correct people. I believe that this position does need at least some customer service skills. Yes they need to have previous phone experience so that they can learn the script but, you don't want your coordinators to sound lifeless. You want them to be upbeat. Customers recognize how your coordinators sound on the phone and it does factor in to their decision on if they want to come visit your dealership or not. That is where the customer service experience comes into play. Once you have your team of coordinators you can start the process of making a minimum of 120 calls per day. You will notice a dramatic change in your numbers and you will be extremely happy that Sean wrote this article for you to read and learn from.
I understand what needs to be done, and I completely agree, but can someone help me figure out how to hire the right people? I can not find anyone who is willing to do this properly. I have had a few quit and some not work out, but I do not have a flow of people to choose from. If anyone has a great job description I can post on what I am looking for that finds the right people, let me know.
It is evident that the managing role of this department must understand the workings of all dealership departments, so that proper guidelines and roles are clearly laid out. If you can find an experienced manager for the "Internet Department" that has not only sold on the floor, been in F&I, desked deals, handled customer follow up, understands parts and service, is tech savvy, and is also knowledgeable enough about cars so that a reasonable coherent conversation can be had on the phone or via email....you found your perfect leader. However, most dealerships do not see the importance of this role to seek out and of course compensate the position adequately. If there is a position in the dealership that needs all this experience, the ISM is it,..let alone manage the staff to attain the call numbers put forth. The unfortunate truth is that we are all asked to help with other roles, so that we spend valuable time on the data mining, un sold, etc,. The balance of all of these tasks is most challenging in the smaller to mid size stores. And that is where most of us in the northeast tend to be located. The volume of calls can be daunting, and high turn over of staff is inevitable.
Speaking as someone who understands Sean's presentation and has been brought in as "the phone person", instead of the person charged and allowed the responsibility to hire and develop such a department, the dealership needs to make the investment in hiring a department director to get the ball rolling (who understands the issues Sean has presented). Next, that person needs to ensure all of the incoming internet leads are streamlined into one location. I've walked into dealerships with 10 internet representatives and leads from different sources going to different email addresses or even phone pops to certain reps cell phones. This issue needs to be resolved BEFORE hiring your telephone room staff! Next, look to hire, specifically, telemarketers. This is a telemarketing role. It is NOT a customer service role. It is NOT a sales role. It is NOT a babysitting role to the internet department, if there is an internet department in place. This is a 100% complete "smile and dial" role, and any job advertisements need to reflect this reality. Because what happens when you look for people who are great at customer service, and maybe know a thing or two about cars, is that they get bored in a week and move on. So far, dealership management may understand this, but they don't look to hire the right staff. You want people who can read a script and handle a phone call. No more, no less. If the customers become "difficult", then they can be passed on to a more knowledgable sales person, but as an appointment setter, "Thank you for your internet request, we have a great selection of vehicles, will today be good for you to visit, or is tomorrow better?". By the way, having simplified this post, I am always open to discuss, and currently in the market for an Internet/Business Development Director Role, or other similar roles as a dealership vendor. Please do not hesitate to say Hello.
Sean, this is a very good plan of action and works 100% of the time when it's set up the right way from top to bottom.
The questions dealers ask is where to start? Most dealers don't have the proper phone lines , the staff and the space to even start.
They love the idea and know it's needed, but when they start to write it on paper it becomes to much for them.
What would be the best way to get a dealer to start implementing some plan of action?