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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:

• 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?

• 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:

1. Walk-Ins

2. Be-Backs

3. Phone-Ups

4. Internet

5. Referrals

6. Prior Customers

7. Service

8. 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:

• Five coordinators X 120 calls per day = 600 calls per day

• 600 calls per day X five working days = 3,000 calls per week

• 3,000 calls per week X 4.3 weeks in a month = 12,900 calls

• 12,900 calls X 12 percent connection ratio = 1,548 connections with prospects

• 1,548 connections X 25 percent appointment made ratio = 387 appointments

• 387 appointments X 60 percent appointment show ratio = 232 appointment shows

• 232 appointment shows X 42 percent close ratio = 97 units delivered.

• 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:

• Unsold showroom traffic

• Service

• CSI

• Data Mining

• Credit

• Getting lunch, coffee, etc.

• Taking pictures

• 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.