It's a hectic few hours in the showroom, with customers matched to every available sales associate. The phone-ups keep streaming in too, often unanswered by the busy sales staff or, when they are answered, the opportunity is rushed, fumbled and often lost.
How do you quantify the business lost when phone-ups are handled poorly, if at all? How much traffic walked in and out of the showroom unassisted? Who captured the names and contact information for those missed opportunities and who really believes they're worth the time to follow up?
Thus, the dilemma facing most dealership management across the nation: how to effectively measure floor traffic, increase sales from phone-ups, be-backs and customer/prospect databases and without additional cost.
Some retail development experts believe the right answer can not only lower the average PVR — per vehicle retail — but also sell more cars.
The expanding school of thought believes the best answer is to centralize the handling of traffic control, phone-ups and follow-up, and staff the department with experienced customer service “telemarketers.”
Not quite, says Sandi Jerome, president of CRS, a customer-retention software developer and dealership systems training specialist, based in Port Angeles, WA.
“I'll take flak for this”
Jerome agrees that a centralized business development center (BDC) can help put process to otherwise fragmented sales activities. She also believes that transferring phone-up responsibility from the showroom floor to the BDC is a case of taking money from the right pocket and putting it in the left.
“These BDCs are really business diversion centers,” she says. “They are taking business that is already there — the phone-ups — and moving them from one department to another. Their supporters feel that the highly trained people manning the centers can move these ups to appointments better than the floor sales associates can,” she says.
Jerome believes dealers too often adopt the BDC concept as a quick fix to slow sales and in response to their perception that the sales staff isn't doing a good enough job closing phone-ups and handling follow-ups. “With the claims that the BDC will increase business up to 50%, of course you are going to jump at it,” she says.
She adds, “I know I am going to get a lot of flak for this, but dealers need to focus not on the quick fix of a business diversion but on a long-term plan of customer retention and database mining.
“The number one change these centers make is they divert the sales calls. How does the dealer really know these centers are increasing sales opportunities unless he's taken the time beforehand to accurately track phone-ups for at least two weeks and then compare.”
Counting does matter
Michael Overy would probably agree that a traffic study is a good idea for any management that wants a better handle on true traffic volume. The outcome can be eye opening, says Overy, vice president of Stuker and Associates, auto retail trainers based in Hoffman Estates, Ill.
He recently had one client hire and place part-time spotters in his three showrooms to track traffic and log it over a month. The spotters' figures were then compared to the dealer's own traffic “records”. “The spotter's activity showed a 29%, 41% and 36% difference in those three tested stores, opportunities the dealer didn't know existed,” Overy says.
His firm used this information to demonstrate to the dealer how control of showroom traffic — from monitoring and tracking volume to calling back walk-ins and other opportunities — can deliver more profit to dealers' pockets.
Stuker and Associates helps dealers set up BDCs (the firm prefers to call them customer development centers) because they provide the information control and quantification dealers otherwise miss.
An opportunity safety net
The BDC's popularity, Overy says, is rooted in the facts of the trade — sales people are often not trained to give a consistent marketing message when handling incoming calls and often avoid taking them all together, and too seldom see value in following up with prospects who left the dealership unsold.
A better approach, he says, is to staff the BDC with dedicated people who have good problem-solving and communication skills. This staff should work from a message-specific phone script so prospects and customers get a more consistent marketing message about a dealership and why they should buy from it.
“We have found that certain people work better on the telephone, and incoming calls should go to them. The leads should then be turned over to the best sales person suited for that customer,” Overy says. “The customer development center allows the dealership team to have a safety net around their opportunities.”
The process also creates an elite group of sales people who value this team approach to selling more vehicles, he says.
“Within 90 days of setting up a BDC, 50% of the sales people will respond more favorably than others and if you want to sell more cars you'll match these elite sales people with your elite phone people,” Overy notes.
The BDC can be largely self-funding, he says, with little impact to the financial statement. His firm's model suggests sales associates contribute $50 from every sale resulting from a BDC phone-up to supporting the center. Increased sales from better traffic control and presentations can mean some advertising money can be redirected to center support as well.
Overy says a BDC can be as simple two people with phones and customer records working out of an unused area of the dealership. “The BDC concept can take that unused space and turn it into the most profitable square footage in the dealership,” he says.
Diluting jet fuel to regular gasoline
John Traver, president of Traver Technologies in Houston, works with dealerships nationwide to implement BDCs. Using telemarketers to handle phone-ups and follow-ups is sometimes the right answer for certain dealers, he prefers that they train their existing sales people to handle the job.
He agrees they'll get better results if the work is done in a physical place separate from the distractions of the showroom and where they follow a well-developed customer retention plan.
The sales people are already on the payroll, he points out, and removing them from the sales process is contrary to the dealership's best interest.
“A salesman will close 35% of his shows when he sets the appointments and confirms them himself,” Traver says. “That rate drops to about 20% when a telemarketer makes the call and flips it to a sales person. You've just diluted jet fuel to regular gasoline.”
Skimming the cream?
Data mining for lost opportunities and customer retention is, Jerome says, what all dealerships should be doing. Yet she believes some of the sales gains claimed by BDC proponents can be made simply by better sales training and supervision.
“These business development centers take the cream off the crop and it's not net new business, just diverted business,” she says. “When dealers are presented with this option, they need to think, ‘Who am I hurting here?’ Are they hurting their sales department and the sales people who handle ups and follow up well? They should carefully consider whether they really need this.”
Says Traver, “The business development center is not who needs the rapport with the customer.”
Overy says BDCs generate the opportunities dealers want — and make better use of the opportunities it has.
“The customer development center squeezes that orange and gets more juice out of it,” he says.”
Jim Leman writes about automotive retailing from Grayslake, IL. He publishes a technical newsletter for owners of 1946 to early 1949 Plymouths. He can be reached at [email protected].