Best PracticesDealership Operations & Processes

Old Horses for New Horses and Killing the BDC

When asked today “what is your biggest challenge?”, the vast majority of Dealers will say…“finding qualified sales associates!

Unfortunately, most Dealers don’t have a clear idea on how to find the right sales candidate for today’s marketplace. Compounding the problem is that they employ an old school compensation plan.

The majority of Dealers are still looking for people who are like their “old horses”  – high volume sales people who’ve been with the store for a number of years and don’t feel comfortable trying to adjust to a new type of customer.

Yesterday’s skill sets created their outstanding success. They were highly persuasive – bordering on confrontational. Dealers rode these “old horses” to outstanding financial success.

But times have changed. There is more to sales now than the still-valuable skills to confidently approach strangers and make yourself immediately welcomed. Those “hearty handshakes” will always be appreciated, as is the ability to look strangers directly in their eyes. But …, virtually every new customer is an “internet customer.” They spend anywhere from 10-15 hours online. That’s right, they make much of their decisions without ever encountering that friendly handshake and persuasive sales pitch.

That means that the era of your sales staff meeting and greeting a “fresh up” is a rarer occurrence.  The vast majority of potential customers visit your website before coming to your store. If it is welcoming and information rich (including posting vehicle prices!) it is likely that they will contact your store via an online form lead, a phone call, OR just SHOW UP.

If you have seen this trend yourself, then you know you need to hire salespeople with skill sets that work in this new environment. You need some “new horses.”

Spoiler Alert: Here’s where I’m going to surprise many of you reading this article.

It’s time to eliminate the BDC Sales department.

BDCs were established for a very good reason. The “old horses” didn’t have the skill sets to handle incoming phone calls – and certainly not internet leads. They were hired to handle “walk-ins”. So it made perfect sense to establish sales BDCs to complement the “old horses” skill sets and become “appointment setters” for them.

But since almost everyone is now an “internet customer”, we need to change our hiring criteria and eliminate the BDC layer of expense. Killing off the BDC or transferring an individual BDC into the new sales arena, is especially important in an era of continuing margin compression where Dealers should be doing everything possible to lower transaction expenses.

The hiring profile for the “new horses” include:

  • Likes to make sales
  • Excellent phone skills
  • Very good grammar/typing skills
  • Loves product knowledge
  • Outstanding organizational skills

The goal of the incoming lead also has changed. The “old school” BDC-driven goal was to “set an appointment,” pretty much at all costs.

The vast majority of prospects who contact your dealership, are calling for information, not to “set an appointment”. Their goal is to gather somewhat granular information that will aid them in their buying decision.

So the new goal in this Digital Sales strategy is to get the potential prospect to “want to meet me”. This is very different than trying to get an appointment. This is about creating trust and confidence by being transparent and knowing a tremendous amount about the product – which can only happen if the salesperson possesses outstanding product knowledge. The more trust and confidence the Digital Salesperson can establish, the more customers will want to set an appointment.

This is a sales model that allows your sales staff to achieve high levels of empowerment. This may “fly in the face” old-school sales manages but it will attract a better educated more diverse sales team.

In this model it is also very IMPORTANT to note that you are now running two different sales groups:  A smaller staff that “meets and greets” showroom floor “walk-ins” and your Digital Sales force that handles in-coming calls and internet leads. So this new group never works the showroom floor hoping to get a customer – but is a dedicated team that works only by appointment.

How do I compensate my new team of Digital Sales agents?

Let’s  assume this is a younger staff comprised mostly of Generation Y. Gen Y is not a cohort that is turned on by a “straight commission” job opportunity. For the most part, when you’re looking for younger people to staff your sales force they will want more financial guarantees and a flexible work schedule. If you don’t want to meet those qualifications you’re going to continue to ride your “old horses” until they retire…then what will you be left with?

Your compensation for Gen Y should revolve around these principles:

  • A training salary, typically at least $2,500 for three months
  • Then a blend of salary and a flat fee per unit sold with volume bonuses
  • Some compensation for F/I related sales including securing the financing and a small “spiff” for menu items; we want to incentivize this group to be completely supportive of the F/I department
  • A flat fee for 5 star reviews from online sites

Are you prepared to hire Generation Y and eliminate your BDC?

A former Chevrolet dealer, Mark began with an early focus on performance improvement and implementation of leading edge dealership practices. He found...