Article

To BDC Or Not To BDC? Improving Response Times

September 2006, Auto Dealer Today - WebXclusive

by Harlene Doane - Also by this author

There are three customers who want your attention. One is on the lot, one is on the phone and the other one just e-mailed. Who is the most important? Not a tough question for most dealers. The customer on the lot is the most likely to buy at that moment, however no sales person, or dealer for that matter, wants to give up the phone or the e-mail customer in lieu of the lot customer. Instead they want to serve them all. So what is the key to minimizing lost opportunities caused by not properly handling the phone and e-mail customer while working with the customer on the lot?

Let’s back up and review the evolution of Internet retailing? Just a few short years ago many dealers thought that if a customer e-mailed the dealership that all communication should be via e-mail until the customer was ready to purchase. Since then, most successful internet departments have realized that it is extremely important to speak with each customer as quickly as possible. The ability of a dealer to do this has a significant impact on their ability to advance the customer through the buying cycle. When the customer is contacted by phone the single most important goal of the conversation should be setting the appointment. If you have spoken with the customer and set an appointment the customer is far less likely to continue shopping, especially with your competition.

Are dealers doing a good job of responding? In a recent study sponsored by The Cobalt Group and its Dealix division, conducted in conjunction with R.L. Polk & Co, which examined 1.1 million 3rd party Internet leads over 15 months, it was found that dealers over the last year have improved their average response time to Internet leads. Before dealers thrust out their chest in pride and pat themselves on the back, it should be noted that the average dealer response time to Internet leads is still a dismal 6.5 hours. Honestly, who, among technologically savvy individuals living in the U.S. that wants to purchase a vehicle, waits 6.5 hours for a response? We live in a world of instant information. In 6.5 hours a buyer can drive to a competitor’s lot, purchase their new vehicle and be back home celebrating their success in finding the perfect vehicle.

View the BDC Comparison Chart. The lead closing ratios were calculated based on data supplied by all applicants for the Internet Achievement Awards.

What is the solution? Dealers must focus squarely on response times. Response times will significantly impact the time frame that it takes to move the customer from the emailed internet lead stage to the showroom buying stage. If response times are the solution what practices, processes or tools will assist a dealer in their pursuit of it?

First, dealers must realize that there is no single solution. Although the goal of every dealership is to reach the customer by phone and get them to the showroom, there are several ways to accomplish it based on the volume of leads and the structure of the dealership.

Dealerships with large volumes of leads have set up full Business Development Centers (BDC) or Customer Development Centers (CDC). Some mid sized dealers have an Internet Manager who oversees and distributes leads to the sales staff either dedicated Internet or traditional floor sales staff. The smallest departments typically have an Internet Manager who is responsible for all incoming Internet leads including the sale. Therefore, the goal is to figure out which format will best serve the dealership’s needs in achieving the ultimate goal of reaching the customer quickly, setting an appointment and getting them to the showroom.

First, let’s focus on dealerships with high lead volumes that have implemented a BDC or CDC. The Ira Motor Group has had a CDC in some format back as far as 1997. In 2004, they cranked it up considerably and integrated the departments to handle all phone calls and internet inquiries for all Ira Motor Group Stores. Their CDC has an average response time of less than one hour. The results of their efforts - in 2005, the BDC/CDC department of Ira Motor Group accounted for 30 percent of all Ira Motor Group sales. That’s significant enough to get the attention of almost any dealer.

“The value of having a call or e-mail answered immediately rather than going to voicemail or worse, go unattended, is huge,” states Nancy Buell, Internet CDC manager for Ira Motor Group. This group offers no incentives to the customer to entice them to come to the dealership, instead focusing on firm appointment setting, followed up by confirmations made by the individual stores management teams.

With an average response time of just 19 minutes, Prestige Ford takes a slightly different approach with their 9 year old BDC department; they make use of incentives like a tank of gas or other current giveaway promotions to entice their customers to keep their appointments. Bobby Malatia, Internet director for Prestige, believes that the BDC Department is critical to the success of their dealership. His advice to anyone considering it is “A true BDC/Call Center needs to have ongoing training and the correct supervision to maintain its proper role inside the dealership structure. I would encourage any dealer to invest in the implementation of a BDC to further their success.”

Ralph Paglia, CRM e-business director of Courtesy Chevrolet has been overseeing a complex system of two BDC teams and a staff of Internet Sales Specialist (ISS). The Internet team handles initial Internet inquiries and leads and averages a response time of less than 35 minutes on new leads. “Our BDC teams are back up for the ISS teams who execute outbound customer contact via phone when an ISS has responded by e-mail but has been unable to contact the customer by phone,” states Paglia. Courtesy’s complex system seems to work for them; they attribute between 270 and 375 incremental sales to these departments each month.

What about the dealership that can’t justify a staff of 20, ten or even five to a dedicated BDC department? Can they make some changes to reduce response times and ultimately increase their ability to sell more vehicles? Are there products or services to help them?

One service that is an outsourcing solution for dealers who want the benefits of a BDC but don’t want the headaches of staffing and managing one is WorldDealer (www.worlddealer.net). “Many dealers in metro areas with stiff competition for employees experience high turnover rates and look to outsourcing as a solution,” said Paul Accinno, president of WorldDealer.

Dealerships that have 300-400 leads per month per rooftop typically do well with outsourcing their BDC needs. All leads are directed to the outsourcing call center that makes the appointment with the customer. The dealer can dictate how much information is given to the customer, for example if the dealership wants to quote prices from the BDC or not. The cost of this service is very much like a traditional BDC set up in the dealership. In a traditional BDC an employee is paid a base hourly wage or salary plus a bonus per appointment that shows and an additional bonus for each delivery. Outsourcing is similar with usually a small monthly fee, plus a fee for appointments that show and a fee for all deliveries made. The difference is that in a dealership, the base pay generally is the bulk of their income where as when you outsource the bulk of the money earned by the provider is based on their performance. This difference can actually reduce the cost for many dealers with substantially better results.

For the dealer who doesn’t want to outsource and has a staff of great sales professionals who know how to work the phone there is another solution. It is a new service that launched at NADA this year called CallProspector, offered by Dealeron, located in Rockville, MD. This product takes any Internet lead from any lead provider and converts it to a phone call into the dealership. It sounds way too simple to be a viable option for increasing sales. However upon testing it, you will sing a different tune.

Here’s what happens –all leads work the same way, a customer completes an inquiry from any Web site managed by a lead provider, then the lead moves from the lead provider to you. It is what happens at this point that is so very different with CallProspector. The lead still arrives in your inbox, but it is also instantly converted to a voice lead and CallProspector calls your dealership. The phone is answered at the dealership and it says, “You have a new lead from ABC lead provider, it is John Doe, at 123 Main Street in Anytown, MD, his phone number is 888-888-8888 would you like to speak with him now? If so, push 1 to be connected.” Once you select one, it immediately dials the customer. This all happens within seconds. The customer is totally caught off guard that you have responded instantly to his request. You have the opportunity to set your appointment within minutes of his initial inquiry and you have probably impressed him enough that he stops shopping until his appointment with you.

Jeff Kershner, Internet sales and marketing director for Mercedes Benz of Hagerstown, MD has found Call Prospector to be a nice asset for their small dealership. “We aren’t big enough for a dedicated Internet sales staff so it works well for us.” When asked just how fast the process works Kershner had this to say, “When a lead arrives by e-mail, I can pick up the phone to dial and the phone will be ringing in with the new lead, it’s typically that fast.”

Kershner says it’s not a perfect system. Since the lead is converted to a voice translation, it can sometimes be difficult to understand the name. However, it isn’t any different than a customer who calls directly to the dealership and has a thick accent; you just listen closely. The system can be configured to direct calls in the way you want. For example, on Kershner’s day off, the leads are directed to another sales professional specifically trained to handle these leads. All in all, it is a good solution for the smaller dealership that can’t staff a BDC but wants to decrease the amount of time it takes to respond to an Internet lead or inquiry.

There you have it, what some of the largest and smallest volume dealers are doing today to improve response times to Internet leads while increasing sales opportunities. With this many options available, one of which should fit every dealership, and there is no excuse to be the average dealership.

Vol 3, Issue 5

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