Anonymous Interviews in Automotive Retail
In this installment of our Under the Hood series of anonymous interviews with the people who make the retail automotive machine work, we talk to a proven sales leader. He is really disappointed in where the industry has gone and how little margin there is to be able to deliver real value for the customer. He has had a mix of experience across imports and luxury vehicles and consistently been a top performer. His customers love him. Interested in knowing his thoughts on the BDC department and what role it should really play? Read on.
Editor’s note: We did this interview prior to the coronavirus outbreak, so we checked back in to see if there were any changes to this story. If anything it only made his point of view captured here stronger. His customers were still coming in, because of the relationship. Those BDC customers weren’t.
One of my core beliefs is that the BDC department should only be involved in a sale when a salesperson is not available. However, there are now tasks associated with the BDC function that can easily be performed by a sales rep. The whole system is broken. It is so different and it’s much worse.
Back in the day, someone would call in and the receptionist might set an appointment or just take a message if he or she couldn’t transfer the call directly to the sales person. The salesperson would take it from there. We would set up a time to talk with the customer and coordinate a test drive. We delivered a ton of value. Some of my clients might be interested in a hard-to-get vehicle or I could see something that I know they would be interested in buying and reach out to them proactively. There was an ability to deliver value. The customer was happy, we were happy and there was still some margin in the system for the dealership.
Now they talk to a BDC rep, that rep sets an appointment for the salesperson to talk to the customer and coordinate a test drive, but it doesn’t stop there. The other thing they’re doing is following up with all the customers who come in who haven’t made a purchase. Customers go to the BDC and then the BDC starts calling them. Essentially, BDC reps have become a training wheels for the sales department.
Then, once the customer comes in and does the test drive the interested customer is introduced to a manager to figure out the deal, at which point they need to give the car away because no one has actually added any value. Then they go to the finance department to finalize the sale and get handed to a product specialist, who’s not a salesperson, to go over the car. Nobody is responsible for that buyer’s experience as a whole. Instead, everyone is responsible for their own task which provides little to no real connection for the buyer throughout the process. They spent very little time with a professional salesperson.
Today, our BDC department uses a CRM app. When a customer puts in a lead there are 27 tasks assigned over the course of the next 20 days for the BDC and/or sales to call, text, email and stay on top of the customer’s actual needs to ensure they don’t fall through the cracks. That’s the only thing that matters to them. Your best possible performance on that system is not failing without adding value. All of the systems are basically set up to do that, to take information from one group of people and communicate it as completely as possible to some individual group in the future. It’s the “assembly line of sales” theory, whereby the initiative associated with creating a relationship with a client is replaced by a collection of well-intentioned, yet replaceable, task performers.
The first rule of management: “Tell me how you’re gonna pay people and I’ll tell you how they’re going to behave.”
A BDC rep does their best to hold on to potential buyers because when they come in for a visit that rep gets paid. When a customer buys a car they get paid. The first rule of management: “Tell me how you’re gonna pay people and I’ll tell you how they’re going to behave.” So basically what they get paid to do is take ownership of the customer. Ultimately they’re responsible for the customer’s satisfaction, which they’re incapable of providing based on the fact that they sit in a cubicle farm in another building and never see the product and never see the customer. Ownership of the customer is not their job. So, we don’t need to give them more tools to encourage them to grab the customer over the sales people who make things happen. That being said, anything that could be done to help sales people is great.
Ideally you have one person forming the relationship with customers instead of multiple. That should be the salespeople. Salespeople are more able to add valuable so give them the access to the customer as early as possible. In general, they have more training and are going to be more skilled at answering questions. Usually BDC hasn’t been given the training to be able to become an asset to the customer.
To put it this way, the salesperson is the king of the roost and the system with BDC coming in essentially messed that up. Administrative support is ok if a salesperson is not available, that’s fine. This may be controversial to actually say, but a lot of people feel this way. They just don’t want to articulate it.
Today with the transparency in the market you’re not able to price cars as far above market. Margins continue to shrink. Many of us would like to return to the old world where you could make a lot of margin on every car when people didn’t know what the car was retailing for and you weren’t competing against other dealerships. You used to bring value to the customer by bringing them exactly the car they want instead of exactly the price they want. Today’s marketplace is so price-oriented instead of value-oriented. Transparency isn’t going away. And a BDC team could help, but only as a backup, when the sales team is at full capacity.
“Car dealers end up with less than $0.03 on every dollar they make as profit, which is less profit than furniture stores, office supply stores, restaurantsâ€” lower than pretty much everything but grocery stores. When car dealers say that they are not making a killing, on average, it’s true.” â€”Ira Glass, This American Life