Set More Appointments

You feel your special finance department has a need to improve phone efficiency. Should you choose a call center? How about a business development center (BDC)? Is there really a difference, and do you need either? If so, figuring out which one to use for your special finance department could be one of this year’s most important decisions. Before you can begin to make a decision, you need to know how each one actually works.

The goal of both centers is to set appointments that show and ultimately sell, but they approach it differently. A call center focuses on working the telephone to set appointments by making outbound calls to leads received by the dealership and/or receiving inbound calls from customers responding to dealership advertising messages. A business development center does the same, but BDCs also mine the dealership customer database to create additional, incremental business including making follow-up calls to both sales and service customers.

Anyone who has worked in special finance long understands that it is a numbers game. If you have the proper inventory, people and processes in place, more traffic should translate to more sales. The problem becomes how to drive the desired traffic. The solution: increase advertising. However, before you pull that trigger, your dealership must be able to handle the volume of leads it generates.

Can your sales staff properly handle the influx of calls? How many new leads each month is your sales staff already receiving? Can they handle all leads timely and efficiently? Your sales team was hired for one reason: to sell cars, not talk on the phone. Do you really want them spending the bulk of their time on the phone setting appointments instead of selling cars? They might have to make three, six or even 10 calls to a single customer to get a firm appointment; do they really have that much time available?

The solution might be as simple as outsourcing those duties.

The Long Road to an Outsource Decision
About four years ago, Steve Luzzi, dealer principal of Luzzi Mitsubishi Suzuki, tried to implement a BDC in his Lake Havasu, Ariz., dealership. His store, which does about 70 percent SF business, was already large enough to house a BDC, saving him the trouble and cost of creating the space.

Luzzi dedicated more than a year to trying to make his BDC successful, but it never got to the point of mining the dealership’s database, so he settled for a call center. Ultimately, he poured money and resources into a department that never met his expectations. He estimated he wasted $25,000 in start-up costs for the center and an additional $10,000 to $15,000 each month it was in operation.

Fourteen months later, the department was still floundering and personnel turnover was a significant problem. During this timeframe, Luzzi employed three different managers and just as many call teams. He cited a lack of buy-in from some of his employees: “If you don’t have everybody on the same team, it’s going to be a struggle.”

Fortunately, Luzzi refused to give up simply because of one bad experience. Two and a half years ago, he made the decision to outsource his needs. He saves thousands of dollars each month on his personnel and overhead expenses, as well as his ad spends.

Outsourcing this aspect of his business has also given him considerable flexibility in how he makes his advertising decisions. For example, he can decide to run a spur-of-the-moment direct mail piece because his provider, Car-Appoint.com, can, with very little notice, adjust their staff to handle the volume of calls it will generate. While Car-Appoint.com can mine a dealer’s database, Luzzi has chosen to have some of his senior sales staff contact past customers to handle those functions.

Of the 350 to 450 leads Car-Appoint.com works each month, they set roughly 100 appointments for the dealership. From those appointments, Luzzi’s sales team sells about 20 vehicles. Based on the results of his outsourcing efforts, Luzzi doesn’t foresee trying to reopen an in-house call center or full BDC in the near future

The Short Route to Outsourcing
Prior to the opening of Great Lakes Hyundai in Streetsboro, Ohio, and Great Lakes City Motors in Cleveland, Ohio, the owners and managers sat down and weighed the options of having in-house call centers or BDCs or outsourcing the work for both stores. In the end, they decided to bypass implementing in-house solutions and chose to outsource their call center.

Tom Orlando, general manager of Great Lakes City Motors and used car director at Great Lakes Hyundai, said their stores wanted to provide a more professional and confidential way of taking someone’s credit application. Their provider, DealerApps, takes the customers’ credit information, which the dealership receives via e-mail or through the providers Web site within minutes of completion.

Since all advertising campaign leads are funneled through DealerApps, which tracks and reports the success or failure of each campaign to the dealership, the dealership is able to make better advertising decisions. “It helps us to put the money where it’s working,” said Orlando.

This third party tracking is much more accurate than a salesperson’s ad source log. “It’s very hard to get a salesperson to remember to ask why the person called the dealership,” said Orlando. “[With DealerApps] it’s scripted and every person who calls is asked ‘What made you call?’”

Orlando, who previously worked for another dealership that handled all appointment setting in-house, wouldn’t consider it for his current dealership. “I don’t think we could afford to hire enough people, and then you have to have somebody that runs it.”

Benefits of Outsourcing
The cost and commitment factors always weigh into the decision to outsource or not. “Most dealers cannot or will not commit the necessary time and resources to make a call center or BDC function as it should to deliver results,” said Travis Weisleder, founder and general manager of InterActive Financial Marketing (IFMG). “The advantages of outsourcing call center work depends on the size of a dealer’s operation and what his expectations are. If a dealer is just going to hire a couple of people to make calls, it’s not likely to work because you also have to have someone to manage those employees to reach those expectations. Turnover is a big problem.” Even though outsourcing may not seem as personal to you, there is no equipment to buy or hiring and managing employees.

Dealers often think they can do BDC/call center work cheaper in-house. If they hired the right people, trained them daily and monitored the results relentlessly, then that might be the case. The issue is that dealers – like salespeople – are in the business of selling cars, not monitoring phone calls. Another issue that dealers face is maintaining a steady flow of leads to keep an in-house call center busy but not overburdened. Outsourcing eliminates the flow concerns.

Focused training and a timely initial response are key to the success of any call center or BDC. At the BDC Management Group, which currently only handles incoming calls and Internet leads, new employees must spend five full days training in order to be considered for a position answering phones. Then they spend 30 to 45 minutes per day in ongoing training.

Distractions at the dealership can often leave leads unattended for hours at a time. Outsourcing cuts hours down to minutes. Skilled call center employees have no other job duties but to set appointments, and the sooner they reach the prospect, the more likely they are to set the appointment. “There are some people that are very good at detail, very good at following up, and there are people that aren’t good at that. Generally people that are good at sales fall in the latter group,” said Steve Nickelsen, vice president of sales and marketing, BDC Management Group.
 
Persistence in follow-up within legal boundaries sets an outsource solution apart. At what point do dealership personnel give up on a lead? Cathy Nuccio, vice president and general manager of Car-Appoint.com said, “We will continue to call that prospect until we appoint it or until they tell us, ‘Don’t call me anymore,’ or for as long as we legally can.” Most states have laws governing the timeframe for these types of calls, which generally varies from 60 to 90 days.
 
Keeping live operators available even when your dealership is closed is yet another advantage of outsourcing. DealerApps, for instance, has operators available at any hour to field phone traffic generated by the dealers advertising. The BDC Management Group’s call center is open 16 hours a day, seven days a week. Having someone available to take your customers’ calls at any time relieves the worry of missing sales opportunities simply because someone didn’t answer the phone.

Experienced, professional management is another benefit of hiring an outsource call center. There are very few dealers who have telephone marketing experience. “Having trained professionals handling the calls takes the responsibility off the dealer, but still gives him the results he needs,” said Matt Dennis, president of DealerApps, Inc.

Available Options
Car-Appoint.com has the capability to handle both inbound and outbound calls. They communicate with customers via the telephone, e-mail and even online chats. They have the capability to mine dealers’ databases by importing the data into their CRM system and contacting the customers on very specific campaigns as directed by the dealer. For example, if Honda has an incentive for previous Accord buyers, they can contact past Accord buyers to set appointments for the dealership. Currently, however, “90 percent of our activity is tied to special finance,” said Nuccio.

ProMax recently launched an outsource call center; however, it is limited to current clients using their two main direct marketing products. “It doesn't matter how many leads are generated if the dealership's in-house call center, BDC or salespeople are not going to be contacting the leads. It's a total waste of the dealership's valuable advertising budget … This is the main reason we built the live call center system—to ensure that our leads are worked,” said Denny Long, senior vice president of direct marketing for Promax. The creation of this call center, like others, has a single-minded goal of converting as many leads as possible into appointment shows.

DealerApps, Inc.’s call center currently offers live-operator inbound call services including application taking and appointment setting, as well as offering online credit application services. According to Dennis, live operators are able to obtain more quality information from the customer than an automated system can, giving the dealer more to work with. While phone representatives will pass along any partial information they obtain to the dealership, their goal is to get a completed credit application. “[Dealers are] that much further ahead in the deal and … have an idea of what direction they’re going to go with [the customer] versus just a cold up where they really don’t know who’s calling or what’s going on. It puts them in an advantageous situation,” said Dennis.

BDC Management Group, also a call center, handles incoming calls and Internet leads to set appointments. The company utilizes the dealer’s own online credit application. Phone representatives begin by asking customers if they would like to begin the credit process. “About 20 to 25 percent say yes to that,” said Nickelsen, of the BDC Management Group. “We simply go to the dealer’s Web site and fill in the blanks on their online credit application.”

Outsourcing provider InterActive Financial Marketing Group handles primarily outgoing calls, making 12,000 to 15,000 outbound calls per day (meaning they dial to someone, not necessarily that they reach that many). The dealers have their leads, both purchased and organic, routed to IFMG, who will utilize telephone calls and e-mails in an effort to set appointments.

Cost Considerations
Comparing the pricing structures of the companies can be a challenge because they all charge differently. Some charge on a per-unique-lead basis, while others charge on a per-appointment basis. Car-Appoint.com, for example, charges on a per-appointment-set basis.

DealerApps, Inc. charges a monthly fee and a per-completed-application fee, rather than a per-call fee. There are no charges for calls where only partial information is obtained, but that information is still passed along to the dealer.

BDC Management Group charges a start-up fee and per unique lead. In other words, if the same person calls three times and sends two e-mails, the dealer only pays one fee. Dealers choosing IFMG as their outsource solution can expect to be charged per lead sent through the system. 

The Final Decision
Most outsource solutions are call centers, not BDCs. Your decision as to which you need – a call center or a business development center – will likely be answered when you determine what your goals are. Determine what calls you would like to have handled outside your dealership. For example:
Do you only need your special finance Internet leads handled?
Do you have an infomercial that is creating a flood of incoming calls?
Do you drop direct mail pieces and have a corresponding mail list that needs to be called?
Is your sales team proficient enough to handle the incoming call volume?
Do you want to capitalize on the opportunities within your own sold customer database?

Once you have answered these questions, the direction you need to go will become much clearer. A call center and a BDC each have the potential to significantly increase your telephone efficiency as well as your bottom line.

Vol. 2, Issue 2