ROI matters especially when considering Automotive BDC's (Business Development Centers), so we're cutting through the noise to bring you the real deal on the investment and value BDCs offer. From Vinnie's ground-breaking work in pioneering BDCs to the daunting task of integrating them across multiple dealerships, we're shedding light on what it really takes to make them tick, and how dealers often misunderstand the cost of implementing an effective Automotive BDC operation. Whether you're on the fence about in-house versus outsourced BDCs, this episode is packed with insights to guide your decision.
Our conversation doesn't just stop at costs—we're talking about the big picture, the ROI of BDCs, and the strategies that distinguish a well-oiled BDC machine from the rest. We walk through the metrics that matter, from engagement rates to conversion, and share how a well-executed strategy can transform customer leads into profitable sales, as evidenced by a real-life case study. Vinnie brings his hard-earned expertise to the table, revealing the nitty-gritty of hiring, training, and maintaining the BDC workforce that becomes the lifeblood of a dealership's sales strategy.
We wrap up with a crucial look at what it means to choose the right outsourced BDC partner, as we dissect the delicate equilibrium of control and efficiency. If you're weighing the pros and cons of managing an internal team versus the streamlined approach of an outsourced service like Strolid, we've got you covered. Tune in to discover why this decision is about so much more than just the bottom line—it's a strategic choice that affects every facet of customer interaction and the overall health of your dealership's sales performance. Join us for an episode that promises to redefine the way you view BDCs and their impact on your business.
ROI matters especially when considering Automotive BDC's (Business Development Centers), so we're cutting through the noise to bring you the real deal on the investment and value BDCs offer. From Vinnie's ground-breaking work in pioneering BDCs to the daunting task of integrating them across multiple dealerships, we're shedding light on what it really takes to make them tick, and how dealers often misunderstand the cost of implementing an effective Automotive BDC operation. Whether you're on the fence about in-house versus outsourced BDCs, this episode is packed with insights to guide your decision.
Our conversation doesn't just stop at costs—we're talking about the big picture, the ROI of BDCs, and the strategies that distinguish a well-oiled BDC machine from the rest. We walk through the metrics that matter, from engagement rates to conversion, and share how a well-executed strategy can transform customer leads into profitable sales, as evidenced by a real-life case study. Vinnie brings his hard-earned expertise to the table, revealing the nitty-gritty of hiring, training, and maintaining the BDC workforce that becomes the lifeblood of a dealership's sales strategy.
We wrap up with a crucial look at what it means to choose the right outsourced BDC partner, as we dissect the delicate equilibrium of control and efficiency. If you're weighing the pros and cons of managing an internal team versus the streamlined approach of an outsourced service like Strolid, we've got you covered. Tune in to discover why this decision is about so much more than just the bottom line—it's a strategic choice that affects every facet of customer interaction and the overall health of your dealership's sales performance. Join us for an episode that promises to redefine the way you view BDCs and their impact on your business.
Welcome back to Dealer Insights. I am your host, sean Reigns, of course always joined, or most of the time joined, by the founder and CEO of Strollard, vinny Michichi. You can call him Vin, that is, if you know your friends with him.
Speaker 2:Hey Vinny, how are you Good Sean, how are you buddy?
Speaker 1:I'm doing great. I'm glad that we're circling back around on a popular part of BDC conversation sales process inside the dealership, taking this decision outside of the dealership. There's a lot of things to consider when dealers are concerned about the cost of BDC. So today for the audience listening and or watching, we're going to explore that a little bit more so that dealers have a better understanding really of the value, not just the cost, of BDC services. Because wouldn't you agree, if you're going to do it in-house, it can add up really fast. But also if you're going to choose somebody outsourced to do it for you, there's a difference. So we're going to get into that today and I think the first place I want to start, vinny, is really kind of the misconceptions around the cost and value. So the first thing I wanted to kind of just crack the bottle open with on you is what are some of those common misconceptions that dealers have regarding the cost of BDC services versus the value of those services?
Speaker 2:Yeah, so I guess the best way to start us off, I think, is to try to go back into history when I started to BDC and then we rolled it out to our group in New England to 13 dealerships. That was my idea because at the time I know I'm dating myself but internet leads were new and I saw a lot of value, a lot of importance in those leads that were starting to come in and I knew we needed to build a way to respond to customers quickly and all that and obviously drive more sales for the dealership. And over time, running a BDC or doing it with a sales team, going cradle to grave or however you really want to do it, can be done, whether you stroll it or you do it yourself, you do a BDC. You don't like BDCs. We had a guy at the show at Nata say he thinks it's like the third string quarterback because the BDC is how we worded it. I thought that was kind of interesting. But what we're really talking about is the mindset of the dealer and what are the expectations. Why do they have a BDC? What are their expectations for their sales team? What are their expectations for an outsourced BDC? And it's interesting because I have lots of talks with lots of general managers and we talk about that usually upfront and listen.
Speaker 2:I went to NADA school. I ran a dealership. It's like running four businesses under one roof. You're going to manage a sales team actually five if you include FNI FNI team, use, car department, service department, parts department, and then a BDC, so make it six and then maybe a body shop, make it seven. It's complicated and so everyone wants that right person in their organization to help manage that section of the business. And the better team you have around you, the better operational you'll be, the better and all that. So we did this for a large group, the whole East Coast and when I was asked to do it, I reacted exactly the way a lot of dealers do. It was like that's impossible. How are you going to do that? I just did a meeting with my sales team about mindset and that's basically me telling myself it can't be done, which isn't my core. Yeah, yeah.
Speaker 1:Would you consider one of the things that I, when I'm talking to dealers about BDC, when that topic comes up.
Speaker 1:It seems like a lot of times I've talked to dealers who think they know approximately what it would cost to try to outfit internally a BDC, like they've not done it, but they start to see the value and the concept of putting that department in.
Speaker 1:But then they kind of have this I don't know if it's just maybe they've never tried to hire for that, those positions and then they realize, oh my goodness, these people aren't as easy to find as far as being properly trained, reliable, and I've always thought that's one of the big things to consider. Even if you're able to staff up and build a BDC internally, it doesn't mean that those people will be as reliable as perhaps an outsourced selection. That even if those people drop off or a couple of people are sick, you'll never know it. With what you guys do, a dealership would never know if a person or two was out from the team, because you can swarm around and make sure that everything that's supposed to be happening for that dealership happens. But doing it internally one, it's usually a big eye opener of cost and two, I think that they're still plagued with those human issues because it's a small organization inside of your dealership in comparison. Any thoughts on that?
Speaker 2:Yeah. So it all starts with a lead shown, right. So should sales people handle leads? Absolutely, but are they trained to handle leads? Usually not.
Speaker 2:We hire people, we put them in positions, we give them a little blueprint and we expect results. And that isn't. And listen, there are lots of great dealers that have this figured out and do it well. So I'm not I'm not blank at statement, making a blanket statement throughout the whole industry. However, I have a new hire coming on. He ran dealer groups and he also helped fix broken stores and one of the reasons he wants to sign up with us or work with us is because he almost signed up with us six months ago and the reason was he knew it was going to take six months to a year to actually build a team. Now, if you're if you're pragmatic about it and not emotional about it, he's right. It's not like you can just snap your fingers higher, some, a few people throw them in a room and then they're going to do really well. So we've been doing this for 27 years, sean. So the reality of it is we have experienced. We have experienced people with experience folks and in the process that we've been following for years is very consistent. The reliability we give dealers is something that they don't have to worry about. Building that team and someone quitting to your point. But then we also, you know, we've spent a lot of time on our technology to allow us to build in the integrations with just not just with our phone system but with the, with the CRMs, to give dealers transparency into what we're doing.
Speaker 2:The challenges sometimes the results aren't what they expect. We had a dealer the other day tell us that they expected us to get 20 appointments a day. We just signed up with them. They only get 500 leads a month. I mean, do the math at 16 leads a day, so how are we going to get 20 appointments? So it's like, you know, a lot of times people their mindset is oh, a BDC is going to help me sell more cars. But it all starts with a lead and turning that lead into a showroom visit which turns into a sale. There's a lot that goes into that, a lot more than I think a lot of dealers spend time understanding to their defense. They have a lot of stuff they're paying attention to.
Speaker 2:Yeah all we pay attention to is that portion. We did some studies at the large group I was at. Average cost at that time it was 10 years ago was around $5,000 to $6,000 per BDC representative, right. The other thing we came up with you need a minimum of three people, even if you're a small dealership, because you need to cover the hours you can. I'm on the phone, right, and then someone else is calling in like or I'm doing follow up, I'm responding to a new lead and a new email or a new text reply comes in. So this is another reason why a lot of people are turning to AI technology, and I don't necessarily think AI technology is a bad thing.
Speaker 2:But at the end of the day, ai doesn't understand emotion. It's not curious. It can't tell stories, it can't build rapport, it can't build relationships with your customers. All it can do is kind of put them in a loop and say, hey, we know you responded and we're gonna get back to you, but someone has to get back to them. Now there are some tools that are actually answering questions. I get that. But at the end of the day, what do you want, mr Dealer? What are your expectations? And so you want it obviously cost effective. No one would argue that. But if you only put in one person or two people in a room, they're not trained, chances are you're not gonna get great results and you can keep going through the motions and finding new people to replace the people that left, and it's difficult, unless you obviously have a story that you sell in 250 to 300 plus cars per month. Then you can hire more than two or three people and make it run more successfully. Does that make sense?
Speaker 1:It does. Something that you mentioned in that answer that I think is really interesting is you have a dealer that their expectation while it sounds like it might not have been disclosed up front, that their expectation was 20 opportunities a day, that they're working yet they hadn't calculated the math. But they couldn't have chosen a better partner than you guys, because you guys literally can kind of reverse or forward engineer the math. You could literally ask a dealer a question like that Well, is there an expectation about how many deals from all internet sources you'd like to be working per day? And if somebody said 20, at least I know you would say okay, how many leads do you guys get? And then you would start basically digging in on all of the variables that could potentially lead them to that number. And I think that's important for dealers to think about is if they have it in their mind like, hey, we're gonna get a BDC and then we wanna be working 10 deals out of the BDC a day.
Speaker 1:I guess, depending on market brand, things like that, there are a lot of variables. But this leads me to a question I wanna ask you around. When dealers are trying to, I think, accurately assess ROI in their BDC investment. Do you think that one of the better things for them to do is just look at, well, how many deals did we sell? Is it compare the value of a BDC deal versus something they do? Did they get into that where they'll compare? Well, these deals were generated through the BDC and so maybe they were more profitable or less profitable. How do they dig in on that? Do you have recommendations there?
Speaker 2:Yeah, I do. I mean, obviously I get more in depth into a dealer's business than just handling leads, right? I just don't wanna understate this, Sean. If you ever walked into, say, Dunkin' Donuts or Starbucks, right, and there's eight people in line and you only have one person helping those customers, yeah, it's cheaper to have one versus four or five that can get through the line quickly, right? Or you could potentially have people walk out and you could lose business, right?
Speaker 1:Yeah.
Speaker 2:So I would ask dealers what do you want? There's a lot of leads coming in. Do you want an ROI or do you want all those customers responded to an institute quickly and professionally and obviously asking for appointments and all that kind of stuff? Because a lot of times dealers would just throw more and more people into the mix and they don't have enough people to actually do the job properly. So we've designed it internally very efficiently different sections of our business that handle certain things, plus clients, success, plus trainers, the trainer people, and hiring and recruiting and all those kinds of things that are in place at Strollett. You know, to me it's a no-brainer to use Strollett, but obviously if you have all those pieces in place in your dealership, then clearly you'd wanna try it in-house and I wish you the best of luck and I'm where the type of company we'd even give you advice and help you Like, because frankly, we're not here to just say, oh, we need your business, we're gonna double your appointments and all that kind of stuff, like. I'll give you a quick example.
Speaker 2:My dad, as you know, works for me and does listen to lots of phone calls. I have a conversation with him every morning on my way into work. I've been going to the gym a lot lately, sean, so I leave the gym and I call my dad, right? And so he's telling me about one of our clients who is really trying to get their engagement rate up, meaning we wanna connect with more customers. Well, what he found by going through the data was that a large majority of that it's an independent, so they're selling used. A lot of their clients are from way out of their market, so he's focusing in on show rate percentage.
Speaker 2:A lot of people go lead to close. Oh, I wanna be 10% lead to close. Well, if the show isn't there, then it's on the BDC. If the appointment's out there, you could push point to the BDC, but if they're not closing deals in the showroom, you're never gonna get to 10%. But his point was we're seeing about a 20% show rate. That means out of 100 leads, 20% of them are coming into the dealership Instead of appointments. And I love the way he put it, because it wasn't so I never looked at it that way. And he goes. And then we have this other store. We're at 35% show on leads. I mean 35, that means we gotta get me getting more than 35% appointments and he's saying that's what we really should be measuring. And so when we know that the show is low, he start diving in, and my people will dive in, and they start recognizing that nine out of 20 leads are outside their market.
Speaker 1:Interesting yeah.
Speaker 2:So what are we really trying to accomplish here? Yeah, we wanna respond quickly, professionally, follow up, all those things that a BDC does well, but we also you really wanna understand what's going on, or not? That's what I'm trying to say.
Speaker 1:Yeah.
Speaker 2:And that's what I've always been after to try to help dealers improve, you know. I think it's really kind of just saying we just handle leads and we'll just get you appointments, Cause that's obvious.
Speaker 1:But yeah, you're right, though, and there's so much more to it, and one of the things I get on ROI that I think dealers really need to pay attention to. I can't speak for other BDC services. I know yours better than any others in the marketplace and, of course, I have experience working with dealers that have had BDCs or have BDCs in their business BDCs that they built internally but I will tell you one of the things that I have always advocated to dealers around well, what's the return on my investment? I can tell any dealer that, if they're using straw lid, that what a dealer does in creating demand, that's all they're marketing Like, hey, we got interest rates galore, we got.
Speaker 1:Whatever they're doing to attract demand is not cheap.
Speaker 1:Right, they spend a lot of money, as they should, but what dealers don't realize is that if they don't have great internet salespeople, salespeople of internal BDC or outsourced BDC, that the return on investment of capturing that demand is absolutely oftentimes in the negative for dealers because they don't have people who are capturing them, the demand and putting that data CRM oftentimes in the right places so that, even if they don't sell that customer on the first attempt, they've got the data and they're building the blocks, the foundation, if you will, for that either short, medium or long-term followup with people that people expect these days.
Speaker 1:And I can tell people and of course you know this because you've built straw lid but straw lid does that. So a dealership spends a lot of money creating demand. Well, instantly, if you hire straw lids, straw lid helps you capture that demand and get the very best out of it. And it's kind of an interesting thought process because if you were to compare what straw lid does perfectly well almost nobody's perfect because it's humans, but nearly perfectly and in an ideal format and compare that to almost any other model, I guarantee you there would be misses that aren't found within straw lids process because of that seriously important capturing of that demand really, really critical.
Speaker 2:The meat of the conversation that we wanted to have today is cost versus value, so I just told you it's five to $6,000 in the hire person, right?
Speaker 1:Yeah.
Speaker 2:Let's say you need three people. You're talking somewhere in the neighborhood of 15 grand a month, roughly. First and foremost we're half of that, typically right. Obviously, volumes may change the pricing and so forth, but we typically come in half to two thirds of what it costs you to run a BDC internally, so that's out the window. Then I would say we have a recruit, we have someone that's focused on recruiting new hires and we have a whole process around that. Our hiring process is extensive and we came from a public group right, so we have all the HR training and background around hiring properly and recruiting. Secondly, we put them through two full weeks of training. Third, they don't actually handle a new lead until we feel they're ready by making we haven't make long-term follow-up calls and things like that. When they're ready we move them into the BDC and we have seven trainers on staff that sit with and watch and monitor new hires constantly. I just mentioned we have my dad listening to calls so he knows everyone in the company, that who's good, who needs work and so forth and so on, and so we have that in place.
Speaker 2:And then we have our ModCom team that responds to emails 24 hours a day, seven days a week, and my challenge would be can you do all that? And if you can, great, do it. If you have all that in place, then you'll be successful BDC. If you don't, you're going to struggle. And so we have the ModCom team that does the chats 24-7 and the lead response 24-7, which gives my BDC team the ability to pick up the phone and call the customer right away. By the way, it's much better than the AI response because and I approve of that with data that you're going to connect with more people by speaking to them on the phone, then waiting for an email reply Text, on the other hand, has become a big deal, and we do respond quickly to text. So we have our technology integrated with these CRMs to push that email out to the customer and into the CRM. We also have the ability to call it quickly, put notes in, and we have more stuff coming that is involving AI, by the way, but we're feeding AI data instead of asking you to do our jobs, and then we're feeding that data back to our agents so they can personalize conversation. Now, can you do all that? That would be my challenge. Can you do that? And if you can, good luck. And if you don't have problems with turnover because, from a reliability standpoint, we don't quit, we're there every day working. You can go to bed and rest assured that you're going to sleep well at night, right, that all this is being done.
Speaker 2:From a transparency standpoint, we work out of your CRM. And one thing I would warn a lot of dealers is a lot of new and other BDC companies that do all this work outside of your CRM. So I took the general manager approach of this. I'm a little cynical, bostonian, I guess, but I don't trust people. Like I want to see it, we timestamp, we TO deals to them directly, we communicate through Slack, right. We have all this data. So if the dealer says, hey, this didn't get done, we can easily see whether it got done or not and so we have all of that figured out.
Speaker 2:And it took us 10 years to figure that out. So it felt like this all was stuff we were doing five years ago. Right, and we're continuing to improve and to get into AI. But from a consistency point of view and process, we got that down Hiring, training, recruiting, lead handling all that from a reliability standpoint, we got that down. We don't quit on you and from a transparency standpoint. Not only do we have it down, but we're going to enhance that. So if you can do all that internally, then you shouldn't consider outsourcing a BDC.
Speaker 1:Would you say that sometimes dealers need to consider. I mean all that you just shared. I mean that that's a decade plus. I mean that's not even factoring all of your personal experience in retail first, and when I first met you, I had never seen I've seen a lot of BDCs. I had never seen one at the size and scale that you had built and were operating there out of the Northeast it was, I mean, and I think you probably had that experience. I'm not the only one.
Speaker 1:Probably a lot of people that met you back in those days would say, oh my goodness, like some sort of awesome profanity to you know articulate, whether they were like experiencing, like holy, you know what I'm talking about. And so not not for nothing. That's really important. To experience, as I always say, is probably the biggest differentiator. But now you're 10 years in on this trial and side of being able to provide this service to anybody really that would be interested. But do you think dealers, that they appreciate when you're talking cost versus value? Do you think they appreciate the fact that there's so much value in what you've already found operational efficiency, training, consistency, transparency, working in the CRM? I think that's probably a big man.
Speaker 2:The challenge with Car Guys and Car Gals Sean, the challenge with Car Guys and Car Gals is when I tell them these things, they because they're entrepreneurs, especially the GMs and the owners of these dealerships how can you do it better than me? I can do it, I'm a Car Guy, like I can do anything and that's great and I love them for that and I'm probably the way I am because I spent so much time I spent 17 years in retail. The challenge I would challenge that and say why do you want to do all that when we can do it all for you? And so they can say well, it's cheaper and my salespeople should be handling leads. Okay, great, I don't disagree with that. But they know as well as I do that the salespeople aren't sitting at a CRM all day long and that replies are coming in and texts are coming in and replies are going back and texts are going and emails are going back and phone calls are coming in and they're trying to sell cars. So I always knew, from the time I started this, that this was an expense for a dealer. But when you talk about cost versus value, how much are you losing by not spending money to make sure up this portion, this critical portion of your business. How much are you losing? So that's a cost versus value statement and I would challenge anybody on that.
Speaker 2:You know we had a dealer try to give us cancellation and it was a cost thing because I understand dealers are under a lot of pressure right now, expense cutting and all that. And so I told the. I told the dealer. I'm like Listen, we've only been with you 60 days and it's new to him too. Right, I said did you know that we scheduled 90 more appointments and 67% more shows in the last 60 days than you did the previous 60 days before us? Not to mention, you sold 180 cars for the first time in a while, in January, when everyone was in trouble. And then he's you know, he's like Well, it's not my decision, my team felt like they could do it themselves, and I hear that from time to time. And he's like why don't you talk to the general manager? Because I was talking to the owner and see what he thinks. So I call the general manager and he's like what are you talking about? I love you guys Like I don't want to cancel.
Speaker 1:A rogue GSM or something.
Speaker 2:Yeah, so it was just kind of comical, but I think the owner, when I told them that he wasn't really paying attention to that, right, he was being told, nobody wants to say the guy is a great guy. I think he was just being told by maybe some of his management team, Right, oh, we're not seeing that much of a lift.
Speaker 2:It's like okay yeah is some data, is some information. So the reason I bring that up is because value and costs are, are the. You know they're both important. I mean, I run a business so I don't want to. It's funny, sean, I don't like spending money unless I see I like I'm getting value, but I have no problem spending money when I'm getting value. So he just wasn't seeing the value because he wasn't looking at the CRM of the data and stuff like that and he's the owner. So but the general manager saw it right away, you know, yeah, so like it's all it's. I just did training on this.
Speaker 2:Perception versus perspective, right, the perception of outsourcing a BDC. To some might be unusual, unorthodox. I need to have my own team internally, but at the end of the day, we're delivering a consistent, professional approach to your customers every single day, on every single lead and on every single call and on every single follow up. You can see all that in your CRM, plus reporting, plus insights, plus reliability, plus transparency. That's why if I talk to dealers, whether they sign up with us or not, they always leave conversation with us saying wow, sounds really, really good. I've actually had dealers say that sounds too good to be true.
Speaker 1:I think that there's so much that's easy to talk about at the surface of this, but I don't think people always start to dig and go a little deeper. One of the things I also want to get your perspective on, because I think it's really important relative to outsourced BDC services, is understanding service levels and the cost implications there. To give you a little more specifics, can you share some thoughts on how costs can change when there's a difference between, say, we did one answer of a phone call or maybe just form submission, versus you guys can do that, but you also offer a full service, kind of the whole bad mamma jamma, which is every type of communication. It doesn't matter if it's a Facebook message, a text, a form, fill, a phone call but then also you can tell a dealer yeah, we'll touch it once or we'll work without multiple times over a long period 90 day period or whatever. That obviously is going to have cost implications. Can you share a few thoughts on that? I think dealers need to always consider that.
Speaker 2:I think it's safe to say that we can all agree that when a lead hits a CRM, any owner, general manager, partner group, whatever wants that lead responded too quickly.
Speaker 1:Yeah.
Speaker 2:Stop the clock. Okay, yes, stop the clock. Right, what is the ROI for responding to a lead quickly, right, I don't know, but, like, do you question your receptionist and what you pay the receptionist or the title clerk what you pay the title clerk, or are you questioning what's the ROI on the title clerk, sean? Right, because I've always struggled with this. The CEO of the group I used to work for asked me one time he said if we were to unplug the BDC, how many car sales would we lose? And it's a very, very difficult question to answer, but I know they would lose sales. But the answer I gave him was wouldn't you want all of your customers that are reaching out to you to be answered quickly, professionally, and responded to quickly and professionally in a consistent manner? And he liked that answer, because that's really what we're talking about.
Speaker 2:Right, the data that comes through. I love sharing that with dealers because it gives valuable insights, but it's not what our primary job is. But we get to see all that coming through. We get to see the appointment set rates, the engagement rates and our effectiveness to an appointment and all that. I would challenge any dealer out there other than the ones that are running super well-run BDCs already. I would challenge them are you seeing that? That kind of data, that type of consistency, that type of process? We sell a sales process, sean, it's not a BDC. We tie in the management team, we tie them in everybody. So that's the sales side. Now we can also make sure that they don't miss any service calls.
Speaker 1:Yeah.
Speaker 2:Sure, there's technology that can schedule appointments for you, but I can promise you I know more dealers right now are yanking it out because customers are complaining and upset because they're getting put into that loop of terror, right, where that thing is an answer to them. So now they're getting switched and it goes to that ear. How much business could you potentially be losing there? I don't know. Don't get me wrong. I'm not making. We're in AI, like I said. I'm just telling you that we answer calls.
Speaker 2:What kind of value do you put on that when we can actually schedule an appointment with somebody that wants to do business with you? And what happens when you don't answer the phone? You're basically telling the customer or you do put them in the loop of terror, as I call it You're telling them they're not that important to you. My dealers are very important to me. They can all call me anytime and their customers are very important to me and I know they don't have to believe that, but our whole company's been.
Speaker 2:I mean, we have 10 years, we have people that have been together for up to 22 years working for us, working together, and so we got that inbound service. Now you can do outbound campaigns. How many dealers are consistently touching customers on whether it be a CSI call or a lost customer call, in service to generate more business or a recall campaign that you want to generate more business or an equity call and actually touch your customers at a time when they need a call Not all the time. Right, I used to tell dealers all the time when I was doing e-commerce for that group. I handled all the digital marketing. It's like you don't want to hit your customers with an email or call them all the time.
Speaker 1:Yeah, for sure. And it's.
Speaker 1:You've got to be explained, though. When you talk about caring for and your dealers can call you anytime, not everybody knows that. Maybe some people that consume the podcast know you, know me, know us. Maybe a lot of people don't. I can tell you because I have been in dealerships that use your company.
Speaker 1:I think probably the most impressive one was when we went to Baton Rouge and spent a whole day with Matt Bowers, which he didn't have to give us as much time as he did, but in about a two-hour span with him he went through Without hardly taking a break or a sip of water. Two hours of examples of how what you've been doing for a long time makes a huge difference. And his people. I think we even captured some of this on the video that we were shooting with him, where he said every single one of his people that come on to run a store that are going to advance in their own careers, they all end up saying, hey, where's Strahled? Bring him in.
Speaker 1:And the store that we were in across the deep Dodge Ram store in Baton Rouge the whole staff there was very tuned in and familiar with Strahled and super appreciative, and I remember that the GSM the day we were there was just overjoyed because it was actually when inventory levels were kind of still compromised pretty significantly and they were still absolutely delighting their customers and selling more vehicles than any other competitor of those brands anywhere near their market. And they were attributing all of that to how well things work with Strahled, which just I mean it didn't blow my mind because I know I get it and you said this justa few minutes ago. I would love it if the whole industry would compare or think about the things you do as a sales process solution versus let's call it.
Speaker 1:BDC because we get so entrenched in acronyms. But you're going to have to get people's attention by saying those three letters BDC. But the truth is my experience in that Baton Rouge store as well as I know other dealers. It's the same thing. What they're saying is our sales process now makes our customers happy. It collects all the data that we should be responsible for and it makes a significant difference because they're not having to worry about policing, maybe a lazy salesperson the things that really bring the pain and the problems to dealers. You guys are pain relievers and problem solvers around sales process. It's hard to put a dollar figure on that. I know you can, but the value to me is far exceeds the cost.
Speaker 2:If I was going to tell dealers one thing about Strahled that's really, really important if they were to consider working with us, it's that we don't.
Speaker 2:We don't take away all their pain. They have to work with us for this to work. Sure, and my people are really conscientious and they work hard and they own it. Everyone feels it if we make a mistake. For example, when we're transparent and we're a little reliable and we're consistent and we follow a process, and that sales process is an extension of their sales process inside the dealership. So we do become part of their team and we do expect them to do things on their end, like respond to us when we need their help. We expect them to confirm appointments because we're setting up the customer expectation that they're going to come in and meet with a manager.
Speaker 2:It's a very manager-centric process. So, at the end of the day, what I would tell dealers is if you don't want a really professional sales process in place that treats your customers well and then that extends into your dealership, then don't call us. It's that simple, because it's not going to work and I have referrals. Deals will ask me for referrals and I'll say call. I have a few of them that I sent to and they'll be like yeah sure, I have no problem giving you guys a reference, but here's what I'm going to tell them.
Speaker 1:It's not all on Strollard, like we all have to work together, and that's huge, sean.
Speaker 2:And so when we talk about cost versus value, yes, there's a cost, obviously there's a cost, but look at all the value we bring and how much we do that. You don't have to try and find people and hire them and train them to do all these things. We do all that for you to that point, right. And then you've got to give them a good presentation and representation and welcoming of that customer when they show up at the showroom or service department and so forth.
Speaker 1:Yeah, for sure.
Speaker 2:I don't think sometimes when I talk like I have this imposter syndrome. One of the things Strollard does really well, sean, is we don't brag about, like all these things. I mean this is the most I do. Braggon is on these podcasts and I don't even consider Braggon. I feel like we always are just having a conversation. We hide a lot of the value of the things we do, because it's hard to explain and it's important to understand that most of our business came from relationships.
Speaker 1:Well, it's also if dealers yeah, Matt's a great example. Matt's the one that when you open the hood and you want to see what's really going on, it's fantastic when you have successful dealers like him. His own personal story is amazing and the fact that he attributes Strollard as such an important partner to their success is huge.
Speaker 2:Watch the story again. He's the guy who told me he was going to own dealership someday, and he did it.
Speaker 1:Now he's got his own little dealer group. It's so impressive, I mean. I'm very, very I've always been impressed with it, A lot of strength master videos.
Speaker 2:Another one that I met him when he's 25. He told me he was going to own a dealership. This kid put himself through NADA school. He didn't get sponsored. A dealer there said, hey, here's my financial statement, you can use mine, because he didn't have one. And the guy he owns one of the most successful dealerships in New York right now like in terms of how he can work and how he can work.
Speaker 1:A question. I think this could be a short or a long answer, but for dealers who, you know, they're like listening in and they're thinking, hmm, okay, I do want to choose an outsourced partner. Like they already know that doing this internally is like they're not going to be able to pull it off for whatever reason. So they're considering outsourced players and you know, I mean the market. There may be other people that are ideal for somebody, but when a dealer is trying to choose an outsourced partner, what are some of the factors that dealers should think about? Not just the cost, but there's a lot, you know, because there's there are people out there that offer a BDC service, but they're not exactly the same. And so what would you tell a dealer who's kind of thinking I'm going to go outsourced, but what should I be looking for?
Speaker 2:Yeah well, it's a very good question. I personally don't know a lot about my comp. I know a little bit about them, but I don't know enough about them, so I would never put down the competition. But I know what it took us to get. I know what we did for 17 years in retail and then I know what it took us the past 10 years to get to where we're at. And so everything we've been talking about whether it be consistency, an actual sales process, implementation, training, hiring, recruiting, the way we do it, whether we the reliability factor, the 24 seven response to email text chats, the transparency that we work out of your CRM Make sure that's a big one, because I've heard a lot of dealers come to us after leaving other companies and say we didn't know what they were doing. You know they would schedule appointments but none of the notes. Nothing was in our CRM. They were doing it in some other system which.
Speaker 2:I think is crazy. Make sure that they're not just you know, I mean there are boiler room type companies out there that will just pound on your customers constantly. I've had a lot of dealers call me on those companies and say they were upsetting a lot of my customers because they would call them five times a day, like on the first day or two. And it's like you know, you got to be realistic. Every you know car guys, they want appointments, they want to sell more cars. I get it and girls and we do that. And if we thought there was success in calling customer five times in a day and, by the way, the other complaint I heard of that same company was not only calling them a lot but the different people calling all the time, so the customers getting confused.
Speaker 1:Yeah.
Speaker 2:We work, we build a profile for each of our people into your CRM and they're you know, don't get me wrong we do help them out when they're off or out and answer their responses, answer their leads, but we usually have a manager doing that or team leader doing that kind of stuff. So, like I know I'm getting into the weeds here a little bit, but go back to what we said in what we've been talking about on our marketing stuff. Like we are, we are delivered, consistently delivering a process around hiring, training or recruiting, hiring, training, sales process. We tie in your store. We do a great onboarding, no-transcript. We meet your team, your management team, your sales team. We go through the whole process thoroughly. Is that important? Reliability and transparency, I mean it. You know when you're talking to them and if it comes down to it, shame on you. If it comes down to price and I'm not saying we're the super expensive because we're very competitively priced but if you pick them because of the price, you're gonna get what you pay for.
Speaker 1:Yeah, yeah, well, and why aren't?
Speaker 2:there there are some companies out there that are commoditizing this type of thing and they can't do all the things we do and do it for some of the prices I've heard out there. But good luck. And, by the way, AI isn't free either, so yeah, too important I'm gonna get.
Speaker 1:I've got a couple of things that lead us a little bit to the future, but a couple of things that you're mentioning there I think are really important.
Speaker 1:One I always like to remind people in our industry, but especially on the retail side, on the dealer side, is that BDCs are not call centers, and if you are using a BDC internally or you're looking at outsourced ones, as we need a call center, that's when you get like the round robin of whoever gets it in their rotation is making a call. It's never the same person, they're building no rapport and everything that you've done, if you think old school road to the sale or relationship and rapport building, is out the window, because call centers oftentimes don't have much, if any, industry specialization. They're just basically doing the rapid fire on the phone. And if they get into the digital written communication back and forth as well, it's usually awful, it's atrocious and it can have catastrophic consequences to the relationship or, more importantly, the reputation of the dealership, and I've told too many dealers that you can't sacrifice your reputation for what you think is gonna be the convenience of like a call center.
Speaker 1:Don't be looking for a call center where it's not 1978. You're right, it's what's happened with sales process solution services, which yours would be easily described as that, not just BDC. That's very different than that old school mindset of decades old call center activity which is I would never recommend a dealer does that.
Speaker 2:I think that's really yeah if you want someone to handle the beginning portion of your sales process. That's what it is. It's a sales process. Our people are trained on models, makes, technology, how to handle objections, all that kind of stuff. That's why we is. The reality, sean, is we can't take on every dealer in the country, so the competition doesn't scare me at all. I want the right dealers to work with.
Speaker 2:I don't want every dealer. Some of them just don't. They want the lowest price guy. Good luck, and I wanna do a good job. And let's say again, I don't wanna make it sound like we're super expensive it's just that when I was with that big dealer group I did a lot of work with the CFO about cost around, what the centralized BDC cost, and his point to me was if you can get a BDC to produce sales or be involved with generating sales and you can get the cost under $200 per sale generated, it's worth every penny. So we have some dealers that are down in the low 100s. We have some that are well over 200 because they have bad lead quality and so we can't control their marketing or what they're paying for third party leads and all that. It's a volume kind of deal, but we know that and we can talk through that with you.
Speaker 2:I don't think that a lot of these other companies would even consider talking to you about that. They just wanna say it's cost you this and we're gonna get you load it up your showroom with appointments, and then that's it. And the dealer's like, okay, that's what I want, and they sign up there's so much more to it. That is a really good point.
Speaker 1:Yeah, that's a really good point, Something that you and I've talked about a lot and I know I think some people are uncomfortable maybe talking to the dealer or helping the dealer. At least think through this when it gets down to personnel, and how many people do you need on your side if you were to bring in a really robust BDC service as an outsource solution and I've always tried to tell dealers that are asking my opinion about it. It's like do you have the stomach to perhaps let some of your staff go that are your underperformers from a sales perspective that you don't need? When you find out that a company like Strollard outperforms people like that and I know that's tough, but I do wanna make sure that in the episode that that's something that dealers even though it's kind of me saying it, I don't know how you feel comfortable about it but when you're thinking cost value, cost value if you're retaining underachievers and it's just the man it's hard to let people go Like you don't like doing that.
Speaker 1:It's an uncomfortable part of managing a business, but you gotta separate those personal decisions from business decisions, and so it could mean that if you're gonna do an outsource, especially like your company, that you might have to evaluate what people get to stay on the bus, especially in those lean times, because it's not. You can't make it personal. It has to be all about keeping the lights on keeping customers happy. Moving metals, servicing metal All of that has to be a priority and it does factor into cost versus value. If you have people that cannot provide the same level of value in your sales process as, say, Strollard could, then they may not be long in that seat on the bus or on the bus you know, completely on the bus. So that's always a factor for people to be able to think of, Cause it's not fair to blame a very capable solution or a company that you've chosen because you don't wanna get rid of people that really don't wanna get rid of people.
Speaker 2:I can put you an example I lost a deal to a guy overpriced, and I was talking to him about like how do we save you money, which I'm sure none of these other companies or most of them don't do it the way I do it, but I look at their league quality. So if it's an OEM, third party lead that we know is notoriously terrible, like let's not hit and handle those leads the way we handle all the rest of them, cause it's gonna cost you money for me to labor right, it's like a labor charge.
Speaker 2:So like we dive into that we dive into that when we're pricing stuff out, whereas the other companies like oh no, no, no, we'll handle them all, we're gonna get you lots of appointments. Like I wanna be realistic about it too. Like we see data, I am an optimistic person, but when I know that we have you know, we handle 150,000 conversations a month in here, sean, and we track the data. So when we know what lead source is in performing, why am I gonna charge a dealer money just to handle them?
Speaker 1:Yeah.
Speaker 2:And we do. We'll do them like on a one touch, on one day or two day or whatever. We just don't follow up with them longterm because we know it's futile and there's not much in there and anyway we do a lot of examination on that kind of stuff. So when it comes to cost versus value, sean, the one thing I would love dealers to understand is we respect that and understand that we have spent the last few months reducing a lot of our dealer's prices because their lead volumes have gone down and then, instead of going out buying more leads they're smart, they're like you know, the market's just not there and we wanna adjust with them. We wanna be a partner, right. Like. We can't do that, you know.
Speaker 2:If you took the three people I said you need, right? Let's just do a little math here real quick. You need three people in a BDC and let's say it costs you 15 grand a month with taxes and insurance and benefits and all that included. You need to sell 75 cars for it to be under that $200 per car per sale. That expenses 15 grand a month. You could add more on to it, but let's just use 15. You have to sell 75 cars. So if you're a dealer selling 100 cars a month and you got three people in there, there is a bad ROI.
Speaker 2:Yeah, yeah you know, whereas straw it might come in at half that price.
Speaker 1:Yeah, that's a great point.
Speaker 2:You know, and there we do recruiting, trading, hiring and do all these other things, so to be, that's why it's like a no-brainer. So if a dealer wants to understand cost versus value, you know, if you got one person, you're losing business. If you're using salespeople I love salespeople, I am a salesperson but you're gonna lose business because they're not as organized. They're trying to sell cars. They'll get in there, they'll cherry pick, they'll find the leads that they want to work and then, and the leads that are responsive, but they're not gonna, you know, bang the phones like like a BDC can. So you're gonna lose some business. Frankly, and you know, and if you're gonna use a BDC, you're potentially gonna lose business if you don't potentially, you know, have the right people in place and and you got to train them and they're not good at it and so forth.
Speaker 1:Yeah, and.
Speaker 2:There's Sean, I guess, is what I'm saying like where's the cost versus value there? You know, I don't we don't have a long enough show to try to dissect like what they're losing and how much, but I mean, I think we can all agree that there's opportunities missed.
Speaker 1:Yeah, and I, you know I there's. There's also room for things we don't we're not gonna get into today, but you know the because we've done a couple episodes on this. In fact, you probably saw this, but Somebody called out one of our AI related episodes because I was gonna talk a little bit of kind of future of things happening in BDC and I Love the fact that somebody on LinkedIn said look at this article and they referenced then are one of our recent episodes. So for the audience, we, the runway is clear, so we're gonna land the plane. But there's also a lot of how way higher level of value into this consideration. When you're thinking about, you know cost versus value, that you know. Keep your eye on the future of what you could do internally, but also what these outsourced solutions can provide, because there is no question that, vinnie, with what you and straw are doing, you're so far ahead of that mark. So, hey, listen, I say that's the great place to you know.
Speaker 1:Park the episode if you like it. You love it. None of the above? You, you've heard it. We love to hear from you. The dealer insights podcast gets better with comments, questions and feedback and recommendations from you, so drop them in the comments section below, especially if you're consuming this at YouTube. You can also always drop an email to info at strawlet calm and then until next time, stay strong and solid and you'll never miss.
Speaker 2:Thanks, Vinnie.
Speaker 1:Yeah.