"The easy part is to sell you the car,” Donald Dwan, general sales manager of Honda of Tenafly, tells the camera. “The big job is, after we do that, how do we take care of you?” Asking that simple question has helped to create the customer-first culture at the 79-year-old New Jersey dealership. Maintaining that image in today’s Internet age, however, has proven to be far more complicated.
The two-minute video Dwan appears in is part of a new ad campaign the dealership rolled out in late June to announce that the operation was removing the “D&C” from “D&C Honda of Tenafly.” That change will help to distinguish the dealership from one of its biggest competitors, a nearby Honda store operated by DCH Auto Group.
That low-tech change, however, is nothing compared to the many changes Tenafly’s third-generation owners, Norman Dorf and brother Jeffrey, have made to compete in the digital realm.
Two years ago, the dealership decided to eliminate its business development center. Veteran salespeople now handle Internet leads and work the phones. “We were spending a fortune on manning a decent-sized Internet department and we were going through people all the time,” Norman Dorf says. “That meant we had the least experienced people taking calls. Something just didn’t feel right.”
The Costs of Technology
The D&C name has existed in New Jersey’s Bergen County — one of the highest per-capita income counties in the United States — since 1932. That’s when the family opened a Chevrolet dealership at its County Road location. In 1971, it became the state’s first Honda store.
The store, which sells, on average, 200 to 250 vehicles per month, was on track for one of its best years when the credit markets froze after Lehman Brothers filed for bankruptcy in September 2008. Things could have been worse for the dealership if not for the support of the affluent community it serves.
The following year wasn’t much better, but not any worse. “Like everyone else, we made some adjustments with staffing and getting our expense structure right when the downturn happened,” Dorf says.
Online sales have allowed Dorf’s family-owned operation, tucked away in one corner of town, to compete with the area’s “800-pound gorilla,” the 27-store DCH Auto Group. The group’s biggest Honda store is located a mere eight miles away, but that didn’t stop Honda of Tenafly from recording five record sales months last year. Still, that doesn’t mean Dorf is a big fan of the Internet.
“The one thing I don’t like about the Internet is that it nickel and dimes you,” he says. “I mean, we’re spending a fortune between all the different technology companies. And now I need to pay someone to handle my Facebook page?”
Those rising costs were the primary reason Jeffrey Dorf decided to listen in on a few calls between customers and BDC operators. He was not impressed. “That’s when we said, ‘Forget it,’” he recalls. “There had to be another way, so we just got rid of it.”[PAGEBREAK]
Rotate and Reset
Arthur McCracken is Honda of Tenafly’s Internet sales manager. He oversaw the creation of the dealership’s BDC three years ago and he was initially reluctant to disband it. He knew that getting the sales team to handle extra duties would be tough to accomplish.
“It was a necessary move, overall, because what we were doing definitely wasn’t working — especially financially,” he says. “But I wasn’t sure the people downstairs could do it.”
The people downstairs are the dealership’s 11-person sales team; two of whom have been with the store for more than 20 years. McCracken’s statement isn’t a knock on their talents as salespeople; in fact, he knew their experience was the one thing he had going for him. But to make things work, he knew they’d have to pick up some new skills.
McCracken is quick to admit that his BDC was fragmented before it was dissolved. Turnover was high, and training new people was always a problem. There also was a deep divide between the operators and the sales staff. Salespeople felt the way leads were handed out was unfair and that BDC staffers were poaching some of their longtime customers.
Customers didn’t like it either. In many cases, the person they made a connection with over the phone wasn’t the person that greeted them when they arrived at the dealership.
The Dorf brothers’ bold decision, executed in mid-2009, solved many of those issues. McCracken operated as a one-man department for the first 30 days after the change, and he quickly identified the more tech-savvy salespeople to help him handle leads. That continued until the summer, when the rest of the sales team began to realize they would have to pick up some new skills to get a piece of the action.
“Not every salesperson was handling leads early on,” McCracken says. “But I think we started to turn the corner by the summer. Some of those little battles going on when we had the BDC started to cease, and everybody kind of got it.”
By the time it was eliminated, McCracken’s former department accounted for 18 percent of the dealership’s production. Today, the sales team is hovering between 22 and 24 percent. The goal, says McCracken, is to be at 25 percent. The sales staffers also are converting 10 percent of the leads they get, and McCracken has his sights on 15 percent.
Call in the Strategist
McCracken didn’t go it alone. He had sales strategist and trainer Cory Mosley, the magazine’s “Sales Driver” columnist, with him every step of the way. Mosley had worked with the dealership when it established its BDC and was instrumental in formulating the strategy for the dealership’s new direction.
What McCracken liked about Mosley was the way he meshed his philosophies with the dealership’s culture.
“When I was going to take over the BDC, I went to every seminar, every trainer I could, but the concepts all seemed the same,” McCracken says. “No one was able to say, ‘Let me learn what you guys are, what makes you different, and then let me put together a strategy that matches and allows you to accomplish what you want to do the way you want to.’ And that’s what Cory did.”
Mosley started by training the salespeople to handle leads. That meant reprogramming them to understand that the sale isn’t over if the customer doesn’t buy within 72 hours, or even after 30 days. He also had to familiarize the staff with sites like TrueCar.com. His theory is that dealerships can retain control of a deal without being confrontational if they know what information customers are arming themselves with.
“You need to know exactly what the consumer is seeing if you want to protect gross profit and regain control,” says Mosley. “People think ‘control’ is a bad word, but it’s about leading.”
One term Mosley added to the dealership’s lexicon was “price consultations,” which means the dealership will use all its resources to help the customer make the best car-buying decision. It’s a simple twist that customers seem to appreciate.
“A lot of times, it’s the language you use and how it’s delivered,” says McCracken. “Some guys use it and some don’t. For guys that don’t have the gift of gab, it makes a difference in how the customer perceives what’s going on.”
Mosley also trained the sales team to mine the dealership’s database and rethink their direct-mail campaigns. He taught them that mailers don’t have to be about selling. In fact, he says, sending a survey can be even more beneficial. They allow customers to rate their experiences and help dealers identify holes in the process.[PAGEBREAK]
Filling the Gaps
The work McCracken put forth to create Honda of Tenafly’s BDC wasn’t all in vain. When the salespeople came online, having advanced systems in place allowed management to identify several procedural gaps that additional technology could fill.
The first new solution was installed by Sunnyvale, Calif.-based Response-Logix Inc., which Mosley recommended. The company’s lead-management experts equipped the dealership with software that automates responses to price-quote requests. In fact, customers can receive multiple price quotes within 10 minutes, the baseline Mosley set for the store.
Mosley also wanted to optimize the dealership’s merchandising strategy, which meant working closely with the store’s Website provider, San Diego-based Autofusion Corp. “It was about putting as many mousetraps in place as we could,” Mosley says. “I just wanted the Website to give customers every reason to buy from the dealership.”
Site visitors are quickly engaged by a chat feature provided by Activ-Engage Inc. Todd Smith, CEO of the Orlando, Fla.-based company, once managed Dorf’s Chevrolet store, so he knew exactly what the challenges were and how his company could help. The software gives customers information about dealership specials and store hours, and can even connect them to a finance manager.
“Here’s a dealer not located on a main highway, doesn’t have a 40-acre facility, yet is highly competitive,” Smith says. “And that’s because they’re good at connecting with their local audience and because they know that success goes beyond the sale.”
Weaving everything together was DealerSocket’s CRM offering. McCracken was on the phone with the company at least once or twice a day during those first few months to get the system to mesh with the dealership’s process and the sales team’s skill set.
“Ultimately, the CRM is what connects all these dots and maintains a history of all those dots,” he says. “And they wove it all together, which was critical to getting salespeople onboard with everything.”
The dealership’s hybrid sales department is still a work in progress, and Jeffrey Dorf says he and his brother are always on the lookout for more effective solutions. He is quick to point out that the decision he and his brother made may not work for everyone or in every market. However, he believes that the connection between reaching more customers and selling more cars is a universal truth.
“Everyone in the dealership has to be ready to handle e-mails, texts or whatever medium our customers are using,” he says, “and that goes for service and sales.”
Things are smoothing out for McCracken and his hybrid team. In fact, he’s already moving on to several new projects, such as a new series of walkaround videos the dealership is creating for its online marketing ef-
forts. After that, he’ll begin integrating the hybrid Internet processes he created for the sales department into the service area.
“When the BDC didn’t quite work out, that could have been my demise right there,” McCracken says. “But the owners stuck with me and I appreciate that.”
Mosley also is amazed at what Honda of Tenafly was able to accomplish. “Nine times out of 10, eliminating the BDC is a bad idea,” he says. “But these guys did it and those efforts have now translated into 50 cars a month consistently.
“To me, dealers need to realize that you don’t have to have the premier highway location or an unlimited, mega-group-supported advertising budget to be successful. You can change the rules and still win.”