Alan Ram is the President and Founder of Alan Ram’s Proactive Training Solutions, where he trains dealerships to boost productivity through effective telephone, Internet, and client base management. He has worked with and continues to work with tens of thousands of dealerships, salespeople, managers, business development and Internet staff across the US and internationally.
With over 30 years’ experience in the automotive industry, Alan has seen what it takes for dealerships to succeed– and where the worst pitfalls can happen. We were honored to sit down with Alan and get his best strategies for dealership growth in an age of changing customer needs.
How did you get into the automotive industry?
I got into the industry completely by accident, which is how most people whose dads aren’t dealers get in! I joined the Marine Corps at 17, and when four years were up I wanted to stay in San Diego. Selling cars was my way in.
Years later, you’re in training– how did you get there?
I was always good on the phones– with follow-up, referrals, and repeats. I realized early on that chasing ups wasn’t what I wanted to do for a living, and found my niche in building customer bases by phone. Then, when my dealership sold in 1991, a dealer down the street reached out to me and hired me to train his people and teach them what I do. Then he asked me to speak at a 20 Group, which I did, and then it kind of pollinated from there.
There was no master plan, but each time I got an opportunity, I maximized that opportunity.
Today, you offer training for dealerships on a large scale. What are your main goals in your training courses?
I want to help my clients maximize their opportunities by showing them a different way of looking at the business. There’s a video called Stuck on an Escalator, that shows people on an escalator that stops moving suddenly and they can’t figure out the obvious solution to their problem– even though it’s staring them in the face. There are so many obvious ways for dealers to increase business that they’re just not using.
Here’s an example. I just did a call with a dealership. I asked the GM how many floor-ups he’ll get today, and he said 15-20 max. Then I asked him how many customer pay repair orders he’s likely to write, and he said about 80. So with 20 ups coming in and 80 customer pay repair orders, most of the action is in service. And yet, when I asked him how many of his salespeople are working service, trying to convert service customers back to sales, he said really none. And where are his salespeople? They’re all standing outside, waiting by the door. So the salespeople are not going where the customers are. And if you walk into a dealership anywhere in the US, that’s what you’ll see the overwhelming majority of the time.
Now when you think about this– salespeople standing outside, 1992-style– it doesn’t make any sense. Customers are all over the internet these days and they’re all over the phones. Every statistic you’ll ever see says that the average consumer shops fewer than two dealerships in person. But even though we know this, and we know we have to improve our ability to convert– to find customers where they’re at and get them into the showroom– we still have salespeople standing by the front door, where customers are not. To my mind, these salespeople might as well be standing outside Blockbuster Video. People aren’t just coming in like they once were.
Another place customers are that dealerships don’t pay enough attention to: social media. People wake up in the morning and check Facebook, they’re on Instagram, they’re on YouTube and LinkedIn. That’s where you want to be, is all over social media. But if you ask salespeople if they use social media to market themselves, only 20-30% of them do. They might use it to post pictures of their food or check in at the gym, but in terms of marketing themselves to all their friends and relatives that own cars, they don’t do that.
Another area with so much opportunity is any dealership’s sold customer base, which can number in the tens of thousands. Most dealerships simply play lip service to working their existing customers, but they go neglected, and what do we try to do? We try to figure out how to bring in strangers by buying bad leads from third-party lead providers. We’re stuck on the escalator.
I’m trying to get people to stop standing on that escalator and go where the best customers are.
What are the biggest mistakes you see in phone calls and other types of lead follow-up and nurture?
The biggest problem is really a lack of training– and that lack of training is due to most managers not knowing how to train. They know how to talk, and to educate, maybe, but they don’t really know how to train.
In fact, most of the issues that dealerships have in 2017 are based on the fact that we have managers that don’t really know how to manage and we have training that isn’t necessarily training. So here’s what happens: our people are terrible at handling inbound sales calls, and instead of solving that with training, a lot of dealers go to the BDC model of non-sales people. Basically, they hire a second group of people to do what the first group should be doing– and could be doing because they’re just standing around, as we mentioned– but they aren’t because we didn’t train them properly. And the funny thing about it is, we don’t train the BDC either. It’s like the captain of the Titanic having a do-over the next day and hitting the same freaking iceberg. We didn’t train our salespeople, so we put in a different process, and then we don’t train those people either. So that’s a problem.
Today’s high BDC and salesperson turnover can also usually be attributed to a lack of training. When dealerships recruit salespeople, they say you can do anything you want in the car business, the sky’s the limit, you can be what you want to be. But after we tell this good story, we don’t train people how to actually make a living.
Too often in the car business, training is saying to someone: “Hey, go see what Lou’s doing out there, he’s been here for three years, he’s experienced.” But nobody trained Lou either. So we have the untrained “training” the untrained. When we don’t train our people, they don’t make any money, and then they get scared and then they quit.
Here’s the truth– I got lucky. The reason I became successful in the car business is because I ended up at a dealership that did a great job of training me, so I immediately started making money, and I gained confidence and momentum. But if I had ended up at a different dealership that didn’t train me, I could have ended up like so many other people in the car business, good people, who work for the wrong managers, don’t make any money, and then quit. And then a few years later you meet those people at a party and you tell them what you do for a living and they say, “oh yeah, I tried selling cars a while back, and it sucked. I hated it.” Well, it doesn’t suck. Selling cars is amazing. Being in the automotive industry is amazing. But most of the people who are successful in the automotive industry got lucky and ended up working for the right dealership. I firmly believe– and I’ve heard this said often– people don’t quit dealerships, they quit managers.
You said that we educate, but don’t train. What’s the difference?
I’ll give you an example. Do you play any sports?
I used to play basketball in high school.
So watching basketball on TV, is that what makes you a good player?
That method definitely did not work for me.
We could watch the NBA finals and we could understand what’s going on, and we could talk about basketball, but that doesn’t mean we can actually play. How do basketball teams train? They practice, they simulate, they go to training camp every year. I guarantee you that Kevin Durant and Stephen Curry, who just won the NBA championship, are going to be at training camp. These guys practice five, six days a week. It’s a constant.
In the car business, we don’t necessarily simulate, and we don’t hold our people accountable. For training to be effective, you have to have three things: education, simulation, and accountability.
But the best we ever do is educate. So we go to a seminar somewhere in a hotel where we listen to somebody talk for eight hours, and we call that training. That’s no more training than watching basketball on TV is training for basketball. You have to have all three of those things.
The problem is that most managers don’t know how to do it. They were good salespeople and good closers. They know how to work a desk. But they don’t necessarily know how to manage activity, and they don’t know how to train. And that’s where we approach things from. So when dealers call us with requests for phone training for sales and BDC, we find that usually, what they really need is management training.
So the idea is to train from the top so that the process goes more smoothly with everyone.
Yes, but a lot of dealers don’t think that way. They say their salespeople need training. They don’t realize you can’t do that without first training the manager.
It’s like training everyone on the football team except the head coach. The head coach needs to know the playbook, they need to hold their people accountable. It’s not just the players who show up at training camp, everybody shows up. What you really need is a management that’s top-down.
You talk in your articles about dealership staff working together as a team. What are some of the danger zones where teamwork can break down?
The biggest problem area is terrible communication between the BDC and sales. Too often, the BDC and sales teams work as two independent units. And they fight each other.
You can have a BDC that brings customers in the door, then the customer tells the salesperson what they were told by the BDC and the salesperson says, “oh that’s just the girl that works in the BDC, she doesn’t know what she’s talking about.” And now you’re off on the wrong foot.
That’s where I see the worst communication breakdowns. The BDC and sales departments have to work as a cohesive team. Everybody needs to be on the same page. If a dealership has a BDC, the sales departments needs to know exactly what the BDC is telling customers.
Where can technology help dealerships with productivity, team management, or lead management?
Aside from post-it notes, the greatest technology of all? Any technology you use should help you, should make your job easier, not complicate your life. It should replace something else that you’re doing that’s cumbersome.
So for example, I love video email technology, I don’t understand how everybody isn’t using that.
Video is a much better way to communicate than writing a letter. The way we communicate is so heavily based on facial expressions and voice inflection, and yet dealers still communicate via written email where they could use video. (CoVideo)
But anything that makes it easier and more effective to communicate is useful.
What are some of your plans for the coming year– sessions or projects you’re working on?
I’m working on my non-automotive platform, called FirePhone. It’s a training program for any company with salespeople. Stay tuned!
Thank you for your time and expertise! Best of luck!
We are thrilled to share Alan’s insights for dealership productivity, effectiveness, and growth. Tweet your questions and suggestions @autoleadstar and don’t forget to check out Alan’s website: http://proactivetrainingsolutions.com/