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I was watching the Washington Mutual commercial last night. The one where the WM guy is talking to all the other shark-type bankers caught in a roped-off circle, pushing hard the sales/money side of banking, etc. Then the WM guy tells them they are not today’s banker because they are just sharks, etc., etc. I know it works for WM as their list of clients has grown as a result of making everyone else in banking seem just like money-hungry vultures.
Our Internet performance I’m sure is being helped as I see more company-owned sales URL listings being pushed, such as My-real-apex.com or therealapex.com, etc. But for the most part, when people want Apex school, they Google Apex school and click the first one they see. They aren’t sitting at their TV sets with pen in hand waiting for some marketing expert to walk them through the most cost-effective way to reach his product. They really don’t much care about lead effectiveness.
So what are we left with? Well, maybe we are back again to one lead, many suitors. And if that’s what we’ve got, then all the lipstick on the pig isn’t going to change the fact that we need to get that one lead to appoint, show, and enroll at your school.
And that takes me back to how well we are training your customer relationship people. Are we spending an appropriate amount of dollars in finding and hiring the best receptionist, call center, admissions, financial services people we can? Or are we shopping for a bargain? Funny, yesterday I got a call from a recruiter I know looking for a financial aid director for a pretty large school. They were willing to pay upwards of 80-90K for the right person. I asked him what the financial aid advisers were making at the school. He told me he didn’t know. So I told him I would give him a referral, only after he found out. He called me back this morning and said, “It’s pretty good, they start them between 28K and 33K (this is a Southern California location).” Before I go on: let me add this. I called my cousin Todd in San Diego. He is the general sales manager at a large Toyota dealership in town. I asked him about sales compensation. He essentially told me the average for one of his sales people. Then I asked him about his F&I people. He then told me they (5 of them) earned an average of 170K last year and are on track to do pretty much the same this year. I asked him what would happen if he paid his finance people 28-33K a year. He was speechless (something that is rare of you knew Todd). He finally said after a brief pause, “The dealership would probably close down.” I asked him why, and he said, “Salespeople are like guides on the lot. They walk, talk and show cars. If they get someone back to the cube, they look for an offer, any offer. Then they take it to the sales managers who are there to get more, and at a greater net return (I guess he meant interest). From there, the salesperson is just a body in motion.” Once the number is agreed on, the real salespeople take over, the F&I people. Their job is to sell the add-ons, (which he told me generally have a 50-80% margin,) and get the CUSTOMER TO ACTUALLY SIGN A PROMISSORY NOTE AND VALIDATE THE SALE. He told me that until the contract is signed, all that’s going on is a whole lot of banter, conversation, and jockeying for position.
Well, back to the financial aid advisers. Aren’t they doing a lot of the same tasks the F&I people are doing? Yes, they are. And yet, we will pay an admissions person upwards 60K to take leads and get them to the advisor, but 1/2 to the advisor to complete the enrollment. And we are willing to pay a financial aid director 3x as much to manage these people. And for the most part, this director has little or no admissions experience. Actually, it’s been my experience that they are sometimes not as supportive of the customer relations/sales side of that job.
So, in closing, are dealerships that much smarter than all the collective knowledge of our senior leadership? Maybe.
If the lead you are giving to your admissions people is also going to be given to an additional 29 salespeople from other schools, or maybe another one from your own school, your guy/gal better know the value of a good first impression and how to have a conversation that leads to only one thing, an appointment that shows. And that takes talent, and well, you have to buy it first. I learned a long time ago from John Bennanti, “Dave, you can’t carve rotten wood!”
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7 Comments on "Invest in financial aid advisors to get more leads"
If we staff the FA department with sales people how do you address the regulatory issues? In larger schools this may be handled by a seperate regulatory department. Smaller mom and pop schools put the respopnsibility on the FA Department. My experience is that foxes are not good chiken coop guards. Do you train the sales out of them so they comply or do you have someone else monitor them? Or is there a balance between these two extremes?
Nate
Hi David!
Sorry we were not able to visit more at CCA. You were being mobbed by your seminar audience. Imagine that ! I thought you would be the perfect person to answer a question I have. Can you tell me what the average close rate (all lead types combined) for schools is now that we are all living predominately off internet leads?
Thanks!
Laura Goldhammer