Does Your Dealership Need a BDC?
By Ted Ings, Executive Director
Business Development Centers are nothing new to the retail auto industry
The conversations, however, surrounding “what is BDC?” continue to evolve with new omnichannel opportunities. Conversations that aim to not just define what a BDC is but what it can do for the dealership as the customer - in today's market - expect a world-class experience starting with the initial phone call or lead inquiry.
So what is a BDC exactly?
BDC in its simplest form is “Business Development Center.” The purpose of this center is to build a business (increasing sales) by handling all incoming internet leads, inbound phone calls, chat messages, etc. All of which sounds logical. Interestingly, though, each dealership has its own meaning as to what “BDC” is and or does for the store. That said, while the purpose of the BDC is defined in so far as what the end-goal is - “selling more vehicles” - the means of hitting the goals, resources, training, or structure often does not fit within a dealers current setup.
Starting a BDC can also be daunting, timely, and costly which in many cases (for those who are not for it) pushes the BDC implementation to the back burner.
Meanwhile, the conversation remains relevant.
Whether you are starting a BDC tomorrow or are looking into what it can do for the dealership - here are some crucial steps to address before looking to implement a BDC center for your dealership:
Everything we do should have a “why” to it, and while it sounds simple there is a reason you want to add a BDC to your dealership, right? It could be as simple as your wanting to increase sales, conquest, or streamline the customer's experience. In turn, allowing the sales consultant to spend their time working with the customers building rapport and consistently working on equity mining!
For those reasons, it does make sense to add a BDC center to handle new incoming business - filtering through the leads - setting the appointment! Or what we like to call “setting the spike up” for the sales consultant.
However, for those that want a BDC because the sales consultants are not performing or do not want to confirm is not the right reason. Working in a BDC from this perspective will build resentment, turn-over, and a culture that affords the ability to complacent.
2. What BDC is Not Replacing
One of the common misconceptions is that the BDC is somehow replacing the sales consultant, which is not the case at all. In fact, it is two different roles. The primary focus and job of BDC Agents are to manage new and incoming traffic. Setting the spike for the sales consultant to sell the vehicle.
Whereas, the sales consultant should be focusing their time and energy on unclosed deals (how often does your sales team follow-up with unsold customers?), and focus on developing business through equity mining, social media, and of course referrals! That alone should be keeping the sales consultant busy enough. If they are bogged down with new leads - spending their days filtering through the various sources - they are losing time. The time needed to close unsold customers who are in the market to purchase as the average customer goes to less than two stores before they decide to make a purchase. In addition to the fact that it could take as much as 12+ touches per customer to secure the appointment.
For example, if the sales consultant gets roughly 46 lot opportunities (a.k.a. "ups") for the month, and sells 22 (and I imagine they have more that were just never logged in the showroom), they have 24 opportunities to work with.
You add 75+ Internet leads, which takes 12+ touches to get the appointment, equity mining, and referrals it creates a workflow that is hard for anyone to handle. No matter how good you are!
3. Should Your BDC be Centralized? Where is the Hot Spot?
Once you have decided to invest in a department that will develop business for the dealership, it comes time to choose which location to house the department. There has been much conversation discussing the notion that it is a best practice that the BDC be centralized in one main location. This model can work. But for those with multiple OEM’s, it could also be best to have a BDC manager that is global and can travel between the store locations: as the BDC agent will then be made available to check inventory, work with the sales managers directly, and most importantly build a relationship with the sales consultant!
All too often if the BDC is centralized they do not have the same rapport or connection with the sales managers. It is also much more difficult to work with managers on pricing when you are a world away. That said, for those with centralized BDCs, it is crucial to ensure the BDC Manager can effectively manage, develop, and foster the relationships with the store's managers.
That said, for those dealers with multiple stores, the decision is the crucial - pivotal - decision of whether or not to centralize the BDC in one location or to have multiple BDC Agents spread across all locations. One of the best ways to approach this thought is to look at each store's weak-points outlining the areas of opportunity. Asking yourself which location needs the most work; also looking at the geographic location of the store - if the store you are wanting to add the BDC to has the highest level of foot traffic consistently than it could hinder or worse disrupt the sales with the foot traffic.
If you have a store (or an OEM franchise) that has less foot traffic and overall sales, it might be best for the time being to install the BDC in that location. Making sure, too, that the BDC has room to grow. Once you have determined the location for the BDC it is time to decide how many BDC agents to start with. In choosing that number one of things to consider is who is managing the BDC? If you have a strong - experienced - BDC Manager then it lends you the much-needed flexibility of hiring multiple people at once.
For those with less auto experience, it would be best to hire one to two agents at a time ensuring that you have set them up for success. Otherwise, you run the risk of turnover, which is just as costly.
4. BDC Expectations and Communication
It is imperative that before going live with a BDC that the owner(s) and GM’s get together to communicate the “why” factor. In addition to laying out expectations for each store given that each OEM should have different goals and objectives. Otherwise, what can happen is each GM will go to the BDC and expect different results. Another reason - if possible - decentralizing the BDC can offer better results. As each BDC works directly with that GM, BDC Manager, & Owner(s).
Namely, each OEM in the dealer group is a business under the “umbrella,” and the BDC Manager has to ensure that the teams focus is channeled correctly as one or two of the “OEM’s” usually carries the group in both sales and fixed-ops. If the focus is misplaced or mismanaged, then it can cause for dissension between the GM’s and Owners.
5. BDC Work Flow
The goal after all (in having a BDC) is to build the business with increased productivity through phone calls, emails, etc. That said, when developing the BDC it is crucial to ensure that the GM’s & BDC Manager understand the expectations when it comes to the way leads are managed. Everything from response time, first response, & follow-up. Otherwise (just like it is with sales consultants) each BDC Agent will have their own way of interpreting how they should respond to the lead. Creating a confusing experience for the customer.
6. CRM - Is it Designed for BDC?
A CRM is another (amongst several others) critical component in running a BDC. It is not just about dialing the phones. But rather, it is imperative that the CRM operates in a way that makes sense to your expectations. For example, is the CRM set-up with a work-flow that is for the BDC Agents? More often than not (from vast experiences) the CRM is set up for a sales consultant. Therefore, the scheduled phone calls, texts, and emails are not even in the BDC’s Agents name. Thus not showing up on their calendar. In essence, it lets solid opportunities fall through the cracks. All going unnoticed until it is month-end and everyone is scrambling around trying to find the hot lead. Even if the BDC does have a work-flow in their name it does not mean s/he has the wherewithal to ensure that the right leads (low hanging fruit) have been handled correctly. All the more reason to ensure that the BDC Manager is dialed in the CRM.
7. Dealership Phone Systems
Given that the BDC Agents will live on the phones it is important to make sure they have the right tools to do so. Something as simple as adding click-to-call (where the BDC Agent can click the number in the CRM connecting them to the customer) can save up to 1 minute per phone call. As they are not having to manually dial the customer, which in many cases the BDC Agent can misdial and think the number is invalid even - in some cases - making the lead inactive. Given that (with many CRMS for call tracking) it forces the user to click 15 buttons to make one call, which is 1,500 buttons total based on 100 calls! All of which takes time with the average dialing taking up to a minute!
Click-to-call can easily save up invaluable time of up to 2hrs + a day, which can be another 100 phone calls made a day to current leads, last months customers, or better yet equity mining! Yet, this is most often overlooked!
So, what is your BDC?
Once you have taken the time to outline the needs of the BDC within your dealerships, reviewed the CRM, defined a work-flow, and situated the phones, it might be time to start a BDC.
Remember, it is better to take the time to define the purpose of the BDC before implementing as it will be much more effective to tweak the BDC as it grows versus changing the entire infrastructure, which can cause for disinterest and disengagement from your GM’s and Sales Managers whose buy-in is crucial for the overall success of the BDC. And even if you decide not to implement a BDC you can still use and adopt the same core principals of the BDC, which can still help grow your business.