Article

The Building Blocks of a Profitable BDC

December 2011, Auto Dealer Today - WebXclusive

by Greg Wells - Also by this author

Are you thinking of starting a business development center (BDC)? Maybe your current BDC needs to hit the restart button. On the other hand, maybe you are just looking for a couple of ideas to help a productive BDC get better. In any case, a profitable BDC begins with a foundation of people, processes and basic benchmark performance. Building your BDC on such solid ground will ensure a healthy ROI and incremental sales.

The first thing to determine when building a BDC is what exactly you want it to do. Certainly you’ll want it to handle Internet leads and phone ups, but that just plugs a hole, capturing sales that might otherwise be lost. The greatest ROI comes from creating incremental sales by calling back showroom visitors, prospecting, database mining and marketing. Do you want a service BDC as well? Like the sales side, the BDC can capture inbound calls for service appointments and follow up with and market to past customers, creating quality service traffic and increasing business.

Growth works best in phases. As clichéd as it is, the BDC is definitely a crawl-walk-run initiative. One proven strategy is to start with Internet, phone and sold follow-up. Once those processes are in place and performing, add unsold follow-up, prospecting and database marketing. Finally, for the third phase, bring in service department calls, inbound and outbound. Building your team as you go, this path will enable your BDC to be profitable and less vulnerable to market whims and challenges.

The foundation for any size BDC begins with the people, or more accurately, a person. No single decision in building your BDC is as important as choosing the right manager. Your BDC manager (BDM) needs to understand the showroom process, have a positive working relationship with the other managers in the dealership and possess great coaching abilities. I have found the best BDMs are usually car people, but there are some great BDMs who have come from other industries and adapted to the car business.

The BDC representatives, or appointment coordinators, need to be cheerful, customer-service-oriented people. It is a great practice to first interview candidates by phone, since talking on the phone is what they will be doing the most in their role as a BDC rep. Look for good communication skills, computer skills and a positive attitude. Avoid the breadwinner in a household; experience has shown these folks won’t be able to make the kind of money necessary to support their family and will turn over more often than employees who are not the primary source of income for a household.

Plan to pay your appointment-setters an hourly wage with bonuses for kept appointments and an additional bonus when an appointment results in a sale. Your BDM should get a base salary and an override on the production of the appointment-setters. Always work towards right-sizing the workload for your appointment-setters. A good BDC rep can usually manage 125 to 150 Internet leads plus phone ups.

A common mistake for dealers is to burden the BDM with multiple job titles. This is not a good idea. Running a BDC effectively requires a lot of attention to detail, multitasking and managing micro-processes daily. Distractions from these core responsibilities usually lead to poor performance in the BDC and therefore a poor ROI.

Other BDC personnel may include your digital marketing manager or e-commerce manager. Some dealers even have an in-house Webmaster or customer relations manager working from and with the BDC.

Process-wise, as mentioned earlier, start with phone, Internet and sold follow-up. Calculate the number of tasks you want completed daily per rep. Completion of 80 to 100 tasks per person is the high end of what you should expect. This is not telemarketing and speed-dialing. Appointment-setters need to be given time to personalize their responses. Integrate your processes with your CRM or ILM tools and staff accordingly.

You should expect to close 15 percent to 20 percent overall of your phone and Internet leads. A good target is to convert 25 percent to 35 percent of your leads to showroom visitors and maintain a 50- to 70-percent close rate on kept appointments. Sold follow-up should focus on satisfaction, concerns, due-bill fulfillment and the first service appointment.

The car business is performance-based. Measure everything and manage by the numbers. By keeping the individuals performing at benchmark levels, your BDC will perform at benchmark level too. Managing by the numbers means holding your team accountable for achieving the benchmark. Each of your team members may need help with different elements of their jobs. By measuring the process at each point, (lead volume, appointment conversion, kept appointments and close rates), you can take a focused training approach to the team members and experience great results.

These building blocks will set the stage for production. The BDC is a high-maintenance initiative, and building from a solid foundation improves your chance for success. If you need more information on staffing calculations, process and measurement, feel free to contact me. I am always happy to share.

Vol. 8, Issue 10 

Comment

  1. 1. Diane Anderson [ December 06, 2011 @ 02:08PM ]

    Great article! It arrived just after I "hit the send" button to let our decision-makers know that our lead count has increased by 62% this calendar year(without taking on any new outside lead providers) while our BDC staff has remained the same. With an awesome staff, processes that work, and support from the Sales Managers our closing ratio's have remained at a consistent 15%. Obviously, I am wearing multiple hats, and my staff"s workload needs to be "right-sized". My email was asking for additional staff -- forwarded your post to the decision makers! Couldn't have received at a better time :)

  2. 2. Mark Skiba [ December 26, 2013 @ 11:25AM ]

    From a statistical viewpoint, don't lump your phone leads with your internet leads. Internet leads always convert to appointments at a much lower percentage than phone leads. Keep separate statistics.

  3. 3. Emily Didio [ July 08, 2014 @ 03:48PM ]

    Great article.. Does anyone else see the issue with the comments. " Avoid the breadwinner in a household; experience has shown these folks won’t be able to make the kind of money necessary to support their family and will turn over more often than employees who are not the primary source of income for a household." This is very often the case and yet this department potentially handles every single customer and opportunity within a dealership... Maybe it's time to re-evaluate the "value" of a profitable BDC rep! While this article is 3 years old that statement often holds true today.

  4. 4. dawn [ October 08, 2014 @ 10:57AM ]

    can you contact me about proper staffing of a BDC?

  5. 5. Josh [ October 11, 2015 @ 11:15AM ]

    We use Vinsolutions at our dealership, and the processes are great, but some need to be changed or redrawn. What processes do you find work best?

  6. 6. Ashley H [ November 26, 2015 @ 06:14AM ]

    Can you contact me about beginning BDC in a used car dealership? I have been offered a position as the new BDM, and this isn't something we've ever tried before.

  7. 7. Maggie Medel [ January 09, 2016 @ 11:39AM ]

    how much should the pay rate be for BDC Manager . Out here in California

  8. 8. Linda Jordan [ April 13, 2016 @ 03:43AM ]

    I am the lead in a new bdc. I know the tasks to be done, but need organization/ideas on how get them completed daily. I have a group of 4 with customer calling in all day for service appts. Can you help?

  9. 9. S Collis [ April 28, 2016 @ 10:21PM ]

    I'm new in BDC, working with vin solutions, dealing with only inbound internet leads, the process needs to be revamped and I've been trying to figure something out but would love advise. This a whole new thing for our dealership and getting my lead doesn't seem to be the greatest at giving the best input, he just expects me to figure it out because he 'knows I can do it'

 

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