Article

Your BDC Pay Plan

To properly compensate your business development center, you must set expectations for your manager and agents and design a pay plan that will motivate and reward them.

June 2014, Auto Dealer Today - Feature

by Greg Wells

A typical BDC agent’s pay plan combines a competitive hourly wage with bonuses for set appointments and an additional bonus for sold customers. 
A typical BDC agent’s pay plan combines a competitive hourly wage with bonuses for set appointments and an additional bonus for sold customers. 
The proper pay plan can mean the difference between failure and success for your BDC. If you overpay, the return on investment won’t make sense to you. If you underpay, it won’t make sense to your agents or their manager. ROI aside, your BDC pay plan must inspire your team to perform. It should foster team chemistry and growth, and compensation should be based on merit.

So how exactly should you pay your BDC? It’s a simple question with no simple answer. Let’s start with your expectations and work backward from there.

For service BDC agents, the name of the game is volume. Some dealers create incentives based on dollars per RO; most pay a higher hourly wage in lieu of a bonus structure. 
For service BDC agents, the name of the game is volume. Some dealers create incentives based on dollars per RO; most pay a higher hourly wage in lieu of a bonus structure. 
Job Descriptions
If, like many dealers, you believe that an employee’s pay plan is defined by their job description, you are on the right track. So let’s nail down your expectations for your BDC agents and their manager.

The simplest job description for a BDC agent is “Create quality showroom and service-lane traffic with effective follow-up and daily appointment-setting practices.” There are two sides to this coin. BDC agents work with active prospects to set sales and service appointments, but they must also maintain existing relationships.

BDC agents are both hunters and farmers. If you’re in it for the long run — and I assume you are — the work your agents do to nurture and maintain your database and offer individualized service to your customers is just as important as answering the phone and writing quality responses to Internet customers.

With that in mind, let’s start by setting a reasonable hourly wage. If you’re in the Midwest, it could be $8 an hour; in northern New Jersey, $14 might be more reasonable. It varies that much. Bear in mind that the number you choose won’t be a secret for long, so be sensitive to your other hourly workers. A significant wage gap between them and your BDC agents can lead to conflict.

Next, when incentivizing your agents, don’t just wing it. Back into the right numbers by looking at your lead count and the quality of your leads. Apply your expected close rate to the opportunities and see what that does to the payroll.

A common practice is to pay BDC agents a bonus for a kept appointment and an additional bonus for a sold appointment. Fifteen dollars for a show and $10 for a sale is fairly common. This concept works pretty well, but there are two potential pitfalls:

1. You must track the leads carefully. Customers have been known to show up at the dealership after reading or listening to a particularly compelling email or voicemail. That’s a real skill, and agents should be recognized for it. In the first quarter, we found that about 15% of Internet traffic was represented by an “unappointed” show. But if the customer doesn’t mention the email or voicemail, and the person who greets them doesn’t ask, the agent is out of luck.

2. Agents may spend too much time tracking down information. They shouldn’t have to comb through records to look for deals they may have missed due to duplication or a spouse’s name being used in a transaction. The BDC manager should monitor CRM input. Look for ways to simplify tracking and reporting.

Remember the first line in the job description: “Create quality showroom traffic.” The close rate on unappointed shows is 42% — quality traffic indeed. If you factor this metric into your pay plan up front, it won’t be a point of contention in the future.

But bonus-based pay plans are not the only option. In our own call center, we stick to an hourly wage that’s aggressive for our market. There is no bonus structure. Instead, we frequently do spiffs on specific skills or results for a dealer client, typically for a short period of time.

One spiff our agents have fun with is a poker game. We put a three-card “river” on the big board. Agents earn cards by scoring high on phone calls or setting a certain number of appointments. At the end of the day, the agent with the best poker hand wins the prize, which could be a $25 gift card, lottery tickets or paid time off.

On the service side, focus on volume. Service BDC agents are typically paid a slightly higher hourly wage but earn fewer bonuses. Trying to track bonuses and spiffs for service can be a complex endeavor. I have seen dealers incentivize service BDC agents based on hours or dollars per repair order.

Pay Plans for Managers
Your BDC manager’s pay plan is simple: Set a base salary with an override on what the agents produce. Again, let’s back into the numbers. If your agents are hitting their benchmarks, your BDC manager’s overall pay should be competitive with sales managers or closers. The actual structure will vary from dealer to dealer, but a highly skilled BDC manager should be earning similar income to the people who supervise the sales team.

A popular way to pay BDC managers is a monthly base salary, somewhere in the $2,500 range, plus the same bonus as the agents —$15 for showroom visits and $10 for sold customers.

Personally, I like to put more emphasis on kept appointments, since that is their job description. The close rate on kept appointments is mostly out of the agent’s control, but they certainly influence the purchase. They can also hinder the purchase by giving bad information or setting unrealistic expectations.

If you can identify your lead volume and expected close rate, you will be able to work backwards into a fair pay plan. You also will have earned a healthy ROI and inspired your BDC team to set more appointments and act as good caretakers for your database.

Greg Wells is president of AllCall Automotive Contact Center. He is a 25-year industry veteran with nationally recognized expertise in BDCs and Internet sales.
[email protected]

Comment

  1. 1. Bill Colarusso [ November 18, 2014 @ 04:24PM ]

    Hi and thank you for this great article.
    Kindly email me with the typical or average results (Potential Contacts, Actual Contact Made, Number of Appointments, Number of the Appointments that actually Showed up for their Appointments, Number of Sales made to those Appointments (closing ratio?).
    Or, if you prefer to tell me the percentages for each of the above results that's fine.
    I'm under the impression we'll sell approximately 10% of those we initially contact or make contact with.
    Thank you.

  2. 2. Lexus [ December 18, 2014 @ 06:14PM ]

    How much do BDC's at acura carland in duluth georgia make an hour?

  3. 3. Amanda [ January 28, 2015 @ 08:40PM ]

    My work, at our dealerships BDC Department does 50-60% of our total traffic, we are also responsible for Serivce leads, and Parts leads. My have multiple lead generating services, and our pay structure is generous. I am paid $11/hr w/ 15 hours of over time most weeks at time and a half. $5 per appointment set & SHOWN in the showroom. $25 per sold vehicle. With bonus pay at 15 cars =$150 20 cars = $200 25=$375 30 cars = $600. I have received this kind of pay plan after 8 months of working at my dealership and often getting 25 cars or more. BDC Depts. are one of the strongest assets to a dealership, if ran correctly. Have a proposal? Send me an email. [email protected] I am willing to relocate.

  4. 4. Felicia Harris [ February 14, 2015 @ 05:16AM ]

    I run a different kind of BDC it's hands on for sales and service... The reps are actually trained to be an asset to our sales and service team by going through training to learn how to sale and be an advisor. I have reps that have moved on to be great service writers and sales associates and are 20 to 30 more effective because of their extensive training. They have a visual on the day to day operation. Please contact me if you are a BDC rep. looking to advance...

  5. 5. Jessica G. [ July 08, 2015 @ 03:21PM ]

    Started my dealerships BDC single handedly and interested in what other dealerships have to offer. Contact me.

  6. 6. Jenn [ October 01, 2015 @ 01:57PM ]

    I recently took over the BDC at my dealership. We have seen lots of different figures on what percentage of internet leads should turn into kept appointments. Is there a general percentage that we should be striving for? Also, what percentage of kept appointments should result in sold cars?

  7. 7. Cindy [ December 12, 2015 @ 01:08AM ]

    I have 10+ years of BDC sales manger. I have recently been offered a Bdc manager position just for service in nj. I'm wondering what my pay plan should be as well as my reps. Thanks

  8. 8. jeromey [ December 14, 2015 @ 03:32PM ]

    please contact me regarding vendors would love to hear more

  9. 9. Brian Sorto [ January 18, 2016 @ 03:19PM ]

    I am the only bdc at my location and i make around 4500 a month with an inventory of 120 cars. i think every bdc needs to be paid that because theyre bringing in business for the dealership. so eseentially they are the main assets of the dealership.

  10. 10. Brian Sorto [ January 18, 2016 @ 03:19PM ]

    I am the only bdc at my location and i make around 4500 a month with an inventory of 120 cars. i think every bdc needs to be paid that because theyre bringing in business for the dealership. so eseentially they are the main assets of the dealership.

  11. 11. Christa [ May 06, 2016 @ 11:30PM ]

    Hey Brian I am the only BDC in the department covering internet fufu showroom etc averaging over 150 calls a day and I don't get paid that my

  12. 12. Macia [ May 18, 2016 @ 03:29PM ]

    I started a BDC at my current location. I was asked to come on with the agreement that I would take a low hourly wage and in 3 months, once I proved successful, I would be paid what I am worth and the department would grow. I have been there for 6 months and I am lucky to make $400 a week! It is a lower volume store with fewer sales people and management is very slow when it comes to change. I need to be paid what I am worth. I am doing a whole departments work. How should I approach this, and any ideas on what I should be realistic for?

  13. 13. D'shawn [ June 03, 2016 @ 11:18AM ]

    I'm a BDC Agent at my dealership and they only pay us once the appointment that we set buys and we only get half of the commission which is usually a minimal $100 for a New vehicle and $50 for a used vehicle. No bonuses or incentives. How should I approach a solid pay plan for my GM to actually look at?

  14. 14. Doug [ July 21, 2016 @ 02:26PM ]

    I dont get paid if they come in asking for me even though I have been talking to them over a week or so . Not ever can make appointments these days.

  15. 15. Isabel [ August 12, 2016 @ 04:20AM ]

    I work in BDC service I have been there a year I get a salary new worker get hourly
    I get $2 per RO she gets $1 per RO
    So far so good
    Yesterday I found out she gets additional bonus our boss told me was a raise
    ( when I asked for base salary to be raised)
    He suggested this additional performance bass bonus would be considered my raise
    How is this a raise when new employee also qualifies for bonus??
    Not happy :(

  16. 16. Isabel [ August 12, 2016 @ 04:21AM ]

    Doug
    So not fair you need to talk to your manager or look for a job that will properly pay you . Good luck.

 

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