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A case study for smaller market dealerships – Can a BDC work for you?

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We've had a lot of discussions lately with dealerships in smaller markets who are questioning whether or not it makes sense for them to have a BDC. Certainly there are specific considerations that play into that decision, but in general we know that there is a strong opportunity for dealers in small markets to increase their sales and profits by taking advantage of a properly planned, sized, and trained BDC.

We recently started working with a dealership client in a smaller market area of approximately 20,000 households who wanted to set up a new BDC. The dealership sales had been stagnant for quite some time, and they needed to get things moving forward again and increase their sales effectiveness to avoid problems with their manufacturer. They wanted a BDC that would take care of their Internet leads, their inbound sales and service phone calls, and to work their various marketing lists.

In smaller market stores, it’s very important to have a BDC that is sized to meet the needs. This keeps expenses down, and insures an attractive ROI. Based on our opportunity calculations and the dealership’s open schedule, we determined they needed 2.5 people which allowed for a very small investment in infrastructure. In fact, we were able to utilize an existing open office with a small expenditure for chairs, one additional telephone, and two headsets. Total out of pocket for this BDC was less than $1,000.

We built the pay plans and job descriptions, and were able to find and hire the people using our AVA profile testing and basic BDC skills evaluation process. We put the new team members to work on memorizing phone scripts while the all new email and telephone response process including email templates and phone scripts (customized to reflect the dealership’s philosophy, marketing, customer base, competition and product among other things) was being installed. This was accomplished completely within the existing CRM setup, so there was no additional expense to the dealership.

It took about four weeks to get the BDC up and running. In their first full month of BDC operation the dealership moved up 2 places in their factory measured district rankings, and after six months of operation they moved up an additional 3 places to the highest share of their district they had ever had. They were able to accomplish this while also reducing their advertising budget by 18%.

In smaller markets it’s often impossible for dealers to generate significant increases in their traffic by spending more on advertising. For them, the only practical solution is to increase sales and market share by doing a better job with the traffic they’re already getting, and that is exactly what a BDC can do. In this particular example, this dealership ended up with a BDC return on investment that was far above what they expected, and they couldn’t be happier with their decision. The salespeople were slightly skeptical at first, but they are all very happy now with the increases they seeing in their own sales numbers.

So if you’re running a dealership in a smaller market, and you’re not sure you can justify having a BDC, you might be missing a big opportunity. BDCs don’t have to be expensive. They don’t have to be large. They don’t have to be a project. They only have to be effective, and when they’re done right at inception that’s almost always the case in a very short period of time. The dealers and managers who aren’t afraid to take a chance and try a BDC might be left holding the proverbial bag if one of their competitors does it first.