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Five things you can do to turn your BDC into a profit center.

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Having a BDC has become a very hot topic for dealers and dealership executives over the past year. Many OEM’s are putting serious pressure on dealers to install them, and some are even tying financial incentives to dealership compliance with both having a BDC, and even the results they obtain.

Still, many dealers are resisting making the change to a BDC process in their stores. In many cases they view them only as an additional expense, with little or no real contribution to their sales or profitability. Dealers who have used BDC’s in the past often have a bad taste in their mouth form their earlier experiences, and they are understandably reticent to go down that road again.

In our work with dealerships that are creating or rebuilding a BDC, we’ve successfully implemented a few strategies to help overcome not only the perception of the BDC as an expense, but we are actually able to establish obtainable performance objectives that establish, without a doubt, the BDC as a profit center. Here’s a few of the most important ones:

1.     Hire the right people – When you’re staffing your BDC, you need to remember that a good BDC rep candidate is very much different from a good floor salesperson candidate. BDC reps are information providers; they don’t need negotiating or closing skills. In fact, we discourage reps in our client’s BDCs from discussing pricing beyond the basic “starting at” numbers – that’s the kind of thing that needs to be done in the dealership. We look for people who are service oriented, who have good organizational skills, and who are able to communicate well, both verbally and in writing. Lower turnover reduces hiring and training expense, and keeps the performance level of the BDC at a higher level where they are able to generate the most appointments.
 

2.     Use the best possible scripts – Some dealers are using scripts and templates in their BDC that were poorly written initially, or haven’t been updated in decades. Buyers today are so much different than they were even five years ago, let alone twenty, that using scripts and templates that don’t reflect the way buyers approach the process today is almost guaranteeing poor BDC results. You need to incorporate Internet strategies, email follow-up, text messaging and chat in your BDC scripts and email templates if you’re going to get real results.
 

3.     Make the right phone calls – We see very positive results from having well trained BDCs with good scripts taking inbound sales calls, but there are huge opportunities to be had from incorporating other call types into your BDC. Having your BDC make follow-up calls to unsold showroom visitors yields some of the best results in terms of adding plus business, especially in the used vehicle department. Doing this doesn’t have to replace any salesperson follow-up, if scripted and done well, it works great in conjunction with any follow-up that is being done by floor salespeople. BDC s should also be expected to complete a certain number of outbound, “marketing list” calls every week, and you should be using scripts created specifically for the different kinds of lists, such as off-lease, private offers, orphan owners, trade initiatives, etc.
 

4.     Have the right pay plan – BDC pay plans need to be structured so that the reps have a fair opportunity to earn a good living for what is really a fairly easy job. These aren’t people who should be working 55 hours in a week - staff and schedule for a forty hour a week position, and compensate accordingly. In today’s economy, the opportunity to earn $500 to $600 a week in a clean, professional environment is a very attractive position for the types of people you want in your BDC.
 

5.     Hire a team leader – Unless you’re putting together a BDC for a group of stores and need more than four reps, you probably don’t need a full-fledged BDC manager. Having one of your reps designated as a “team leader” who receives some additional compensation based on the department’s accomplishments gives you someone who can provide the kind of simple management that your BDC needs in order to function well, along with some basic coaching to help reps with any challenges they face with prospect interactions. Reports should come from your CRM, and should be verified by your outside training vendor, or someone in the business office.

This list certainly is not all inclusive. There are processes you can use to create a BDC profit and loss statement. There are other techniques that your reps should master that convert lost prospects back into showroom visitors. There are even strategies that some dealers use to measure their advertising effectiveness as a component of their advertising expense. No matter how you measure it, a good BDC can and SHOULD be a profit center for your dealership, and done right it absolutely can be!