To BDC or Not to BDC?

If you’re like many of the dealers I meet around the country these days, chances are good that the dramatic growth in internet shoppers has you thinking about a business development center (BDC). And with good reason: A BDC can help your store increase traffic and sales by effectively and consistently working with prospects to set — and keep — appointments. It can also be an expensive and disruptive proposition. Let’s take a look at what you’ll need for a successful BDC implementation, along with the alternatives you’ll want to consider to make the decision that’s right for your store.

BDCs emerged in the 1990s as dealers sought new ways to consistently manage customer interactions. By creating a distinct telemarketing department in the dealership and dedicating specially trained staff, they felt they could better respond to car shoppers’ telephone and email inquiries and encourage customers to take the next step toward a purchase. One automaker, for example, found that existing showroom processes were inadequate. A study it conducted revealed that:

  • 75 percent of prospects were not asked their names
  • 97 percent of sales associates did not set appointments
  • 98 percent of incoming call prospects who scheduled an appointment did not keep it

Unlike internet sales departments, BDCs today manage a wider range of customer interactions, including unsold showroom traffic, lease maturity, new model introductions and service reminders. They also work with owners nearing time for repurchase or help promote dealer events.

What Does a BDC Require?
Before moving forward with a BDC, review your existing processes and consider whether the improvements you want might be achieved in other ways. For example, deploying a CRM system helps to ensure consistent customer follow-up, while training classes help to boost your sales team’s phone and email skills.

If, however, you find that a more structured, formalized approach is necessary, you’ll then want to determine whether a BDC is a good fit. For a BDC to deliver the results you want, it must align with your store’s culture, processes, people, sales goals and available capital. (If you find a disconnect in any of these areas, you’ll want to consider the BDC alternatives we’ll discuss below. Moving ahead without consensus will likely result in an uphill battle with your sales and management teams, one that could delay, add unnecessary costs to or even derail your project.)

Still interested? We’ll now look at the “must-haves” you’ll need to put in place as you move forward with creating a BDC.

  • Budget. In addition to workspace and staff for the BDC itself, you’ll need to hire a department manager and purchase equipment from a CRM/lead management system to computers with high-speed internet access, call monitoring and automatic call distribution systems, telephones and toll-free numbers.
  • Commitment. Management must be willing to stick with the BDC for a minimum of one year.
  • Process (i.e., phone scripts and email templates). To ensure customers receive consistent responses and follow-up, associates will need phone scripts and email templates. At the same time, both should be easily customized so that the agent can answer the car buyer’s questions and address any concerns.
  • Communication. The BDC manager should attend your manager meetings, and BDC associates should be kept current on all incentives, promotions and events at your store.
  • Staffing and training. Beyond hiring managers with strong leadership skills and sales-driven, goal-oriented associates with excellent phone and email skills, you must offer training. Associates, especially, must understand your processes and products and know how to overcome objections (e.g., requests for a best price or trade-in value).
  • Pay plan. Compensation for the BDC manager and associates should reward results. The program should include a baseline salary and establish minimum performance requirements. It also should make provisions for additional incentives available based on appointments, sales, customer satisfaction and monthly promotions.

Establish Goals, Evaluate Success
As with any other department in your store, you can’t manage what you don’t measure. Metrics you’ll want to track include leads received versus appointments made, appointments made versus appointments kept, leads purchased versus leads sold and the performance of individual lead sources. Also be sure to monitor the number and percentage of sales the BDC generates, the average gross on BDC sales versus the showroom team, customer satisfaction and the number of calls and emails the BDC manages each day.

If you’re not getting the results you want or expected, it’s time to assess the situation and take corrective action. Questions you’ll want to ask include:

  • Is there really buy-in from all managers?
  • Do showroom and BDC processes align?
  • Are BDC associates consistently following processes and following up with prospects?
  • Is the pay plan motivating BDC associates to deliver results?
  • Are there too many or too few BDC associates?

Consider the Alternatives
A BDC is not a one-size-fits-all solution. If you determine that a BDC is not right for your store, there are other staffing scenarios to help improve internet sales processes. Instead of deploying a BDC, you might decide, for example, to:

  • Use existing sales associates to share phone and email duties.
  • Establish an internet department that uses dedicated sales associates to manage appointments and sales with internet-generated prospects.
  • Contract with an outsourced BDC services provider to manage customer interactions from its facilities.

As with a BDC, each of these options presents pros and cons that merit careful attention. Using your existing sales associates minimizes your upfront costs and is ideal for smaller stores, for example, but these people may not have good phone and email skills. Accountability also can be a concern, as individual follow-up proves difficult to track. Opting for an internet department, meanwhile, allows you to utilize your best-performing associates and works well with larger stores. Conflict may arise, however, if floor sales associates feel they’re being bypassed with the best leads.

Regardless of which route you take, the decision to BDC or not to BDC should be based on the business – not on industry trends or what your competitors are doing. Absent full buy-in from your management team and sales associates, the effort likely will not succeed and may create conflict that can disrupt operations and sour customer relations. If the route you want to take doesn’t meet with your store’s budget, goals and culture, your employees and, most importantly, car buyers won’t follow along.

Additional Resources
BDCs were the focus of Cars.com’s March DealerADvantage LIVE webinar. You can view a recording of the session or download a copy of the presentation. Registration for and more information about upcoming DealerADvantage LIVE webinars is available at Cars.com’s DealerCenter, where you also can access an archive of previous events.

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