The BDC Playbook
About 15 years ago Gus Camacho realized his business had to change how it converted leads to customers. Internet leads weren't being pounced on promptly, and his salespeople weren't able to produce showroom visits after fielding phone calls from potential buyers. The solution, Camacho found, was a business development center (BDC). A BDC's mission is to turn leads into physical visits to a dealership. Those who work in BDCs - often called business development representatives (BDRs) - handle inbound communication to the dealership via phone, text message, internet, etc., and initiate outbound communication to unsold leads and to past and present customers. Once the BDC has "sold" an appointment for a visit to the dealership, the salespeople take over and sell a car. IN the case of Camacho, who seems about 250 vehicles a month combined at his four Southern California locations, BDC appointments add up to about 50 percent of his company's sales. Lawson Owen, managing partner of Proactive Dealer Solutions, said a dealership's BDC represents much more than a physical part of the store or a team in the organization's operation. "A BDC is an organizational culture," Owen said, "where there is an increased awareness to fresh lead volume, lead conversion and a daily proactive initiative to ensure past customer retention." That awareness, experts across the industry say, can help even the smallest dealership.
Could you use a BDC?
Do you know how well your dealership handles leads? one way to find out is to "secret shop" the store. Enlist someone to pose as a lead and have him or her make inquiries of the dealership through the channels available to actual leads - via phone and your website, for example. NIADA retail 20 Group moderator and dealer consultant Justin Osburn recalled conducting a case study on how dealers handle inbound inquires. Of the 52 dealers in the study - all of them 20 Group members, among the industry's most motivated dealers - just five asked the lead for an appointment, and another handful of dealership employees either asked for the lead's name or gave his or her own name.
"Most dealerships don’t ask for contact information, and
they don’t ask for an appointment,” Osburn said. "So they fail miserably on the phone." DealerSocket director of product marketing Marylou Hastert recommended using a phone tracking
or call management system for inbound and outbound calls to evaluate a dealership’s staff.
“The independent dealer should track call volume, how many calls are being lost, dropped or missed entirely,” Hastert said. “Select a call-tracking solution that records inbound phone calls so you can listen to the phone- handling skills of your existing staff.”
Outboundcommunication, such as making cold calls to people in the store’s customer relationship management tool, are also part of the BDC’s job.
Osburn said the amount of the data in the CRM, more than the volume
of a dealership’s sales or the size of its staff, can help you determine if a BDC makes sense for your operation.
A mature dealership with, for example, 2,000 people in the CRM and a
sales process of making contact every 90 days
has considerably more sustainable activity for a BDC representative than a newer dealership with
a fraction of that many customer records, Osburn explained.
Hastert added there are other thresholds of activity that indicate a dealer might want to consider a BDC.
“If you are a dealership that is selling more than 50 units a month, has a service department or has a staffof more than five sales or service reps, then I would say opening a BDC should be a consideration,” she said.
Camacho, the CEO and president of Camacho Auto Sales, emphasized that setting up an effective BDC is difficult. He recommended hiring a trainer and continuing with training even after the BDC is established.
Hiring the right people to
work in a BDC can be a challenge. Osburn recommended conducting the first interview or two with a BDR candidate over the phone
– giving the hiring manager
some valuable insight about the candidate’s all-important phone skills.
“Don’t see them first,” Osburn said. “Hear them first.”
“A really good business development person, for the most part, they’re way different than your typical salesperson,” Camacho added. “Two different personalities.”
Part of the process of implementing a BDC includes making sure your existing sales staff understands the reasons for launching one.
“I have been in countless meetings where there was frustration and tension between the BDC and sales teams,” said Gretchen Huether, product manager for the Web Control CRM, produced by NIADA Bronze- level National Corporate Partner Dominion Dealer Solutions.
As difficult as establishing a BDC might be, the message to a dealership’s employees is simple, said Mark Vickery, senior director of performance management for Cox Automotive’s VinSolutions brand.
“All the BDC is, is a group of people executing a series of tasks that we’ve decided, ‘I have to do this on every Internet lead, exactly like this,’ ” Vickery said. “ ‘I have to do this on every phone call, exactly like this. I have to do this for every customer who comes in and doesn’t buy a car. I have to do this for all of these people. Every single time.’ ”
Enforcing the procedures and processes of a BDC falls to the general manager or supervisor of the BDC (often called a business development manager). Timely awareness of new leads arriving by phone, Internet or third- party sites such as Cars.com or Autotrader is vital.
As Camacho said, if you don’t pay attention to it, it won’t succeed.
“Mismanaged or improperly processed leads should have immediate managerial awareness and involvement,” Proactive’s Owen said.
Management should be aware of those leads and track them. Huether said two key performance indicators are in play for BDCs: lead- to-show ratio and show-to- close ratio.
Note that leads-to-sold ratio is not regarded as a performance indicator for a BDC.
“The goal of the BDC is to get appointments to show,” Huether said – not to sell cars.
For the lead-to-show ratio, Huether said, managers should track:
• Calls per effort.
• Appointments set. • Appointments
• Appointments that
The show-to-close ratio industrywide is about 25 percent. But if it’s less than that at a dealership, it’s not a BDC problem.
“You don’t want to get rid of the BDC because you’re not able to close
the appointments that show up,” Huether said. “The BDC did its job – but perhaps the communication between the BDC team and the sales team needs to improve to make sure the sales team delivers on the value proposition the BDC team has communicated.
“It might not be a BDC problem, but rather an internal communications problem.”
DAY-TO-DAY TASKS AllCall Automotive
Contact Center president Greg Wells said the priority of calling is posted on the wall above his company’s BDRs. It reads:
• Respond to fresh leads. • Call missed
• Confirm outstanding
• Follow up per the
established sales process (for example, making contact one, two, three and five days, and so on, after the lead appeared).
NIADA’s Osburn suggested a similar hierarchy of duties for a BDR, outlining the calls that must be made every day.
At the top of the list is answering live, incoming calls.
Next, in no particular order, calls must be made to:
• Unsold traffic from the day before. A BDR brings a different voice and a different approach than a salesperson’s follow- up, Osburn said. The BDR updates the lead’s response, which informs the representative when the prospect should be called again.
• Appointments missed from the day before.
• Confirm appointments scheduled for the current day.
• Follow up with people
who purchased the day before (or two or three days before).
Depending on the size of the dealership, those must- do calls might consume a couple of hours out of an eight-hour day, Osburn said.
The rest of the day is where some creativity comes into play.
A BDR will have different reasons for contacting different customers, depending on the time since last purchase, equity in the current vehicle, date of last service, etc. That allows
for flexibility in how the representative executes the outbound cold call.
For example, three months after a purchase, a customer could be called for a “How are you liking your car?” conversation. As part of that conversation, the BDR can suggest scheduling an oil change.
For many small dealerships, the daily “must-do” calls won’t consume anything close to a normal eight-hour working day. But that doesn’t mean they shouldn’t implement a BDC.
VinSolutions’ Vickery suggested an approach involving split duties.
Maybe a small dealership already has a receptionist handling inbound phone traffic. In between her current duties, that person could make the required daily outbound calls.
Or perhaps the F&I manager can take on a BDC function.
“We don’t have to go from zero to 60 in one move,” Vickery said.
Even the focus of a BDC representative can start small – with contacting unsold customers, for example.
“I can slowly layer in activities for the quote- unquote BDC to do,” Vickery explained. “I don’t have to do it all on Day One.”
“There is no specific model a dealer needs to adopt,” Owen agreed.
“Instead, dealers should build a customized solution that is right for their environment and objectives and goals.”
WHAT’S THE RETURN? As DealerSocket’s Hastert noted, the purpose of a BDC
is to make sure no business falls through the cracks and to follow up on opportunities a dealer might have thought were lost.
“Once a BDC is fully staffed and trained, management and ownersshould be seeing an increase in revenue 30-60-90 days out,”
she said. “If after 90 days of fully staffing and training a BDC you aren’t seeing any increase in revenue on either the sales or service side
of the business, there is a problem with the effectiveness and the team, and established processes should be reviewed.”
Owen said the return from a BDC can be noticeable quickly.
“A BDC can change the DNA of an organization,” he said. “I’ve seen small stores increase sales by 25 to 40 units in less than four months and some even double sales over time.”
Still, not everyone is convinced a BDC is right for all dealerships.
InterActive Financial Marketing Group founder and CEO Travis Weisleder said he’s seen many BDCs that aren’t effective.
Weisleder said he doesn’t like having BDRs responsible for both sales and service appointments instead of just focusing on one product. And he prefers the term “inside sales center” rather than “business development center” or “call center,” which he said don’t necessarily capture the professional polish, knowledge and phone acumen of the type of BDR he likes to see.
Weisleder, whose company is a Bronze-level NIADA NCP, said many dealers have a BDC because they think they need it.
“We see more BDCs fail than we do succeed,” he said. “Typically, it’s an excuse after an excuse after an excuse why they failed. It’s extremely eye-opening, because accountability is not there and management doesn’t care.”
Given the challenges of starting a BDC – or instilling a BDC “culture” – is it worth it, especially for a smaller dealer?
“There might be a lot of independent car dealers out there who would steer clear of a BDC conversation because in their
brain they’re putting too much behind what the words ‘business development center’ mean,” VinSolutions’ Vickery said. “ ‘That’s too big for me. Are you kidding? I’ve got four employees.’ ”
But, he added, whether it’s called a BDC or something else, “If you can’t follow a consistent process with your customers, there’s no possible way to expect enhanced results.”
The risk of not implementing such a consistent process is likely to have predictable results.
“If I don’t do it,” Vickery said, “the guy down the street probably is.”