The Pros and Cons of a BDC

Industry

The goal of the Business Development Center (BDC) is to develop sales and service business for the dealership. However, dealers often find themselves asking the question, “Is setting up a BDC a prudent investment or a misuse of time and resources?” Surprisingly, the right answer is, “It depends.”

“We have a 21st Century connection to the consumer these days and, in some dealerships, the sales process just does not jive with that customer connection,” says Internet/BDC/Digital Marketing Trainer David Kain, former COO at FordDirect and now President of KainAutomotive.com. “And this disconnect is the calamity facing many dealerships today.”

Offsetting that disconnect, a well-run BDC can:

  • Improve engagement and relationship building with phone ups and other leads and raise appointment conversion rates for sales and service
  • Deliver more consistent and persistent follow up, increase be-backs, recapture declined service customers, and drive retention
  • Eliminate or reduce missed calls, hang ups, and other mishaps, especially during periods of high call and floor traffic volumes

On the downside, poor BDC execution—in staffing, equipment, training, and/or compensation—is likely to work against the dealership.

Kain observes, “The idea behind the BDC is it can be a wonderful stopgap measure but too often creates the exact-same issue that ill-equipped, poorly trained, and unmotivated salespeople do—a poor first-time connection with the prospect.”

Making BDCs useful and profitable might seem easy, but experience says it is not. Some dealers dismantle theirs because performance doesn’t justify cost. Others outsource the process.

Outsourcing is a valid option. Vendors specializing in providing BDC services are more adept at sourcing talent comfortable with and skilled at engaging people by phone, whether in inbound or outbound connections.

Where the BDC model still shines bright at the dealership is in the service department. BDC groups designed to set service appointments save service staff from disruptive calls that are too often mishandled, dropped, or placed on indefinite “hold.” The appointment setting experience often dings customer satisfaction and retention and can drive business to independent operators, so addressing that problem is crucial.

The BDC should also reach out to declined service customers. Pursuing declined service customers:

  • Reconnects them to the dealership and reinforces goodwill
  • Enhances retention
  • Educates the dealer on why those services were declined: Did the customer do them elsewhere? Or did the customer not have an adequate budget to do them at the time presented?

While dealers continue to struggle with the BDC process, trends point to a future where a better alternative exists. Many industry experts are betting that the best solution will be found in offering self-service via the dealership website where car shopping, trade evaluation, financing, F&I product purchases, and final deal paperwork will be done solely by the customer at their convenience.

To learn more about the pros and cons of a dealership BDC, download The BDC Puzzle whitepaper.

Recent Posts
Comments
  • Michael White
    Reply

    In many cases, dealerships set up “BDCs” at the behest of the manufacturer. I use the term “BDC” loosely because I’ve seen dealers where one person who has another primary role is the “BDC.” They are hastily thrown together and activity is not necessarily tracked. The dealer is simply “checking the box.” Smaller dealers may not have or want to put forth the financial and educational requirements to have an effective BDC. The manufacturer can tie bonus money to each program or pet project it wants to push for the time being, however if the cost outweighs the benefit from the dealer’s standpoint, these types of dealers won’t participate. It would be too much of a disruption to their current process that wouldn’t yield a desirable outcome.

Leave a Comment