Where a BDC falls short

If you are reading this right now, you are either curious, have the intention of creating a BDC or legitimately wondering how you’re going to fix your current BDC.

It is important to note that regardless of the phase your BDC is in, you’re not alone in your current situation.

I have been building and restructuring BDC’s for years now and have seen a commonality over the years with why BDC’s fall short.

If you have a sense that you current BDC is failing or not functioning as you would desire, I strongly recommend that you keep reading as I have been in your current situation before.

The very definition of failing brings about a negative social stigma instead of it being a positive learning experience. 

BDC’s fall short based on the lack of long-term vision while often opting for a quick short-term actual result. 

The purpose of this article is to clearly identify and outline the main areas that can cause your BDC to not be performing to its full capacity.

The core purpose of a BDC is to drive consistent sales and service traffic for the dealership.

It’s important to understand that a BDC should never be idle and should actually be in a constant state of evolution.

The relationship between BDC management and other stakeholders among other elements will play a significant role in the success and sustainability of the business unit.

It is crucial for the BDC managers and team leaders to be inspired and motivated. For BDC’s to thrive, the vitality of the BDC must be supported by executive management/ownership.

I have had the luxury over the last 17 years to have built and/or reorganized BDC’s for Canada’s largest automobile dealers and dealer groups. Albeit the early years of the BDC, I have over the years witnessed multiple reasons why BDC’s fail.

The main global reasons BDC’s fall short are:

  • Executive management not behind it
  • Friction between departments
  • Not accurately defined
  • Poorly managed BDC

Executive management support

I have never felt that this aspect of the failure of a BDC was deliberate. Often, the dealer principal is not the initial architect of the BDC.

We must remember that the BDC concept is still in its infancy. It is currently supported by outdated metrics and targets and in most cases, outsourced to third party companies due to a lack of understanding of what the core purpose is.

Unfortunately, I have also witnessed a lack of desire from those directly involved to understand its purpose and the absence of immediate bottom-line results.  

More times than not this lack of desire will have a negative stigma towards this long-term business solution.

The strongest BDC’s, time and time again, have the backing and unconditional support of the highest levels of management.

The BDC, like any other business unit in the dealer, should be treated as such.

Back in the early days when the sales process was not clearly defined, the thought of dissolving the sales department was not a consideration.

Yet, a trial and error approach was adopted day in and day out until the dealer found its footing.

Still to this day, sales departments worldwide fall short of monthly targets and yet, the same approach to stay the course and improve processes by investing by means of professional coaching, mystery shoppers, trainers, and process-oriented outfits are taken.

Ideally, hiring a well-seasoned and highly experienced BDC manager whether at the inception or in the stages of a re-organization of a BDC, will eliminate the need for executive management to exert extensive commitment to learning the nuances and complexity that this department requires.

A long-term commitment coupled with an all-in approach is critical to its success. The fear of failure cements itself when a BDC loses its way and becomes something it is not.

Just like the earlier years of the service and sales departments, it takes time for a dealership to find its ideal structure.

Trial and error through the use of granular reporting, daily meetings and inter-departmental communication is vital to the long-term success of this business unit.

The sales department revenue differs from the way the accounting department or service department generates revenue, yet they are all held in high regard.

Regardless of the depth of galvanization, the BDC should have a seat at the table and be implicated in all relevant department meetings. The BDC should be treated subsequently as any other revenue-generating department. Beautiful things start to happen when the climate is right, and the seeds start to bloom.

The biggest risk is that of not taking one to begin with.

 “Failure is the opportunity to begin again more intelligently”

– Henry Ford

Friction between departments

 Friction occurs when the polarity gap between business units widens. Often, either the sales manager or the BDC manager are both “pulling” in opposite directions.

Again, a large percentage of the time, this only occurs through a lack of understanding and communication. This will absolutely occur at some point in the relationship.

Finding the line of symmetry is important for clarity and accountability.

Similarly, to a symphony conductor, the dealer principle should be engaged and navigate the interactions until a harmonious working relationship is established. We are all professionals and therefore must act accordingly. 

Daily, weekly and monthly regular scheduled meetings should take place. Preferably daily but in the hectic ecosystem of a dealership, a minimum requirement of twice a week should be adopted. 

It is essential that the stakeholders of all departments invigorate a business-oriented and data-driven relationship in order to maximize the desired results.

Like any other business unit, the inclusion of the BDC should strongly be adopted at all levels of management depending on the level of the BDC’s involvement. 

Be it in service, sales, and marketing, the monthly objectives should be discussed within the first days of the month.

These strategic meetings will become more and more efficient and effective as the relationship and understanding of global objectives becomes clearer.

Similarly, to any sports team, revisiting last month’s performance (game) will keep from ending in a bad quarter. As I was conditioned to believe, you can have a bad day, but it doesn’t mean you have to have a bad month.

I have experienced ecosystems whereas friction existed but not at the demise of each department head questioning each other’s ability to execute.

Bad months do happen in this business but it’s the cultural and relationship strength that will dictate the efficiency moving forward. Such as two magnets opposing each other when pressed one way, when both sides concede and meet eye to eye, they could now form one unit connected by an invisible magnetic energy.

Once this becomes a reality in which I have seen, great things occur. 

BDC: Not accurately defined

As the core purpose of the BDC is to provide a consistent flow of traffic to the sales and service departments, the framework should be established between the dealer principle and the BDC manager at its onset.

The ultimate level of BDC involvement will be determined by upper management. Having a clear definition will avoid it from becoming all things.

The more focused the BDC is, the better it will be at executing its reason for being. There are several different scenarios but let’s break it down into the two main ones.

If just starting out and building a BDC from scratch, the selection of your BDC manager will ultimately influence the set-up, professional demeanor, the climate of growth and set the pace for which a return on investment can be attained.

The operational efficiency of the BDC will be more prevalent depending on the proficiencies of the BDC manager in relation to the culture that is set in place.

In my experience, the temptation of selecting a BDC manager based on a candidate’s previous experience as a sales manager should be avoided.

Now, I am not saying that he or she is not experienced enough to manage this department, but the understanding should be that a BDC is not a sales department.

I have seen in certain situations where this was successfully achieved because the mindset of the candidate displayed signs indicating this understanding of the difference.

If your BDC is currently going through a restructuring and there is no BDC manager for one reason or another, I would recommend a credible third-party agency to help guide the executive management and conduct a BDC audit.

Albeit not ideal, as the more present BDC management is the more personalized the results will be, it is not uncommon nowadays for BDC’s to be outsourced.

Clearly many elements come into play as many dealerships do not have the budget to adequately staff a BDC.

However, despite the current operational setup, rebuilding your BDC in phases will prove to be more beneficial. Slow is fast and incremental growth is the key to longevity.

Regardless of the phase, be it a startup or a restructured BDC, there are unavoidable prerequisites to be considered and implemented before the journey can be continued again.

Here is a quick checklist to consider:

New BDC

  • BDC business case
  • Documented process flow charts
  • Scripts for each campaign or touchpoint
  • Performance-based pay-plans
  • Clear performance metrics
  • Daily, weekly and monthly reporting
  • Integrated CRM with DMS (if possible)

Restructured BDC

  • Revised scripting
  • Revised hours of operations
  • BDC staff performance audit
  • Enhanced reporting
  • Recondition CRM formatting (XML/ADF)
  • Inter department relationships

Poorly managed BDC

Like any other business unit, the BDC can fall short of proper management.

There are many reasons for this ranging from a lack of understanding, inadequate team building, poor hiring process and simply put, the wrong person.

Staffing levels also play a large part in the decline of revenue. 

Understaffed BDC’s are overwhelmed and the result of this is that a proper guest experience whether at service or sales cannot be executed.

When agents and/or managers are overwhelmed, high turnover occurs. If the BDC is experiencing heavy churn, this is a red flag that something is terribly wrong with one of the major elements in the framework also mentioned in the previous section.

High turnover also results in a decline in revenue due to operational costs incurred for training.

Overstaffed BDC’s suffer from the following; complacency, agent activity is low (under 85 activities a day), department KPI’s cannot be achieved and again, high turnover begins to occur. 

The number of BDC agents required to run the department will be dependent on the dealer call volume, lead generation and overall customer campaign contact that is required for the BDC to be self-sustaining.

Additional staffing should only occur when activity levels start to be impacted. The BDC is significantly impacted by having the right people in terms of skills and attitude.

Again, one thing is for certain, whether just starting up or restructuring a BDC, the department organizational structure should be tight and allow for scalability.

Should there only be one agent or on the other hand a considerable-sized ecosystem, the level of management and supervision will reflect this reality. Regardless, the emphasis on reporting and direction should occur at an executive level in tandem with the BDC director. 

Final Words

To sum it all up a BDC is a journey. They can’t just exist… It doesn’t have an end and should be in a constant state of evolution as well as always strive towards ongoing objectives.

Capitalizing on the small wins and incrementally turning them into a solidified process, much of the BDC is about trial and error.

Building on these wins establishes the framework while accepting the frustrations and turning them into revenue-generating opportunities.

Dealerships must find a way for fear to be absent from the negotiation with our decision-making process. 

Teamwork and a sense of belonging are all that a BDC manager strives for.

Having a seat at the table, adding value and feeling sincerely included as any other department manager would only catapult a BDC manager’s motivation.

I can clearly remember when I would get the “head nod” from my superior.

It would invigorate me with positive energy to feel and know that they believed in the BDC and more so in me and my knowledge and skills.

If any of the main points have resonated with you, know that these are very common and normal pain points to be going through. It is far from over and completely repairable. 

Interjecting the possibility that provides a pathway to legitimacy is simply getting people to work together for a greater cause.

The BDC is an extension of all departments and its bandwidth and support is the key.

As I continue this journey, I learn every day. Your mindset should be like that of a parachute, it works better when it is open.

I will continue to inspire and raise those around me. Waking up every day and heading to work in the service of my people is the one true thing.

Did you enjoy reading this post by Shawn?

Shawn Armorer is a Car Dealership BDC black belt. When he agreed to share his experience and stories with us here at Autobahn Academy, we were hyped. Want more of Shawn? Give him a follow on LinkedIn, where he’s sharing his best insight on a weekly basis.

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