Back to BDC...what's changed?

[KYT0715]

Hi,

I took a 2-year hiatus from BDC and just got back into the industry. I am now at a 1-rooftop, smaller store (150-200 cars/mo) that kinda sorta had a few designated BDC persons, but honestly...not really. It's always been more of a referral/walk-in based, mildly "old school" store. I was hired to help re-establish the department and do what I can to grow it, with the tools I have (which let's say aren't exactly those of a 400+ car store or one with the bigger, better [insert CRM system, video/text/chat program, marketing and advertising, inventory] and a very tight budget. My hands are pretty tied). I'm in the Cincy region.

I am new here to Dealer Refresh and still relatively new in the auto industry, so trying to find updated BDC trends, conversion stats and pay plans (for BDC specialists and myself as a manager), but am not having luck finding newer information.

I'm using the following combined internet and phone industry averages, and I have a feeling these aren't as relevant anymore...

25% appointment created/leads (high goal of 35%)
60% appointment shows/scheduled (high goal of 75%)
50% sold/appointment shows (high goal of 65%)
11% sold/lead (high goal of 13%)

For a BDC specialist pay plan, it's $12/hour plus commission. For the commission I am considering a $5/$10 flat rate per appointment show/sold plus a smaller bonus at so many BDC solds (i.e. 25 cars, 40, etc); a more traditional $10/$20 show/sold; or lastly, a very small dollar amount given per appointment show and a small percentage of overall gross from the solds.

As for my pay plan, I'd like to present a base salary plus commission based on overall appointment shows and solds for the department like I was paid in the past, but I am starting to see manager pay plans based off of a percentage of the gross from the BDC solds, but not sure what would be appropriate for this size store.

Any helpful advice or direction to resources where I can go to find answers would be greatly appreciated!

 

[Stevie]

Welcome back to the business @KYT0715! In my opinion, as far as trends are concerned, throw out the "industry standard" or "industry average". You have to really take a look at your store, get a gauge on what you're currently doing now, and where you want to be. Also, think about the store as a total. If the store is averaging 200 sold a month, how many of those do you want to be Internet? (all 200 of them of course! But realistically, are you currently at 20% of those and want to shoot for 30%, 40%, 50%?) Take a look at where you are now and measure your growth each month as you implement different processes.

Before creating a pay plan, think of how you're going to structure your BDC. (Are they working the customer from start to finish? Are they answering the lead, setting appointments, and following up until the customer visits? etc.) I'd say one of the more common pay plans is an hourly rate plus commission on appointments shown and sold. I personally have never paid a BDC person on gross unless they're working the deal from start to finish. Do the math and see what fits best for you guys.

As far as manager pay plans, that typically depends on what you're going to be responsible for. Are you working deals? Are your team members working deals? If so, then get some of that gross! If your goal is for your team to set more appointments to equal more sold, then present a salary plus commission on appointments and solds.

A simple pay plan for yourself and your team is a great STARTING point. It's nice to know what everyone else is doing, but if everyone else is shit, then you're going to just be another turd in the toilet. Focus on a formula that's going to make you, your department, and your dealership more successful. Think outside the box, try new things, make changes along the way. Nothing is set in stone. You may come up with something majestic that no one else has done! Feel free to contact me any time if you have any questions as you're getting adjusted. Best of luck!!

 

[KYT0715]

Welcome back to the business @KYT0715! In my opinion, as far as trends are concerned, throw out the "industry standard" or "industry average". You have to really take a look at your store, get a gauge on what you're currently doing now, and where you want to be. Also, think about the store as a total. If the store is averaging 200 sold a month, how many of those do you want to be Internet? (all 200 of them of course! But realistically, are you currently at 20% of those and want to shoot for 30%, 40%, 50%?) Take a look at where you are now and measure your growth each month as you implement different processes.

Before creating a pay plan, think of how you're going to structure your BDC. (Are they working the customer from start to finish? Are they answering the lead, setting appointments, and following up until the customer visits? etc.) I'd say one of the more common pay plans is an hourly rate plus commission on appointments shown and sold. I personally have never paid a BDC person on gross unless they're working the deal from start to finish. Do the math and see what fits best for you guys.

As far as manager pay plans, that typically depends on what you're going to be responsible for. Are you working deals? Are your team members working deals? If so, then get some of that gross! If your goal is for your team to set more appointments to equal more sold, then present a salary plus commission on appointments and solds.

A simple pay plan for yourself and your team is a great STARTING point. It's nice to know what everyone else is doing, but if everyone else is shit, then you're going to just be another turd in the toilet. Focus on a formula that's going to make you, your department, and your dealership more successful. Think outside the box, try new things, make changes along the way. Nothing is set in stone. You may come up with something majestic that no one else has done! Feel free to contact me any time if you have any questions as you're getting adjusted. Best of luck!!

Hi Stevie! Thank you so much for taking the time to share with me! I like what you said - I shouldn't compare myself to the industry as a whole, I have to do what is best for us and what we want to accomplish here and measure my own growth as I go. I appreciate you helping me find some ground!

 

[Alex Snyder]

Welcome back to the business Courtney and glad to see you found DealerRefresh

This business does not change much when it comes to working with people. I saw a salesperson pay plan from the 1950s that absolutely still works today. Just throw in something about CSI and boom - 2019 ready

My point is that there are pay plan conversations on DealerRefresh that are old, but still worthy of today's attention.

To @Stevie's point, it is more about satiating your store's needs and capabilities. With that said, I am a proponent of paying people for the things they have direct control over. Bonuses based on sales are great for sales managers; not you. You're not the one desking all the deals, keeping customers in the box, or choosing the cars to stock. You are in charge of how well leads are responded to and incoming calls are converting those to appointments. You don't have much to do with how the car is sold, so I would argue you shouldn't be paid on sales. Unless you're the one negotiating with the customer on their trade you're not the one who DIRECTLY controls that aspect of the deal. Make sense?

I used to pay my BDC on volume & quality with these being the main points:

• How many outbound calls could they make
• How many Internet leads could get on the phone or communicating in an email
• How many appointments were scheduled
• How many appointments showed

If you're their boss, those are the things you should be paid on too.

 

[KYT0715]

Welcome back to the business Courtney and glad to see you found DealerRefresh

This business does not change much when it comes to working with people. I saw a salesperson pay plan from the 1950s that absolutely still works today. Just throw in something about CSI and boom - 2019 ready

My point is that there are pay plan conversations on DealerRefresh that are old, but still worthy of today's attention.

To @Stevie's point, it is more about satiating your store's needs and capabilities. With that said, I am a proponent of paying people for the things they have direct control over. Bonuses based on sales are great for sales managers; not you. You're not the one desking all the deals, keeping customers in the box, or choosing the cars to stock. You are in charge of how well leads are responded to and incoming calls are converting to appointments. You don't have much to do with how the car is sold, so I would argue you shouldn't be paid on sales. Unless you're the one negotiating with the customer on their trade you're not the one who DIRECTLY controls that aspect of the deal. Make sense?

I used to pay my BDC on volume & quality with these being the main points:

• How many outbound calls could they make
• How many Internet leads could get on the phone or communicating in an email
• How many appointments were scheduled
• How many appointments showed

If you're their boss, those are the things you should be paid on too.

dfdf

Welcome back to the business Courtney and glad to see you found DealerRefresh

This business does not change much when it comes to working with people. I saw a salesperson pay plan from the 1950s that absolutely still works today. Just throw in something about CSI and boom - 2019 ready

My point is that there are pay plan conversations on DealerRefresh that are old, but still worthy of today's attention.

To @Stevie's point, it is more about satiating your store's needs and capabilities. With that said, I am a proponent of paying people for the things they have direct control over. Bonuses based on sales are great for sales managers; not you. You're not the one desking all the deals, keeping customers in the box, or choosing the cars to stock. You are in charge of how well leads are responded to and incoming calls are converting to appointments. You don't have much to do with how the car is sold, so I would argue you shouldn't be paid on sales. Unless you're the one negotiating with the customer on their trade you're not the one who DIRECTLY controls that aspect of the deal. Make sense?

I used to pay my BDC on volume & quality with these being the main points:

• How many outbound calls could they make
• How many Internet leads could get on the phone or communicating in an email
• How many appointments were scheduled
• How many appointments showed

If you're their boss, those are the things you should be paid on too.

Hi Alex!

I do agree our BDC ought to be paid on the appointments shown rather than the solds due to lack of involvement and control in the actual sale. However, I struggle with a few of the sales managers (aka BDC naysayers) telling me they don't want to me pay BDC on appointments because they feel like that'll entice reps to make BS appointments for their sales team, but isn't that why I'm here to train and make sure they aren't? (This actually presents another topic I'm curious about - the whole "appointment quality over quantity/how far do you qualify" but that's for another day...)

Thank you for sharing!

 

[Alex Snyder]

I struggle with a few of the sales managers (aka BDC naysayers) telling me they don't want to me pay BDC on appointments because they feel like that'll entice reps to make BS appointments for their sales team, but isn't that why I'm here to train and make sure they aren't? (This actually presents another topic I'm curious about - the whole "appointment quality over quantity/how far do you qualify" but that's for another day...)

It all boils down to the amounts paid on each type of appointment. For example, you could pay a $5 bonus on appointments set and have that jump up to a $20 bonus when the appointment shows. Also, knowing that roughly 50% of appointments scheduled show up you can manage if BS appointments are being scheduled.

Many sales managers are quite happy sitting behind a desk waiting for salespeople to bring deals to them instead of being proactive in finding ways to make more money. If you can position things in a way that doesn't broach their desire to be a perpetual firefighter who has plenty of Facebook time, you'll be able to get anything you want. Also, sales managers want repetition; a routine. They want everyone to think they're very busy. Give them a reason to look busy. Make them part of your process. And always remember, that no matter what you do they are going to bitch about it.

On the flip side, there are some managers who train their salespeople during downtime. There are others who work on making the inventory "pop" online and off. And some will even visit the BDC or Internet department to hunt for more business. If you have one of those, you're very :thumbup:

 

[KYT0715]

It all boils down to the amounts paid on each type of appointment. For example, you could pay a $5 bonus on appointments set and have that jump up to a $20 bonus when the appointment shows. Also, knowing that roughly 50% of appointments scheduled show up you can manage if BS appointments are being scheduled.

Many sales managers are quite happy sitting behind a desk waiting for salespeople to bring deals to them instead of being proactive in finding ways to make more money. If you can position things in a way that doesn't broach their desire to be a perpetual firefighter who has plenty of Facebook time, you'll be able to get anything you want. Also, sales managers want repetition; a routine. They want everyone to think they're very busy. Give them a reason to look busy. Make them part of your process. And always remember, that no matter what you do they are going to bitch about it.

On the flip side, there are some managers who train their salespeople during downtime. There are others who work on making the inventory "pop" online and off. And some will even visit the BDC or Internet department to hunt for more business. If you have one of those, you're very :thumbup:

Alex, your reply made me laugh! It kinda reminds me of my relationship with my significant other he is always going to complain about something, I always have to make sure he feels needed and important, and I have to make anything I want seem like it was his idea! But in all seriousness, once again your advice is very helpful to me... I have plenty of work to do! Thank you for helping me wake up my BDC brain!

 

[AndreiSmith]

From what I've seen, many dealer groups are moving to huge centralized BDCs.

One example would be the Fletcher Jones dealer "Audi Fremont" near my store. Their BDC is located down in So-Cal and serves all of California, plus some other dealers (even one in Chicago I heard). In order to run a huge BDC like that you need to have incredible processes and tons of product knowledge across a multitude of brands.

In my market, I've seen competition arising around how early leads are being responded to. Over the last 7 years, I've watched as dealers respond to leads faster and earlier in the day, which seems to be a natural progression of the market. As such, we've had to adjust, bringing our people in earlier to stay competitive.

As far as pay goes, seems that all of the same arguments exist. I personally like a balanced pay plan that includes hourly, plus bonuses for appointment shown and sold.

I'm a big proponent of treating BDC reps as part of the sales floor and getting away from the old "girls upstairs" mentality.

As such, I am a fan of dealer-level BDCs that are included in sales meetings. I also suggest that BDC reps meet with the used car managers to stay on the same page on new inventory.