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Dealership BDC Pay Plans

Discussion in 'CRM, ILM, Chat, Desking, Emails, Phone, SMS' started by Blake Arbogast, Jun 8, 2009.

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  1. Blake Arbogast

    Blake Arbogast
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    I'm starting a BDC and wondering how to pay my employees. Base salary + commission on appointments that show + commission on appointments that buy? Should I hire a company to come in and help? Open to any suggestions.
     
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  3. DrewAment

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    I always thought a good pay plan for a BDC rep was a small base salary (usually enough to cover fed/states minimum wage laws). Then a small dollar amount for a set appt, larger dollar amount for shown appt, and a larger dollar amount for a sold appt.

    I did set up one recently for a dealer group. Large BDC operation with a 12 store base - Based on the dealerships numbers - Each person is expected to answer/make 100 phone calls a day - 10% contact rate, with a 30% appt rate, and a 50% show rate, with a 25% sold rate. worked out like this for a 22 day work month (2200 calls made/taken):

    Salary @ $1300, $550 for appts made ($2.50 per), $550 for appts shown ($5.00 per), $1375 for sold appts ($50 per sold) - if the BDC rep made all their calls and followed the formula total comp would be $3775 - with the dealership selling 27.5 cars from them.

    Your math has to make sense for your market, leads, where they are getting the call lists from (are they also taking inbound leads?), and what they are expected to call.

    I am also toying with the idea of a separate BDC that calls on just "lost" customers (the ones the salespeople have given up on and are no longer following up). This BDC reps would be compensated at 50% of whatever the commission is on a vehicle. Sale would be given to a different salesperson at a half car count (spoon).

    Lots of ways to go, call me if you want to discuss.
     
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  4. Alex Snyder

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    Blake - you and I just discussed this over the phone, but here it is in type:

    We've been through a few different Internet/BDC department phases and are about to change things again - here are the last 2 we've done and I'll inform you of the next one after we've finished putting it together. I will not talk pay numbers publically.

    9 person BDC: Salary-tiered based on quarterly individual performance. The actual performance of the entire department was paid as a team to make sure customers who responded on someone's day off were answered and people weren't fighting against one another over which customer belongs to who. The bonus was divided into 2 categories: 1. Customers who worked with the BDC that didn't schedule an appointment and 2. Customers who bought that did schedule an appointment with the BDC. At the end of the month we named an "Employee of the Month" based on the individual who scheduled the most appointments that led to a purchase - that person received a nice monetary bonus.

    ----economy melt and staff reductions----

    4 person BDC based on the best of what was left from the prior BDC: no salary tiers. Same bonus structure, but with higher dollar amounts. Raised the Employee of the Month bonus.

    We are fortunate to have good people in place who are honest, so our team environment has been successful. We are going to try something a bit more individualized soon though.
     
  5. Blake Arbogast

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    Drew & Alex,
    Thanks for your input!
     
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  6. Steve Stauning

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    I know this is an ancient thread, but I thought I'd share the most successful (in terms of appointments shown and sold per 100 leads) pay plans for BDCs:

    First, you need to implement a 100% “at risk” Pay Plan for the BDC. This means you are no longer giving them a guaranteed base wage that ends up making the appointment spiffs meaningless. It also means that you are only going to pay on Real Appointment Shows. (Real Appointment Shows are appointments that arrive within 45 minutes of the scheduled appointment time.)

    However, to get the checks and balances you need (to keep the BDC from reconciling) and to pay fairly for the job the floor salespeople do when they close a Real BDC Appointment; you need to pay the floor teams as if this was a split deal. (Because, it is a split deal: one team member set the appointment and another one closed it. This is the epitome of a split deal!)

    Here’s what that sustainable pay plan for a Sales BDC looks like:

    1. Pay the BDC on APPOINTMENTS THAT SHOW; not on sold units and not hourly (though there is generally an hourly component to the BASE that a BDC agent will make). For most markets, a solid pay plan for an Appointment Coordinator (BDC agent) looks like this:

    a. $10-$12 to even $15/hour in base pay that is a DRAW AGAINST COMMISSIONS.

    b. $50 commission for every VALID appointment that shows.

    c. $100 volume bonus for every 10 VALID appointments that show.​

    2. Pay the floor salesperson that CLOSES a BDC appointment a REDUCED COMMISSION. (Generally, this is a half commission with a full or half mark toward their volume bonus.)

    This second point is hard for most sales managers to swallow. They like to argue something nonsensical like “My salesperson closed the deal; he did ALL THE WORK; so he deserves a full commission!”

    Repeat this out loud until it finally sinks in: “If the floor team did their job we wouldn’t need a BDC.”
     
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  7. derrickwoolfson

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    This is a bit progressive, but - that said - I have moved past the theory that the more I feed the coin machine the more I will get out of them. After all, the BDC mindset is not the average joe selling cars. The one that does not follow-up, and/or offer the same level of customer service on the phone. So, why then do I want to create a pay plan that incentives, and highlights only certain aspects of a multi-faceted job?

    Instead, I have paid an hourly rate of 12-15 an hour with bonuses that pertain to the stores success. Wherein, instead of breaking the commission down individually by show rate (which can be massaged), appt. set rate, or sold rate (which they do not have control over) I pay them on the overall BDC's success on show rate and set rate. Knowing and understanding that there are stronger ones in the group - who will add more to the team, which is why they get paid more an hour.

    This model has built unity, and driven success. Allowing the BDC to maximize their results. Last month's results were stellar. The set rate for the team was 40% on 538 Internet leads with a 68% show rate. The sold rate, however, was 43% not as strong. This model has been laughed at, fought (you know how the old school one trick ponies can get), but when they saw how successful the method was it inspired them to re-idealize the way we handle the sales force.

    So much time is wasted on arguing over what an appointment is worth. When in reality, it is about managing the leads. Getting results. That is what the purpose of the BDC is, no? I challenge you to entertain this concept?

    That and, ask yourself - how much time does your BDC rep spend calculating their commission during the work day? Let's say it is 10 minutes a day. That is 50 minutes a week, an hour can yield 30+ calls, no? The focus is not on how they can massage the plan. But on how they can get results.
     
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  8. Steve Stauning

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    The best saying in automotive is "Everyone works their pay plan"

    It's true of the floor and it's true of BDCs. Pay them as a group and you'll have stragglers living off the fruits of others. Top people resent the stragglers - they always do - and they'll eventually leave for greener pastures. The only way to keep this group happy is if they're all stragglers living off the dealership's marketing and getting paid when a lead arrives without an appointment and buys a car. (In this case, you don't need a BDC, just a computer answering and responding with the lowest price to every lead.)

    Simple has always proven to be better, and in the BDCs with simple pay plans and rules that are enforced, no one wastes any time calculating commissions. (Not sure where you've seen that, but I've never seen it.)

    The plan I detailed above is in use in dozens of dealerships and all of them are successful. The average BDC agent under this plan delivers more than 60 VALID shows each month on roughly 200 leads. Valid show is the key word here: Appointments that arrive within 45 minutes of the scheduled time. (Not the next day or 3 hours early - those are not appointments.)

    And, as to the point that it's a multi-faceted job, I will respectfully and strongly disagree. BDCs have ONE goal, just one: An appointment that shows. There's a reason successful dealers don't pay their teams for information or rapport: They know you cannot sell an empty seat. BDCs who treat their job as "multi-faceted" vomit information and build rapport so well that consumers don't need to show up - they just take that info to the next dealership and buy a car.
     

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