How to Manage a Service BDC - Part 1
By Ted Ings, Executive Director
While the conversation surrounding the Service Business Development Center (BDC) is often about whether or not your dealership needs one, this conversation is about how to manage, develop and execute a Service BDC.
Outlining what the core principals are and how the Service BDC can have a positive impact on your dealer's bottom line. Knowing that the trends - in today's auto market - is that the front-end gross profit margins are shrinking. Noting that fixed-ops absorb as much as 75% of the dealer's costs.
That said, a Service BDC can increase that absorption rate by increasing customer pay traffic. Here are the best practices to consider when implementing a Service BDC.
Who Manages the Service BDC?
Each dealer you ask will most likely give you a different answer as to who manages their Service BDC team. And or what their Service BDC team does for the dealership. Where you will get an answer from two people answering the phone, to two or three people answering chat leads and setting appointments for the service advisors.
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Whatever the plan is - for your service department - it has to be a solid, documented, plan that makes sense allowing your dealer to plan for smart growth. Knowing that your dealer not having a solid plan in place - or paying two managers - to manage the BDC teams can be costing your dealership.
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The best practice - to secure a profit - is to have one BDC Manager that manages business development. Business development lends itself to both sales and service. Where the BDC Manager (for service and sales) manages that co-existing relationship between sales and service. Building value on each side of the business.
Where dealers often go wrong, however, is their BDC managers are often tasked with several responsibilities that do not have to do with business development.
That said, it is imperative to have a job description and plan of action in place for your Service BDC team. Understanding what the team will cost to operate, and how many customers paying RO’s they need to bring to the table to make it worthwhile.
For example, if you want to add one to two additional BDC reps, it is best to understand what they will be contributing. That is phone calls, emails, texts, and chat messages to name a few things. Knowing that if they contribute to that level of activity what is a realistic expectation regarding ROI? Namely, based on their increased activity - as their job is not to replace the advisors - how much additional revenue can they realistically bring to the table.
If you find that the ROI is not as much as you had hoped and or the cost of conquesting to bring in the additional service revenue is more than you want to spend than it might not be best to bring on the additional Service BDC until a reasonable plan is in place.
OEM Service Retention: The Core Function of the Service BDC
To get the best results and ROI for your dealership, it is best first to review your OEM’s retention policy. That is noting how many more customers you need to bring into the service lane annually. In addition to understanding what a realistic ROI is on the customer pay RO’s. Making sure that the campaign or marketing strategy is cost-effective. In many cases, the OEM has customer retention marketing lists available for the dealer to use.
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One of the most effective campaigns to do with an OEM retention campaign is a mailer. Wherein, for those customers who no longer live at the said address, can then be removed from your list, which can increase your retention numbers. However, your BDC team will have to monitor the returned mail closely.
As for calling the customers - if you have their phone number - the goal is to get them into the service lane. The offer, though, does not have to be a free oil change, either. Knowing that “free” does not always mean a good thing.
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So instead of offering a “free” service, you should offer a complementary diagnostic test.
With the goal of selling services to the customer in need. As a customer might be more inclined to come in for a complementary diagnostic test as there could be issues they have been avoiding or not taken the time to have it looked at.