BDC vs. Cradle to Grave – always sure to start a passionate debate amongst automotive professionals, and most likely to end with two parties that still do not agree. Why is that?
I believe part of the answer lies in why the BDC (business development center) became a solution for working Internet leads for many dealers across the country. As the Internet has completely changed the landscape of traditional auto sales, dealers have struggled to find the best way to turn online shoppers into showroom visitors to their dealership.
While historical sales tactics involved putting together an aggressive marketing plan using traditional media, and then sitting back and waiting for the shoppers to start showing up at the dealership lot, the digital era has changed that completely. The days of salesmen waiting for a multitude of “ups” to arrive has transitioned to a time where we find that showroom traffic has dwindled to a small fraction of what it used to be. Why? These shoppers were completing most of their decision making process online, to include deciding which dealership they would like to visit.
Aggressive dealers soon learned that having an active presence online, combined with a strong follow-up process for website leads using emails and phone calls worked well to turn online shoppers into showroom visits. Unfortunately, most dealers also found that there was a lot of resistance from both salesmen and sales managers to changing their approach on how to sell to the modern customer. The reality in the new digital market is that more work was involved for both the salesmen and sales managers, and a robust CRM tool that managed the necessary daily phone calls and emails was key to their success. Human behavior will most often choose the path of least resistance – and the least work, so these tasks were often left uncompleted.
Enter the BDC solution. If a dealer could not get their current workforce to complete the necessary work to turn a website lead into a showroom visit, why not hire a separate workforce dedicated to doing just that, and letting the showroom workforce focus on what it has always done? When most sales managers and salesmen were presented with this option, they were happy to learn that they could let someone else complete the additional work that they did not want to do, and let the BDC set the appointment. They could sit back and have the customers delivered to them. Whew! That sounds great, no need for change, business is back to normal.
Herein lie several problems. When you create a BDC with a separate workforce, there is a large additional expense for the dealership in question. And in an ever more competitive marketplace where the Internet is driving down gross profit margins with readily available pricing information, how does the dealership maintain strong profitability? If you ask many in the salesforce, their answer would be “not my problem”…
A dealership is not a charity. It is a business that provides a valuable service and product in a highly competitive market. If a BDC is setup, salesmen pay plans are typically adjusted and lowered to offset this cost. “Why that can’t be…” states the sales professional. However, if one wants to let someone do the difficult work of setting the appointment so that they can set back and be the order-taker, should one expect to be paid like a salesperson? Or be paid like an order-taker. These are certainly controversial words, but the inherent truth stands. The BDC creates an additional expense for the dealership that must be offset somewhere.
The BDC might solve the problem of completing the tasks to turn website leads into showroom visits that was not being completed by the sales force. However, one problem is often traded for another. Employee turnover with BDC’s is traditionally high, which is not unique to the automotive industry. Call centers are often challenged to identify and hire great people, and more so by retaining them. That means constant recruiting, training, and more expense involved with that.
What about the customer experience using the BDC? The modern day shopper is often contacting the dealership in their research phase when they have reached a point that they have detailed questions that are not being addressed online. When they communicate with the BDC, their experience is often driven by someone that has little product knowledge and is unable to answer many of their questions, outside of trying to set up that appointment.
Assuming that the BDC is successful at setting up the appointment, the hand-off then becomes another critical point in the selling process. The ABC’s of sales across all industries remain fundamentally the same. If I can get you to like me and trust me, you will buy from me. The BDC works to start this process, selling the appointment to the online shopper and building that initial level of trust. However, when the customer arrives at the dealership, they are handed off to a sales professional that they have not met, and the selling process must start off again from scratch. While dealers with BDC centers have worked to make this transition more smooth, it still puts another bump in the selling process.
I believe that the cradle to grave process is the best approach because it best serves the online customer’s needs. They deal with one sales professional from initial contact to completing the deal. This allows the consumer to deal with someone with the highest level of product knowledge while giving the sales rep the opportunity to build the relationship, build trust, build value into the product, and complete the sale that is satisfactory to the customer and the dealership.
Is it that easy? Of course not. It takes a lot of work and commitment by the dealership to set this up successfully. With well over 90% of car shoppers starting their car-buying process online, it is imperative that ALL sales managers and salesmen in a dealership are trained on how to work Internet leads. To allow new hires to decline to learn about how to work Internet opportunities is the greatest disservice a dealership can give to new talent. And to allow current sales managers and sales reps to continue to refuse to learn how to best work Internet leads is poor management by a dealership looking to compete in today’s market.
It starts with dealer principal support that mandates training for all personnel on how to best work Internet leads. This is followed by sales managers who hold their people accountable for completing the necessary tasks to turn website leads into showroom visits. And it means continued training throughout the year to make this work. Strong change requires strong leadership.
The reality in our industry is that you must pick and choose your battles. And for many, it is easier to address this issue with a BDC approach rather than take the more difficult, but better approach of cradle to grave. I find “cradle to grave” to be the best approach as it best serves the customer AND dealership. At the end of the day, our success is centralized around the customer, and giving them the best experience gives the dealership the best chance of success.
The modern day shopper is often contacting the dealership in their research phase when they have reached a point that they have detailed questions that are not being addressed online.