Automotive BDC Workshop; Advertising


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Automotive BDC Workshop; Advertising

  1. 1. BDC Fixed Operations Best Practices Assessment Getting Started: Did Your Research/Visit Other Dealers with Inbound/Outbound Service Processes? 43% Yes No 57% The majority of dealers did little or no research/dealer visits. Only one dealer visited non-automotive businesses (banks, other retail) before installing his BDC.
  2. 2. Service BDC Estimated Start-Up and Monthly Maintenance Costs 1 1 1 1 $6k $4k 1 1 1 $10k $6k $10k $12k 2 $15k $15k-$16k $25k $18k $50k $21k 1 1 $80k 1 $29k 1 1 2 As cited by the Dealer Principal/GM the estimated startup costs for the Service BDC indicate that the majority sampled added on to existing BDC installs. Monthly costs reflect a wider range in staffing and resources.
  3. 3. Funding of the BDC • There is no set rule when it comes to funding the operation. The majority of respondents spread the cost of the BDC over the New, used and service departments. One dealer has reduced his advertising budget to fund the BDC. One dealer adds a $35 pack to each car sold. It does appear that all the respondents are providing a base salary for BDC positions. In the past, dealers have experimented with commission only structures for both sales and service. Service BDC reps would be paid on appointments made, appointments kept, no-shows rescheduled and in some cases, a small bonus for email addresses captured. These structure are still in place, but as part of the bonus structure.
  4. 4. Funding of the BDC-ROI • Given the expense of the BDC, it would be natural that the return on the investment would be closely monitored. That is not necessarily the case. Four reporting dealers do not have a gauge to measure the success or failure of the BDC. • Several measure the success on more qualitative grounds such as increased reduced advertising expenditures; retail traffic and sales (mixing the sales and service BDC into an overall package). • There are however several dealers who look at their performance against industry metrics as well as dealers who track the service business generated by the BDC.
  5. 5. Funding of the BDC-ROI • There is a need for standardization in the area of ROI. It likely reflects on the dealer’s lack of research and preparation (in the planning and implementation phase) insomuch as the ROI metrics are glossed over.
  6. 6. How the Dealership Funds the BDC-Per Dealer/GM 19% 25% Spread Across Departments Evenly Fixed % Across All Depts. Per Dept. As Utilized Add To Vehicle Sold Invoice 6% 19% Reduce Ad Budget to Fund Monthy Assessment Across All Stores (Overhead) 6% 25% The Majority of Dealer Principals and GM’s report funding of the Service (and other BDC’s) by department or as overhead. Notable exceptions include adding $35 to the invoice of each vehicle and reducing the Advertising budget by $25,000 per month to fund the BDC.
  7. 7. How the Dealership Funds the BDC-Per BDC Manager 17% 23% Spread Across Departments Evenly Fixed % Across All Depts. Per Dept. As Utilized Add To Vehicle Sold Invoice 6% Reduce Ad Budget to Fund 24% Monthy Assessment Across All 6% Stores (Overhead) 24% Funding as reported by the BDM’s mirrors that reported by the Dealer Principal/GM indicating that the BDM’s are aware of at least the basic accountability of their department.
  8. 8. How the Dealership Funds the BDC-Per 8% Service Manager 23% Spread Across Departments Evenly Fixed % Across All Depts. 23% Per Dept. As Utilized 8% Reduce Ad Budget to Fund No Answer/Don't Know 38% Interestingly, Service Managers involvement in BDC funding appears to be limited. A fair percentage (23%) of SM’s do not know how their Service BDC is funded.
  9. 9. BDC Pay Plans 10% 10% 30% Hourly Hourly + Bonus Weekly + Bonus Monthly +Bonus 50% Over 50% of the dealerships report an hourly + bonus pay structure for BDC advisors. Of those reporting, 80% have not changed their original pay plan. Of those dealership where the pay plan was changed, the reason ranged from “overcompensation” to “more employee incentives” more $ to “retain” and more flexibility in the plan.
  10. 10. Leigh, the following two slides breakout the Jay Wolfe Acura individual pay plan included in the packet of additional templates and info. However, in reviewing it with the pay plan that is cited by the BDM, and the constant notations in the plan to “advisors” it’s not really clear if the pay plan that was included is for BD reps or Service advisors. I’ve included it in based on the thought that the plan provided by Wolfe was for BD reps. Regardless of who it is for, according to the BDM, the plan will be revised as the reps are seen as overcompensated. that info is included in the following slides…
  11. 11. BDC Pay Plans-Example Following is an example of a revised pay plan. it is based upon a combination of manufacturer (import) service CSI targets, dealer CSI targets resulting in both individual and advisor team incentives. (Based upon) C-P, Warranty and Internal individual advisor labor sales (after discounts) percentage on the (manufacturer scale) for Individual Overall Service average score for advisor pays as follows: Below national score 6.0% Equal or Above National Score 7.5% Equal or Above Standard (90.5) 10.0% Equal or Above 92.0% 11.0% Dealer Objective (95.0%) 12.0% Bonus paid on advisor team C-P ro Average (after discounts) 1.7 = $200.00 1.8 = $300.00 1.9 = $500.00
  12. 12. BDC Pay Plans-Example Example of a revised pay plan continued Bonus paid on highest number of returned surveys (minimum of 10 surveys returned required): $200.00 Precision Team Bonus (Annual) Achieved as a Group = $500.00 Sublet Sales pays as follows: 10% of the gross profit on individual sublet sales Important note: this dealership is currently considering an additional revision to the plan as it appears. In conjunction with the $1,500-2,000 monthly salary, it is felt that the staff is overcompensated.
  13. 13. What Benchmarks Determine Success? Improved CSI over 25% 24% prior score Compare Against National Avg. Successful Appointments Volume of 13% 13% Appointments Generate set % of Service volume 25% Success is defined by a combination of improved customer satisfaction and service department volume. The consideration of successful appointments (defined as showing up on time or successful rescheduling after a no-show) combined with improved CSI should be considered a top priority for overall measurement of success.
  14. 14. Measurement of Results 9% 9% Improved CSI Blue Oval Reports 9% 45% Phone Tracking Customer Surveys 9% Sales Unique Visitors 19% Improved CSI scores account for the largest measurement group. Individual dealerships have added additional criteria.
  15. 15. BDC Manager Accountability 28% 36% Customer Contact Day to Day Ops Reports Resolving Problems 18% 18% The BDC Manages (BDM’s) are primarily held accountable for customer contact and problem resolution. None of the BDM’s reported accountability for profitability of the department
  16. 16. Business Background of BDC Managers 10% Customer Care 10% Experience Specifically Non-Sales 40% Service 10% Phone & Computer Skills Only No Answer/Don't Know 30% It must be noted that the majority of Dealer Principals/GM’s did not answer this query, indicating a potential lack of involvement in the selection process. This may be due to GM turnover but this also indicates a lack of involvement in the review and measurement process. For those who did answer, a management background did not appear on most of the surveys. The BDC Manager is often hired based on perceived people skills and phone skills. Clearly this is perceived as a “secondary” position in many dealerships.
  17. 17. Dealer/GM‟s and the BDC • Personnel selection as done by the respondents points to the need for a better understanding of the complexities involved in the BDC process as a whole and to service specifically. For example, Most BDC reps have little or no ability to assuage customer issues, the majority of dealers require that the call be handed over to the service manager or assistant manager. Where authority is granted it is usually in the form of being able to authorize a free oil change.
  18. 18. Dealer/GM‟s and the BDC • Job descriptions for the BDC are fairly lax. They range from “good communication skills”, a desire to help people, computer skills, to looking for “young girls with dead- end jobs.” This translates to pay plans which are often close to minimum wage, with some bonuses based on appointments kept. Often “flexible hours” are a consideration. In a number of cases, prior experience is not necessary.
  19. 19. The BDC Manager • The overwhelming reason to expand the focus of the BDC to fixed operations was to fix problems with the service department resulting in customer complaints and dissatisfaction. Only one manager cited “getting more customers” as the primary reason. • Very little research was done prior to setting up the BDC. Only two dealers cited significant research and visits to other dealer to see their systems was evenly split. Only one dealership examined non automotive business BDC’s.
  20. 20. The BDC Manager • Previous experience as a BDC manager was evenly split however duties, responsibilities and accountability ascribed to the managers vary greatly between dealerships.
  21. 21. The BDC Manager • All of the BDC managers report a medium to high level of satisfaction with the process and feel that there are significant opportunities for continuous improvement. • While evaluation process vary from “none” to significant reviewing on a daily basis, the BDC managers point to improved CSI scores as proof positive that BDC is effective.
  22. 22. The BDC Manager • It should be noted however that there are still a number of disconnects when it comes to areas such as scheduling appointments, pay plans, follow-up on no- shows, mining the BDC for potential sales customers, up-selling, etc.
  23. 23. The Service Director/Manager Thoughts and Opinions on the Service BDC • The Service Managers cite good communication and people skills as important considerations for an effective BDC rep. Several cited that the rep must be “thick-skinned” in order to deal with unhappy customers and aggressive service advisors. • Two SM’s stated that the BDC rep “should be car knowledgeable”; a description which both the BDC Manager and Dealer/GM would disagree with.
  24. 24. The Service Director/Manager Thoughts and Opinions on the Service BDC • Job training responsibilities vary greatly by dealer. From joint training by the Service Manager and BDM to training by techs, advisors and the shop foreman. • It should be noted that the BDM’s (for the most part) report more standardized training, including the system providers, manufacturers and third party training.
  25. 25. The Service Director/Manager Thoughts and Opinions on the Service BDC • As a fair percentage of Service Managers are unclear as to how the BDC is funded, more interaction between SM, BDC and general dealership management appears to be necessary. • In many cases, SM’s understand that their department is responsible for contributing to the funding however, only a handful of respondents provided a a detailed breakout of the funding.
  26. 26. What Were the Determining Factors That Led to the Expansion of the BDC to Fixed Ops? • Primary Factors: • Low CSI Scores • Service Issues Secondary Factors • Need for Consistent Customer Contact • Problems with Inbound Calls
  27. 27. What Are Some of the Successes Experienced So Far? Perfect CSI Scores 8% 16% Better Scheduling 15% Warranty Follow-up Email Appointment 15% Scheduling More Service Profit 15% Improved Appointment 8% Show rate Improved Process 15% 8% Improved CSI Identified successes vary but have nonetheless been noted.
  28. 28. What Unexpected Benefits Did You Experience? In descending order based on number of responses • How quickly BDC personnel developed • Strong relationships/rapport between customers and BDC department • Revenue generation • Higher CSI • Production greater than expected • Personnel “always learning • Nothing
  29. 29. Have You Modified Your Processes Since the Original Implementation? 29% Yes No 71% The broad majority of dealerships have modified processes. Modifications, listed in order of ranked most changed to least changed: Changing scripting 4 Introducing customer to management2 Call missed appointments 2 Learn how to load shop 1 Streamline process 1 Reach customer sooner 1 Continuous improvement 1 Change mail templates 1 Change personnel 1
  30. 30. What Do You like About Your Current Process? • Easy/Flexible (Overall process) • Customer calls answered quickly • Personal and non-threatening • Measures and tracks trends • Gives more time to spend with the customer • Better customer communication The BDC Process has improved dealer/customer communications. 100% of the respondents reported that their customers were very or extremely satisfied with the process as it now exists in the dealership.
  31. 31. How Would You Rate Your Current Customer Service Process? 1-5 Rating 1 = Worst / 5 = Best • The majority of BDM’s rated the process as a “4” (8) – Three gave a “5” rating – Two gave a “3” rating – One gave a “2” rating – There were no “1” ratings When Dealer Principals were asked to rate their BDC in relation to Fixed Ops, the average score was a “3”. There is obviously a varied interpretation of “success” on the part of upper management and the BDC.
  32. 32. Staffing the BDC • Centers range from 3 individuals to 11. • Staffing is determined on volume. Only one dealership has staffed according to “manufacturer recommendations” • The majority of staffs are a combination of new hires and promoted/shifted employees
  33. 33. Staffing the BDC • For those employees hired from within, the majority came from sales, with administration, including cashiers, a fairly close second • Only three respondents cited the Service Department as the source of employees
  34. 34. Integration Issues 36% Yes No 64% While the majority of dealerships reported no integration issues, those that did cited lack of integration with the DMS. In answering what the manufacturer could do to help expedite the process, respondents had varied answers including: “Better lists from Ford” “Funding” “Manufacturers should release „fixed products‟” “More „best practices‟ from manufacturers”
  35. 35. Inbound Call Process The Handoff: Most of the Time Never BDC Service 1* 4* 5* 4* BDC Sales 2 3 7 3 BDC Customer 2 1 6 4 Relations BDC Management 2 2 10 1 *Number of answers per rating of 1-4
  36. 36. Inbound Phone Vs. Internet • The maximum number of Service-related Internet requests is minimal. While five respondents reported 2-3 per day, seven respondents reported 0. • In contrast, the BDC’s report anywhere from 25 to several hundred inbound calls per day. • Two BDC managers reported that they “did not track” in-bound calls. Tow managers reported “one” call per day. Although the Internet has come into its own as a research and sales channel, there is significant room for developing the Internet for Service related activities.
  37. 37. Service Appointments Thru BDC 9% 13% 100% 50% 52% 5% 13% 0% Don't Know 13% Slightly over half the Service BDC’s schedule all of the service appointments. The numbers drop off significantly as reported by the BDC Managers. In several cases it appears that the Service BDC has little or nothing to do with critical initial service customer contact.
  38. 38. Service Process Of the dealerships surveyed, SA’s and the BDC are assigned different responsibilities throughout the Service Process. Each dealership has a different combination of assignment given to the SA’s and the BDC. In some dealerships roles are interchangeable. In most, they are well-defined.
  39. 39. Service Process BDC Only Service Advisor Only BDC/SA Shared •Inbound service related telephone call •Customer and vehicle information verified DMS •First-time visitor file created •Captures Year, Make, Model •Captures mileage •Captures VIN •Creates service appointment •Captures manufacturer company/ recall information •Verifies if Extended Service Agreement is in force •Captures customer’s vehicle condition (complaint) •Confirms customer appointment •Creates pre-arrival package •Who greets customer upon arrival •Confirms customers primary needs
  40. 40. Service Process continued BDC Only Service Advisor Only BDC/SA Shared •Conducts vehicle walk-around with customer •Evaluates cost and alternative choices •Confirms repair completion time •Records customer signature •Follows-up on “No Show” appointments •Transfers order to dispatch •Scheduling of repair •Shop loading of repairs •Initiates a multi-point inspection •Obtains additional customer authorization for ANR •Reviews completed RO with customer prior to pick-up •Who collects invoice amount (note: primarily collected by cashier) •Who delivers vehicle back to customer (primarily porter)
  41. 41. Service Process continued BDC Only Service Advisor Only BDC/SA Shared •Schedules the next routine visit •Follows up and schedules follow-up visits caused by special order parts arrival •Who performs follow-up contact with customer concerning the customer experience •Who performs follow-up on unsold prospects
  42. 42. Service Process Review • Based on the information gathered, there are a number of areas, primarily in the initial customer contact, arrival and information gathering phase that can be given over completely to the BDC. • This would increase the efficiency of the SA’s relieving them of initial contact paperwork.
  43. 43. Service Process-Miscellaneous Do BDC reps have information available Do BDC reps have information available to regarding repair limitations due to know what type of appointments they can limited availability of shop equipment? make and for what date and time? 8% 38% Yes Yes No No 62% 92% 23% 23% Yes Yes No No 77% 77% Does the BDC make confirmation calls 24-48 Do BDC reps identify if the customer neeeds hours prior to the appointment? alternative transportation?
  44. 44. Recapture of “No-Shows” Call within: 2-3 hours 12 hours 24 hours No Process/Not Called Most dealerships follow-up no-shows within 24 hours. One BDC reports a 30% recapture rate on no-shows. Surprisingly several dealership still have no follow-up on no shows. This demonstrates a critical lack of focus on the BDC process and potential.
  45. 45. Development of Best Practices Summary • Based upon the analysis of the 15 participating dealers Several Best Practices have been identified. • Best Practices have been separated out by the following job titles: – BDC Manager* – Dealer Principal/GM – Service Director/Manager – Parts Manager – IT Manager* – Internet Manager* *there are instances where the some or all of these roles are fulfilled by the same individuals
  46. 46. BDC Manager Best Practices • Strong leadership with experience and responsibility • A well funded IT department with investment in the latest technologies – State-of-the-art phone system is a must – Cutting edge software
  47. 47. BDC Manager Best Practices • Recognition that this is a Service Department process and it should be treated as a separate entity • Invest in the right people who can create a BDC “culture” with a strong focus on process and training
  48. 48. BDC Manager Best Practices • There are a number of tactical Best Practices cited by BDC Managers as well, for example: • Use the BDC to its full capacity for generation of customer contact in the form of letters, emails, DM.
  49. 49. BDC Manager Best Practices • Collect email addresses via a sweepstakes entry card • Keeping customer updated on status of vehicle service via phone and or email
  50. 50. Dealer/GM Best Practices • A satisfaction card is completed by BDC rep and customer • GM meets with BDC manager daily • BDC manager reports directly to GM
  51. 51. Dealer/GM Best Practices • BDC rep delivers new vehicle to form relationship with customer • BDC positions are not just a job but a career path (note: one dealer cited “use BDC as entry level for hiring. Groom for other positions such as service advisor. Not necessarily the best course of action.) • For hiring BDC position use phone interview to test applicants phone skills
  52. 52. Dealer/GM Best Practices • Dealer has three convenient Ford service sites and routes customers to the most convenient • Schedules service recalls for Saturdays • Follow-up estimates on repairs to customers who opted not to leave their vehicles in the body shop
  53. 53. Service Manager BDC Best Practices • Management recognized the need to motivate BDC staff – Daily adjustments are the norm – Frequent adjustments responsible for successful launch • Service advisors and BDC meet twice monthly
  54. 54. Service Manager BDC Best Practices • Follow-up customers for 1-24 months • VINs not in for 6 months are tracked • BDR can resolve concerns for $50 and less • 10 day follow-up by Service Advisor
  55. 55. Service Manager BDC Best Practices • Radio station contest entry forms have email address line • Letter generated day after service • Service appointments confirmed by phone call • Daily communication between Service Advisor and BDR’s
  56. 56. Parts Manager Best Practices • Integration between BDC and Parts should be a paperless process • Parts Manager meets daily with BDC Manager regarding special orders • Recognition that Parts staff is sales motivated and BDC is there to bridge the gap between the customer and the Parts department • Continuous training of BDC staff in Parts BDC solicits fleet, body shops and other commercial entities
  57. 57. IT Manager Best Practices • Bulk email Service specials bi-weekly (Using data base for marketing) • Up-sell opportunities for BDC reps-Service bonuses including $2 per appointment, $5 for Saturday appointment • Follow-up on missed appointments (See BDC Manager) • Upgraded phone service to allow for immediate response. Calls routed to live person. No holds or Vmail. • Appointment requests sent online and confirmed by advisors upon request review
  58. 58. Internet Manager Best Practices • Loaner vehicles for “life” providing scheduled maintenances are done at dealer and take longer than one hour (not, not strictly BDC related) • Tires for life (see above) • No calls forwarded to Service Advisor-all handled by BDC • Bulk emailing of coupons
  59. 59. BDC Fixed Operations Survey Key Learnings: • There is a lack of sufficient prep work/research when instituting the BDC – In some cases it is done “on the cheap with minimum investment in systems and people – Need to arrive at optimum ROI – Need to develop tracking measurements to determine successful outcomes – Need to set goals for the department – Need hardware/software systems in place • Adequate computer, telephony and software systems (note: Most BDC Managers feel that the current equipment is satisfactory if not better. Initial integration problems have been overcome – Back-up systems a must
  60. 60. BDC Fixed Operations Survey Key Learnings: • Need for stronger, empowered management – Better training – Involvement in dealership executive decisions – Craft effective job descriptions – Hire qualified employees • Enhance empowerment to staff for successful customer issue resolution
  61. 61. BDC Fixed Operations Survey Key Learnings: – Knowledge to define training needs – Sufficient budget to supply train BDC reps – Fundamental understanding of the products and services offered – Manufacturer and dealership department training
  62. 62. BDC Fixed Operations Survey Key Learnings: • Need to separate Sales and Service BDC’s due to fundamental differences in desired outcome. – Sales process and inherent skills vs. customer relations, service issues and customer retention • Total integration with DMS is critical – Need to maintain up-to-date lists – Need to comply with federal do not call regulations
  63. 63. BDC Fixed Operations Survey Key Learnings: • There is a lack of cohesive marketing efforts – The fixed ops BDC has the ability to create and maintain effective direct marketing. • BDC management requires little or no training in marketing. – Results in the reliance on Service marketing and or turnkey marketing software.
  64. 64. BDC Fixed Operations Survey Conclusions • Clear, concise Fixed Ops BDC Best Practices are sorely needed for the dealerships with existing Fixed Ops BDC’s and those planning on implementing. • Dealers need to review available research along with the help of a capable consultant(s).
  65. 65. BDC Fixed Operations Survey Conclusions • Dealership needs a clear set of measurements and goals for the BDC – Facilities, technology, equipment and monthly services – Employee to volume/growth ratios – Cost per inbound call – Cost per inbound email – Outbound calling – Marketing – Employee training and retention
  66. 66. BDC Fixed Operations Survey Conclusions • Dealer needs to employ competent management with training in customer service – Develop optimum career path – Provide adequate compensation • Pay plans must be developed and or adjusted to attract competent management and retain competent employees
  67. 67. BDC Fixed Operations Survey Conclusions • Dealership needs to recognize potential profit that the BDC will contribute due to: – Increased customer retention (CSI) – New customer conquest (marketing) – Efficiencies gained in service scheduling – Efficiencies gained in no show rescheduling
  68. 68. BDC Fixed Operations Survey Conclusions • Improved training is needed – Updating on systems and skills – Cross training on Parts and Service – Consistency of training – Quality of training • Best Practices should include more responsibility for BDC – Free up Service Advisors for more efficiency – Create the career path
  69. 69. BDC Fixed Operations Survey Conclusions • BDC Management needs to integrate with all departments – Will lead to improvements in processes – Develop a synergy with other departments – Demystify the BDC and it’s processes for other departments – Lead to better overall customer service