By
Duane Sprague
The
Business Development Center (BDC) or Customer Development
Center (CDC) is a growing trend in the franchise dealership
arena, and rightfully so. The BDC can cure many problems
and weaknesses in the areas of sales and marketing that
have gone unchecked for decades.
However, many
BDC's fail, or fall short of their original objectives. In this
article, we will look at the top ten reasons in my opinion a BDC
can fail, and how to avoid them.
Mistake #1:
The dealership tries to tackle too many objectives at one time.
Solution:
Make a written list of all the objectives you would like the BDC
to accomplish. Next, prioritize by numbering them from most important
to least important. These objectives may look something like this:
o Contact every be-back within 24 hours, and complete a telephone
survey as to where they are in the buying cycle, and what action
the dealership needs to take next
o Contact every lease customer 6 months prior to the lease expiration,
and follow-up with the appropriate information requested
o Contact every customer by mail at least quarterly with a sales/service
offer and brief newsletter
o Send a thank-you card to every new sale and service customer
within 24 hours of the transaction
o Survey every service customer withing 72 hours of the service
completion
o Mail service reminder notices to every customer two weeks prior
to the recommended service interval
o Conduct sales CSI telephone surveys to at least 30% of the new
sales monthly
o Send vehicle anniversary cards to every customer still owning
the vehicle purchased from you
o Conduct In The Market surveys quarterly, with a corresponding
hot leads database for timely and appropriate follow-up
o Contact every service customer within one-hour of their vehicle
being ready for pick-up
o Create weekly sales and service CSI reports
o Create daily sales follow-up action reports
o Create daily action reports for management action regarding
unsatisfied customers
o Create quarterly management reports on how the sales and service
processes, procedures and policies can be improved to better meet
the needs of customers
Now think
about the talent pool required to reach your objectives. Create
a job description for each new position to be filled, and outline
all the required skills the applicant must possess.
Outline how
much additional training will be required for the new hires and
the existing staff, when, on what topics, and by whom.
Next, map
out all the process changes, resources and technology that will
be required for the successful accomplishment of each objective.
Consider a physical location for this department to reside, and
don't forget about the office furnishings, computer and telecommunications
equipment required for each person.
Place a reasonable
time frame on when you would like to begin the process toward
each new objective, and when you would like to have it reached,
if in fact there is an end, as most processes are ongoing.
Write down
the measurable and objective benchmarks you will use to determine
your success at specific time frames along the way. But don't
abandon the project if the objectives are not met on time, as
it may be a sign of under staffing, under budgeting, lack of training,
or just unrealistic expectations.
This document
becomes your road map and business plan for the BDC. Start the
process over each year. Review your successes and failures, and
analyze the areas of strength and weakness within the department.
Remember, that unless the BDC is empowered to make decisions,
make changes, and create their own operating procedures and policies,
they will not be flexible enough to get the job done in a manner
that is timely and in tune with the needs of the customers.
Mistake #2:
The budget for setting up and maintaining the program is insufficient,
cutting short the proper systems, technology, training and people
necessary for success. Also, the budget is created by the Dealer
or GM, and not the BDC department head.
Why should
the BDC department head create the budget? Because if they are
the right person for the job, with the appropriate skills, talents
and background, they should know better than anybody what they
need to get the job done as you have specified in #1 above. Just
taking an arbitrary number as a comfortable budget is almost guaranteed
failure.
Solution:
If the objectives you have outlined will make you more profitable
and competitive, the results are measurable, and you have a clear
formula for determining your R.O.I. within a reasonable time frame,
then you should have no qualms about establishing a serious and
sustainable budget for the project.
Mistake #3:
The objectives, duties, responsibilities, decision making authority
and long-term benefits are not clear in everybody's minds. This
creates an eventual subterfuge, because some power, decision making
authority, and possibly budgetary funds are shifted from the sales
and service departments to the BDC. The power fiefdoms in sales
and service are legendary, and relinquishing some degree of control,
even to the benefit of the department and the dealership, can
be a battle.
Solution:
Create clear written job descriptions for each BDC position, and
describe in writing what areas they have total decision making
authority, and which areas they need buy-in from other department
heads. Caution: do not stranglehold the BDC by making them underlings,
errand boys and yes-men to the other departments. A proper BDC
will be staffed with dedicated, trained professionals who know
their job, and play a very important role in the growth and stability
of the customer base, the one-to one marketing communications,
and CSI.
Next, create
a communications process chart for each department, so that everyone
is clear as to their duties, realms of authority and responsibility.
I would also caution you from placing the BDC under the authority
or management of any one department. The BDC should act independently
and equally, under the management of the Dealer or GM.
Mistake #4: The non-BDC dealership staff does not share the same
vision, goals and enthusiasm about the BDC as does the dealer.
Solution:
Keep the other departments and employees appraised of the BDC
roles, successes, progress, results, etc. Inform them that customer
retention and satisfaction are not a side-line, but the primary
objective of the dealership, and the BDC is a conduit to make
it happen, track it, and improve it.
Mistake #5:
The staff naturally gravitates back to the path of least resistence/effort,
and stops participating and supporting the BDC and its objectives.
Solution:
Provide financial spiffs to everybody for the increased and measurable
results derived from the success of the BDC (i.e. improved CSI,
improved retention, market penetration, increased service R.O.'s,
increased referral business, etc.)
Mistake #6: The Dealer and/or staff expect too much, too fast.
When the over inflated expectations are not quickly met, the program
is abandoned.
Solution: Keep initial measurable expectations to a minimum for
the first 3-6 months, and focus on improving the processes, quality
and timeliness of contacts, and communication strategies.
Mistake #7: The cost of the consultants and their travel and lodging
for the initial staff training, and the update training is so
great, that the training is abandoned.
Solution:
Greg Pensky once said "no consultant is worth $3,000 per
day." He may be right. But remember, pay too much and you
risk wasting some money initially. Pay too little, and you risk
losing the entire program. It is not so important what you pay
per day in consulting or training fees, it far more important
to focus on what you are getting for what you pay. There is nothing
worse than getting inferior results and dissatisfaction from a
discount product or service. It is far more important to get a
good value, than to get the cheapest price.
Mistake #8: The BDC staff are given all sorts of additional duties
to perform, such as deliveries, errands, word processing for other
departments, chasing and policing sales people, etc. This diminishes
their ability to remain focused.
Solution:
Refer to solution #3.
Mistake #9:
The pay scale for the BDC positions are typically set so low,
that you can't hire the level of quality and expertise you need.
Telemarketing is difficult, repetitive work, and the vast majority
of people hate it. Creating and maintaining databases is a technical
field and requires some expertise. Marketing communications, market
research, and generating reports and recommendations requires
formal education in the field, preferably a B.A. or B.S., as well
as experience and technical know-how.
The people
running the BDC need a fair degree of expertise in computers and
software, basic trouble shooting skills, solid phone and communication
skills, analytical skills, good judgement, people skills, and
the like. And no, you can't train a monkey to do it. As the old
saying goes, "garbage in is garbage out." If you have
low paid, low skilled people with little motivation running a
BDC, what do you expect to get in return?
Solution:
Be willing to hire and pay in accordance to the results you want.
It is extremely rare that you find top-drawer talent at a bargain
basement price. As you well know, far more often than not, you
get what you pay for. And while your at it, stop with the relentless
penciling sales peoples pay plans. If their making six figures-great!
It means they are making a fortune for the dealership, and they
will stick around, and take good care of your customers, thus
increasing customer retention and CSI. One of the biggest complaints
from customers is the constant turn-over of sales and service
writers. People like stability, dependability, consistency and
predictability. Remember that. Turnover is expensive, time consuming,
and robs the customer of what they like in a business.
Mistake #10:
Internal politics, usually from the salespeople, strip the BDC
of their abilities to gather data, follow-up, and schedule appointments.
It starts with some salespeople refusing to complete up-tickets
or other forms. Then others won't let the BDC talk to "their
customers." Then they rally and won't allow the BDC take,
and T.O. phone-ups. And little by little, its back to business
as usual.
Solution:
Refer to solution #3, 4 and 5.
I recommend
that you start slow and small, with few expectations beyond gathering
and tracking CSI data on customers and prospects, completing short
media consumption surveys, sending thank-you and anniversary cards
to customers, and generating reports to indicate where you stand
in critical areas, and where you have room for improvement.
As time passes,
you will discover new information you want to collect, new reports
you want to generate, and new opportunities to pursue. Thus, your
systems and processes must remain flexible, simple, and of an
open architecture that will assimilate technology from different
sources.
New hardware
and software will become available that you will want to install
and use. Therefore, I recommend that you only use a PC with non-proprietary
software for your marketing, tracking and reporting. Open architecture
systems are cheaper to buy, cheaper to program, easier to use,
and far more flexible.
Garbage in
is garbage out. The most important element of a BDC can be clean,
accurate, timely data. Laziness and short cuts can pollute the
data, and distort the reports. This will lead to decisions and
marketing efforts that miss the mark.
Initiate small,
easy, simple steps in the beginning, and don't overstaff. Try
it with just one person for the first month. As you feel completely
comfortable with the first level of performance, turn up the volume
a notch, and continue to do so on an incremental basis until you
are running at full pace and maximum activity.
Start with
clear, written, measurable objectives. Create a written outline
of what your BDC will Establish a yardstick for measuring your
results, and make sure you understand the source of the data,
and keep it constant.
