In the rapidly changing automotive industry, the importance of the Business Development Center (BDC) is more pronounced than ever. A well-implemented BDC is a powerful tool that enhances conversion rates, elevates the customer experience, and significantly boosts ROI. For dealerships aiming to thrive in the post-COVID landscape, developing a robust BDC strategy is crucial. It not only helps in navigating the myriad challenges of the modern market, but also in maximizing the potential for sustained growth and cultivating long-term customer loyalty.
The Automotive Industry: Current State and Challenges
The automotive industry has faced significant challenges since COVID-19 due to many factors, including supply chain issues, microchip availability, limited inventory availability, and limited parts availability. Key factors impacting the current state of the industry are:
- Drop in Repair Orders: The pandemic led to a notable decrease in repair orders, dropping by 13%.
- Aging Vehicle Fleet: The average age of cars on the road is now 12.6 years, up from pre-pandemic levels.
- Units in Operation: There has been a decline in the number of units in operation, affecting repair orders and overall industry trends.
While revenue per repair order has increased due to the aging vehicle fleet needing more work, the overall number of new customers has not bounced back at the needed rate. With an effective BDC strategy, dealerships can address this revenue killer.
Strategies for Dealerships
To stay ahead, dealerships should implement proactive strategies and monitor key indicators in their BDCs:
- Daily Measurement: BDC activities should be measured daily. Quick response times to inbound leads (within a minute) are crucial, with an average conversion rate goal of 80% for live calls.
- Backup your BDC: No one should go to voice mail in today’s omni channel environment for those for peak times and after hours are key in customer convenience and excellence.
- Outbound Efforts: A good BDC should aim for 200 -280 outbound calls for service a day per agent. Effective communication and quality customer interaction are key to converting conversations into appointments.
- Technological Integration: Using technology to provide detailed information to customers, such as reward dollars from OEMs and convenient service options like pickup and delivery, can significantly enhance conversion rates.
- Follow-Up Campaigns: Using BDCs to run effective follow-up campaigns to re-engage customers.
- Outsourcing: Deciding which activities can be outsourced to a remote BDC to maintain efficiency and focus on core operations.
Other Factors to Consider
Measuring Loyalty
Retention is critical for dealerships. If a dealership can retain customers for service, they have a higher chance of retaining them for sales as well. Offering “aggressive conveniences” like pickup and delivery, loyalty rewards, and subscription services can drive customer loyalty.
Customer Satisfaction Solutions
New Customer Satisfaction Index (CSI) products are crucial for dealerships. High CSI scores can lead to better perks and marketing dollars from manufacturers. These scores measure how happy customers are and can include factors like timeliness and service quality. Coaching staff to improve CSI scores is essential for long-term success.
Future Outlook
The future of BDCs in the automotive industry looks promising, with increasing reliance on technology and outsourcing to handle the high volume of activities. Advancements in technology will continue to shape BDC operations and customer interactions. Dealerships that embrace these changes will be better positioned to meet customer needs and stay competitive.
The evolution of BDCs highlights their importance as a profit center in today’s automotive industry. By understanding the role of BDCs, addressing current challenges, and implementing proactive strategies, dealerships can enhance customer satisfaction, drive loyalty, and achieve measurable success. As the industry continues to evolve, BDCs will remain a critical component of effective dealership operations.
Bob Gower is the Chief Operating Officer at Traver Connect, a BDC company that makes the impossible possible using decades of expertise in the space. He can be reached at Bgower@traverconnect.com.
