Your Daily Operations Magazine
Search Close Menu

Dealer Ops

Are BDCs for BHPH A-OK?

One look at the title to this article might make you think that I’ve been spending too much time staring into a bowl of Alpha-bits cereal. Let me reassure you that I prefer Trix or Lucky Charms, and secondly, this apparent hodgepodge of letters actually does have some significance. As a matter of fact, this topic is one that seems to keep recurring at the various 20 Group meetings we attend.

Let’s start by filling in the blanks. Can Business Development Centers (BDCs) for Buy Here Pay Here dealers (BHPH) be efficient, profitable, effective and productive (“A-OK”)? Next, we should clarify some of the associated terms to avoid confusion and make sure we are all on the same sheet of music. BDCs are known by other names you may be familiar with such as Phone Rooms, Relationship Management Departments, and Customer Development Centers (though calling it a CDC always makes me think of the Center for Disease Control.). The names may vary, but the functions are generally the same. The primarily function (no matter what the name) is to properly handle all incoming and/or outgoing phone – and in many cases Internet – contacts with sales prospects.

Now, since we’re having so much fun with letters, let’s throw a few more into the discussion—CRM. Don’t confuse this with a BDC. A dealership’s CRM (Customer Relationship Management) is generally understood to be the systems and policies, along with any associated software programs, used to implement the dealership’s strategy for building relationships with new prospects and their existing customer base. In essence, CRM is the key tool used by the BDC, as well as the dealership’s sales staff.

OK, hopefully that’s not as clear as mud now. Let’s get back to the question at hand. I mentioned that we discuss this topic frequently at our 20 Group meetings, and it seems to be one of those issues where reasonable, intelligent businesspeople can hold passionately to either side of the argument. So, we’ll review the pros and cons; then you can decide what is best for your situation.

Pros: Having a BDC allows you to centralize, which ultimately results in more control. This is especially true for dealers who have more than one location. The incoming leads from all advertising can be directed to your BDC at one central location, where you can then decide the best way for you to distribute the leads to the various locations. You can choose to distribute the leads based on the customer’s proximity to one of your locations, where you have the inventory most likely to meet the customer’s needs or (as we like to do) whichever location needs a boost in traffic at that time. Proper use of your BDC can be a great “slump-buster” by directing traffic to a particular location.

Another big plus of a BDC is having EVERY phone and Internet logged correctly and with the true ad source. By true ad source, I don’t mean where they got your phone number, or which number they dialed. They may have seen your ad in the Thrifty Nickel, but gotten your phone number out of the phone book or online. The true ad source in that case is the Thrifty Nickel, as that is what prompted them to contact you. Recording this information is the only way to really know how much traffic you are receiving, and which ad campaigns are paying dividends. Proper use of this information can more than pay for any expense associated with a BDC.

One more benefit many people find in having a BDC is that it is easier to bring in someone new that you can train exactly how you want than it is trying to train your existing sales staff. Not only does a BDC require you to train less people, but they are not “distracted” by floor ups, plus they will not have the bad habits or preconceived misconceptions sometimes encountered when utilizing your sales staff to handle BDC duties.

Cons: The two most common objections to having a BDC are that they add too much expense and that in BHPH, the customers will buy from you, based on your liberal financing options, regardless of whether you have a BDC.

The expense objection is a legitimate concern that you need to carefully evaluate. Having a well-run BDC isn’t cheap. Consider that you need to hire quality people, train them on an ongoing basis and provide them the tools and software they need to maximize their effectiveness.

But anytime I start to wonder if the expense of a BDC is worthwhile, I pull out the tapes of the phone calls from when we had our sales people mystery shopped nine years ago, not coincidentally, right before we started our BDC. Despite the fact that we had already done multiple mystery shop calls over several months and subsequent training, in addition to bribing, threatening, pleading, ranting and cajoling, we were still quoting price within the first few seconds, not getting the customer’s name and number, not asking the ad source and in general just “brooming” the customer right off the phone.

Don’t get me wrong—our salespeople do a great job handling the rest of the sales process. Perhaps the skills necessary to be a top notch salesperson may not coincide with the skills necessary to maximize phone and Internet traffic. I think most dealers agree that having more deals that follow all the proper steps will result in more sales. Unless your salespeople are much different than ours, it seems having a BDC would be the best way to ensure those steps are followed every time and should result in additional sales for your dealership.

OK, I haven’t done a good job hiding my bias that I would never operate a dealership of any size without having a BDC focused on handling the leads exactly how I want them handled and assisting with the proper follow-up of our customer database. However, as I mentioned earlier, I have some long-time dealer friends who feel just as strongly that BDCs are a waste of money and don’t result in any additional sales. The good news is that YOU get to cast the tiebreaking vote for what you feel is best for YOUR dealership.

But whatever you decide about a BDC, I encourage you to act ASAP!

P.S. If you have any questions about this topic, send them to the e-mail above.
Vol 3, Issue 11


KAR Names Kelly President

KAR Names Kelly President

Peter Kelly has been promoted to the newly created role of president at KAR Auction Services, the company he joined through the 2011 acquisition of OPENLANE.

Dealer Job Finder

See more


VAS Partners With Alpha Warranty

Vehicle Administrative Services will offer roadside and ancillary solutions to Alpha Warranty Services under the terms of a new strategic partnership.