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The 40,000-ft View of Outsourcing to In-House BDC's

Can a dealer begin business development as an outsource service and transition to an in-house operation? My answer to that question is a resounding “yes.” Of course, that “yes” comes with a few ifs. This route will work if everyone is prepared for it, if everybody’s properly trained for it and if there’s proper communication between the outsource module and the dealership’s management.

Since this is such a large topic, in order to explore it in-depth, this article is the first of a four-part series dedicated to the topic “Outsource to In-House.” This month, I’ll cover the bird’s eye view, and over the next three months, the articles will focus on the three imperative stages of the transitional process:

1.  Preparation – Choose an outsource provider, which business development functions to outsource and a point person to communicate with the outsource BDC on a daily basis. Also, get buy-in from management staff during this stage.

2.  The Ramp-Up Process – Get buy-in from the rest of the staff, and determine the functions your in-house BDC will perform. Get the proper equipment and hardware in place, and start training so employees can begin to familiarize themselves with the new or updated processes. Key members of management should receive training on greeting appointments and the reverse TO process. Plus, towards the end of this stage, you begin hiring/recruiting.

3.  The Final Stages – While still outsourcing, the outsource provider comes in to begin full-scale training of your BDC employees. There will be some overlap, but that’s necessary for a natural, seamless transition. The new processes are mastered, and the switch from outsource to 100-percent in-house is complete.

The entire process varies and can take anywhere from a month to a year, or longer. First, the dealer must examine the options for outsource providers. It’s very important that dealers do their homework when choosing a provider. I recommend a provider with a flat fee, as opposed to one that charges per appointment, so you’ll know your cost upfront. Plus, the provider you choose must be able to help you make the transition to an in-house operation.

So, you, ask yourself, “Why would I want to go this route?” The main reason is to gain and maintain control. Granted, some control is sacrificed upfront because an outsource center will handle the calls; ultimately, however, once the process is complete, the dealer will have more control than ever over the phones.

Once a dealership gains control of its phones, it stands to sell a lot more cars each month, and in this economic environment, dealers can’t pass up opportunities. As I said last month, each appointment needs to be treated like precious gold. It’s my belief, with regards to Internet sales and business development as a whole, the quicker your dealership converts an e-mail into a phone call or a phone call into an appointment, the better off you are because if you don’t, one of your competitors will.

As the saying goes, “Lead, follow or get out of the way.” There are many dealers out there leading the way in business development efforts. You can join the leaders to reap the most rewards. Even if you start out as a follower with the goal of becoming a leader, in today’s market, following is much better than being left behind.

I’ve seen many dealers selling between 100 and 200 cars a month who benefit from small in-house BDCs consisting of one to three people, and I’ve seen dealers selling 300-plus cars with fully-operational “death stars” for BDCs employing multiple teams of  people. For the smaller dealer with only a couple of salespeople, strictly outsourcing may be the better option because it doesn’t make sense to have more business development representatives working the phones than salespeople on the lot.

So, what does the dealer need to do to ensure this outsource to in-house BDC is a success? The dealer must have a growth mindset, and equally crucial is buy-in that trickles from the top all the way down.

For those dealers asking themselves if they can afford to take on such a big transformation right now, ask yourself if you can afford not to. If there are tumbleweeds blowing across the sales floor and salespeople aren’t blasting the phones, then someone needs to be on the phones getting customers in your store. Plus, it will allow you to account for every dollar spent on advertising and to determine where your ad dollars are best spent as well as where they’re not effective.

Next month, I’ll cover the preparation stage for transitioning from an outsource business development solution to an in-house one in depth. 


Vol 6, Issue 1


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