Old habits die hard in the auto industry. Yet, the pandemic has revealed that change born of necessity can be a blessing in disguise. Dealers who formerly did not embrace digital retailing tools, for example, accelerated adoption last year, and in a survey from digital financial solutions provider eLend, 87 percent reported that digital retail-initiated transactions resulted in unchanged or higher gross income per vehicle retailed.
I would argue another change will have great value for, and be embraced by, new-vehicle retailers: the service department business development center.
I have spoken with a few dealers who told me their automaker partners are encouraging dealers to look to service to help make up any profits lost by a lack of new inventory, including implementing a BDC.
Record-high transaction prices and a scarcity of new models stemming from the global microchip shortage are leading more customers to hold onto older vehicles or shop the used-auto lots. Fewer (albeit profitable) new-car sales and a glut of older cars on the roads make the service department more important than ever before as a source of revenue.
However, few service advisers have the sales skills or time to do consistent outbound business development. Most are scrambling to simply pick up inbound calls. That leaves hundreds or even thousands of outbound call opportunities going to waste.
That’s where a dedicated service BDC comes in. The ideal setup is to have a BDC manager oversee one or two agents — depending on budget and growth goals. The BDC should handle inbound customer calls for things such as service appointments and should initiate calls, emails and text messages to drum up business from customers who, for instance, declined recommended service on their last visit.
To be sure, implementing a service BDC requires some time and cost to get up and running. Hiring is the first step. I recommend casting a wide net for a manager and agents who demonstrate self-motivation, integrity, adaptability and persistence. Don’t constrain your search process to only those who have automotive industry knowledge. That can be taught. It’s more important to hire for intrinsic personality traits that can be reinforced with a competitive hiring package and clear bonus structure.
Second, you have to provide tools that structure the process and allow you to measure results. Over the last decade, a wealth of call center software arrived to help streamline workflow and raise productivity. In my book, good BDC software will deliver four metrics that matter: agent effective rate, agent productivity rate, call connection reports (including the calls that did not get made) and campaign conversion rate.
Communicating with your service customers should be easy. And it can be with the right people, process and software platform.
The trend of older vehicles on the road needing service, coupled with potentially low inventory levels of 2021 models, makes the service department more important than ever as a primary source of revenue. Service advisers are not equipped to prioritize business development. A service BDC is a necessary change that will be a blessing in disguise.