Pub. 15 2016-2017 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 2 , 2 0 1 6 22 new jersey auto retailer B DC is the most derogated acronym in the automotive industry. First off, it means something different to everyone and is among the most controversial subjects to discuss with Dealer Principals and GMs. And the reason is simple. Because most of their BDCs are hemorrhaging money! I have heard horror stories about how it’s the OEMs, or the incompetent consultants, or the BDC Managers that THINK they know what they are doing. I’ve heard about BDCs that run smoothly but don’t make any money. The reality is that over 80% of all BDCs are non-profitable, broken or operating nowhere near their true potential. And there are a myriad of reasons why this is true: 1. The BDC is not mapped out correctly. 2. Dealers are doing too many things at once. 3. The wrong people are staffing the BDC. 4. Not enough people are in the BDC. 5. The BDC is not in sync with other departments. 6. The budget for the BDC is lopsided. 7. There is not enough training (or the right training). Most dealerships start a BDC because an OEM suggested it or a vendor sold them on the opportunity. The problem is that there is no true operation model put into place. A dealership needs to ask itself several questions when creating a BDC: • How many total units does my dealership deliver? • How many originate from the Internet and phone department? • How many net cars do we want to increase on a monthly basis? Let’s say a dealership wanted to increase 50 net units per month. There needs to be an entire operational model on how this is going to happen. Questions need to be asked and answered like: • Do we have enough leads? • If not, where can we generate more opportunities? • How much is it going to cost per opportunity? • Do we have enough people to handle and convert these new opportunities? • If not, where do we get these people? Over 80% of BDCs Are Broken Or Non Profitable BY SEAN V. BRADLEY, CSP