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BDC Pay Plan Strategies from Joni Stuker-DavisFrom the Trenches!

When Joni talks BDC... Everyone Should Listen...

The following is a brief excerpt, contributed by Joni Stuker-Davis... the DealersEdge "go-to" subject matter expert and contributor, from a DealersEdge Guide on Pay Plan Strategies.

A true BDC or Business Development Center in the larger world of commerce... develops business using both reactive and proactive methods to viable sales appointments. In a general sense, Business development involves creating strategies and activities to grow and expand a business, often through identifying new markets, products, partnerships, or opportunities for revenue growth.

Not so much for auto dealerships. In practice the BDC is looking to develop opportunities, sales and profits from both new and existing customers. It is a focused process with a design to enhance the traditional sales process; both in sales and in service.

BDCs can be likened to the hub of a wheel where the spokes are different prospecting sources such as:

  • Internet leads

  • Sales calls/phone ups

  • Unsold showroom traffic

  • Missed appointments

  • Past sold customers

  • Service customers

  • Equity customers

  • Service to sales

Leaving all the above to your sales teams (both showroom and service) often results in lost opportunity. This is why so many dealership organizations have embraced the BDC concept.

For this Report-

Let's Focus on Creating Better Pay Plans to Improve Results

Joni readily admits that her suggestions go counter to conventional wisdom, but she also has some history and examples that help validate her positions.

Negative aspects of conventional wisdom include perpetuating outdated or biased beliefs, limiting innovation and creativity, and hindering progress and growth by discouraging questioning and exploration.

This is the reason DealersEdge places so much value on subject matter experts with related and current experience working in and with today’s dealership operations.

BDC Manager’s Effective Compensation

When it comes to BDC manager pay plans, the formula is pretty simple.

People + Performance = Success

That’s right! Plans that follow this rubric tend to have superior results.

So why do so many plans fail?

Following are some common Pay Plan mistakes.

  • Compensation for sold internet leads- Joni suggests that such one-dimensional focus tends to hold back BDC success by limiting the scope of sales possibilities.

  • Not directing attention to “people development” - The higher functioning the team is, the better the results. The goal of the BDC manager is to ensure that ALL members perform at standard (at least.)

Key Bonus Suggestions for All BDC Team Members:

The goal is to focus the manager’s efforts on achieving team success. To get there Joni recommends incentivized:

Each Rep Performing to Standard- Set Hourly Goals: 17 dials = 3 contacts = 1 appointment. Plus 1 referral per shift.

Do not set daily goals - This sounds contrary to the point above... daily and hourly standards are important... but judge performance over a longer period of time. Monitor hourly and daily and take opportunities to correct and improve individual performance.

Appointment Show Ratio - A minimum of 50% (Joni noted that a 60+% show rate is common at many of her clients.)

Some tips to increase show rate- No appointments more than 72-hours in advance; Always get customer work phone numbers; Always speak to all influencing parties

Sold Self-Generated Appointments - Ask for referrals at the end of all conversations regardless of source. Joni noted that 25% of people will give referrals if asked.

This is just a portion of what Joni has to say on the subject and her complete comments are contained in the DealersEdge Guide - Pay Plan Strategies... featuring a number of DealersEdge Contributors commenting on Pay Plan formulas for Key Managers. Details below.

DealersEdge asked a number of our Subject Matter Experts to offer their views on the evolution of Pay Pans in the 21st Century Auto Dealership.

Specifically we asked them to address on the changing landscape of retail automotive and how they would design Pay Plans that deliver consistent results while making sure everyone is treated fairly and feels lucky to be working for your organization.

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