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 recent survey from digital financial solutions provider eLEND, 87 percent reported that digital retail-initiated transactions resulted in unchanged or higher PVR.
I would argue another change, propelled by the pandemic, will have great value for, and be embraced by, new car and truck retailers: the service department BDC. I have spoken to a few dealers who told me their OEMs are encouraging dealers to ring the tail in service to help make up any profits lost by a lack of new inventory, including implementing a service BDC. As I see it, there are several reasons why:
New vehicle demand is hot, and while many OEMs have ramped-up to pre-pandemic production, the global shortage of microchips is already trimming that growth. GM Authority recently reported nearly 60,000 GM vehicles were cut from the North American production schedule as a result of the shortage.
Edmunds reported that demand and lack of supply pushed the average transaction price for a new vehicle to an all-time high of $40,573 in December of last year. Sky-high prices and scarcity of 2021 models 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 primary source of revenue. However, few service advisors 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 set-up is a BDC manager overseeing one or two agents – depending on budget and growth goals. The BDC should handle inbound customer calls for things like service appointments, and also 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 with 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 cars 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 advisors are not equipped to prioritize business development. A service BDC is a necessary change that will be a blessing in disguise.
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