Industry News & Trends

The smart BDC

I spent last week in Detroit with all the dealer candidates for the American smart Car franchises.  The meeting was about the philosophy of smart USA and an introduction to the product.  I had a lot of fun there!  However, little about that meeting is relevant to Dealer Refresh, except….

smart (that’s right, stay off the shift key!) USA is building a national BDC for all smart dealerships.  The BDC will handle all incoming Internet leads and smart USA phone calls (not dealer phone calls).   All Internet leads includes the AutoTraders, Cars.coms, the dealer websites, and AutoUSA’s of the world….basically anything related to a smart.  They do not plan to work with the smart customers to the extent a dealership BDC would, but are planning to make sure the lead is completely scrubbed, and the customer is ready for dealer contact, before being passed to a dealer.  The BDC will also handle CSI calls and unsold floor traffic.  The goal with CSI is to call the customer within 48 hours of RDR and have those results to the dealer within 24 hours of the customer completing the survey (under 10 questions).

All this for $50 per sold unit that originated in the smart BDC.  Eventually smart plans to get involved with lead purchasing through their BDC as there are no plans to use traditional media for advertising.

To the best of my knowledge, no OEM has ever tried to service all their dealers through a centralized, national, BDC.

Who knew an argument with Jeff Kershner, in 2005, would lead to Alex becoming a partner with him on DealerRefresh. Where will the next argument take ...
  • L
    Lao Shi
  • October 22, 2007

This is only the beginning. As some of the more astute OEMs see the potential and advantages of working more closely with the clients we will see much more of this type of activity from them.

This will be a boon for the OEM'/clients and the dealers who are able to work from this formula, it will save money, time and allow the clients better service (hopefully). This is a great time to be in the industry as there are so many opportunities developing.

You're absolutely right Lao! I see a lot of potential for better customer service out of this model. The difficult part is funding a national BDC for a company like Ford and the reluctance of some dealers to not see the positive sides. I saw some push-back from a few dealers at the smart meeting, and these were very pro-active dealers.

I think the older OEM's will start with a merged CRM system to monitor dealer activities, then speculate a national BDC might be the answer. Going back on the costs - how many people would you need to man a national BDC for a company like Toyota? Is that an average of 3 people per dealership? If there are 1,000 Toyota dealers, that's 3,000 new employees.....big bucks!

This is definitely a great time to be on this side of the automotive business with a short memory for the "good old days".
  • L
    Lao Shi
  • October 22, 2007

A company like Toyota, Nissan, Mercedes or maybe Ford that has a large international experience (in Asia) will probably be able to be a bigger player in the development of this portion of the industry and lead the way.

A well trained call center in India or the Philippines with proper supervision and the use of today's technology will be able to make this concept model work, really this is no-longer a concept as the model and technology already exists.

The key factor is the training and proper supervision of the call center staff which would be a 24/7 operation. Many of the OEM's already have product training systems and testing in place, they will just need to modify and tweak it a bit.

This will be a “segway” for the OEM’s to be able to develop their sales reach internationally. This will also be a way for the more astute OEM's to bypass some of the "Old School Bagage" some dealership and industry management has about ecommerce and using technology to sell automobiles

The dealerships will have their own staff that would be interfacing with the OEM's that would be on the dealerships payroll. With this model the dealership will become more of a fulfillment center as well as traditional dealership and service outlet.

Isuzu already has a project they just started that is doing a very basic version of this; outsourced to a 3rd party company. They may not be aware of the potential of what they are doing and may not know how to take it to the next level, they may not even be interested??

Isuzu???!!! What are they doing? Inside the United States? How many Isuzu dealers are left?

The older/larger OEM's certainly have the pockets to pull it off, but I wonder if the willingness will be immediate. Toyota, BMW, and Honda have all spoke of straight integration with dealer CRM tools - not just ILM tools like some have already done. I believe this integration will be one of the first steps down this path.

smart, on the other hand, is a new OEM to the States with the ability to start fresh. I asked whether there were plans to integrate with a CRM, but they haven't gotten to that point yet. They did say they want to. I think the success of third party follow-up is a direct relation to the information inside a CRM.
  • L
    Lao Shi
  • October 23, 2007

Isuzu has contracted with a third party company to follow up with the leads and coordinate with the dealers in setting appointments and following up with the client.

I do not believe they realize what an opportunity they have here if they expand the program as the clients enjoy the prompt follow up and quality source of information provided, Many clients said when they began "wow we are hearing back" makes you wonder what the ISM's were doing all this time?

I think this could be a path of sucess for Isuzu as they are a quality brand at a popular price, great warranty program and Isuzu is one of the top truck OEM's in the world, they have international brand recongition for quality. Look at the loyal Trooper following. They are under marketed in USA

The "Howard Dean" success factor could be applied here if they approach the market properly.

  • C
  • October 23, 2007
Ok, I know I'm late, but here are my entries for acronym bingo...

BDC = business development center
USA = united states of america
CSI = customer satisfaction index
RDR = retail delivery receipt
OEM = original equipment manufacturer

Eh? eh?
  • I
    Internet Jeff
  • October 24, 2007
Thanks for the article Alex, and continued comments from Lao.

A national BDC through an OEM? Hmmnn...

Believe you are right on with the initial customer OEM contact and scrubbing, then passing it on to the dealerships BDC as a qualified car shopper (are ya taking notes Nissan USA?) lead. Then the OEM follows up with a quick CSI call from an RDR post sale.

Outside of the initial contact and post sales survey from the OEM, the dealership should be responsible for the customer satisfaction of the sale and service afterwards.

Customer retention is going to come from the personalized service of the sales rep that sold the smart car (and quality of vehicle), not from a nationalized, word scripted, OEM call center.

But the manufacturers will never get with the local dealers to get a real pay plan for sales reps to stay there long enough to care about post sales follow-up.
  • G
  • October 25, 2007
Interesting topic. Not sure an national BDC with a call center in the Phillipines or middle east will work. Have you called Dell tech support yet? While the support is very knowledgeable, the communication/language barrier leaves much to be desired.

This reminds me the "governmentalization" of something. By getting a behemoth company involved, it suddenly becomes cumbersome and is not agile to stay current with trends. To wit: As the OEMs are starting to want to go to one website provider, one CRM, etc., they are losing sight that these sales are HIGHLY regional, and what works well in Fort Worth will not produce the same results in Dallas.

Solution? Simple. Put the dealer on the hook for a specific model by putting it in their contract (BDC/Internet, ISMs, BDC only, etc.) and require them to maintain a set number of goals for each to ensure they are working. Or, place a performance bonus for those stores adopting and embracing the concept. Make a model out of them.

Driving it from the top down invariably results in poor adoption and results. Most dealers are highly competitive, so if they are falling behind a peer or the competition, they generally adopt what the other guy is doing to stay close.
  • L
    Lao Shi
  • October 25, 2007

I have used a number of support centers based operations in the Phillipines and India that work with a number of international companies including Dell tech support. The support is very knowledgeable, the communication/language was no problem at all. in fact I and many have found the experience very rewarding. I have had issues with communicating with automobile sales and service professionals in the States that were more difficult.

The key as always is hire smart and train well. The added benefit is many of these employees are very happy to have stable work at a fair wage.

The perception of call centers for solving tech solutions with clients who maybe more stressed for a number of reasons is not the same as a potential client who is looking for information in making a purchase.

Let it be said there is a need for a solution as the process that is presently being used in the US is not working and when one company finds a solution that will work the others will follow quickly.

  • J
  • December 20, 2007
manufacturers always seem to think they can do a better job then their dealers :(

make cars (GOOD cars - not good ENOUGH cars)... and leave the rest to everyone else... please.

Jason -If smart bothers you, wait till you hear what Honda is now requiring!
  • D
    Dan Madux
  • March 21, 2008
this is interesting. i think we will have to reserve judgement on the outcome of this until the program is rolled out in force.

i don't quite think it will be as bad as some expect, but that could be because i'm an optimist !?