By the time you are at the point of considering how you want to compensate your business development center team, you have committed to the program and have decided what type of BDC you will have:
- A large, full service BDC that includes customer service representatives (CSR) who will set service appointments and conduct CSI follow up.
- A small BDC that only handles sales leads.
- A hybrid in which your store handles the BDC functions, while an outsource provider handles your CSR-related duties.
First, let me say that there are literally hundreds of ways to set up compensation plans and none of them are “perfect.” The plan has to work not only for the dealership structure, but also for the market and markets vary immensely. Having said that, it is important for every BDC camp plan to include a motivating factor, which is either a bonus structure or an incentive component for performance. Start with business development representatives (BDRs). This is an entry-level position for the BDC department. Let’s be clear that entry-level doesn’t imply that they are unskilled or untrained. It merely means that it is where everyone in this department starts. The BDC position should be paid a small base rate. Hourly may be the easiest, but a salary can be used. Just make sure that, in combination with hours worked, it is complaint with all minimum wage laws. The balance of their pay should be incentive bonus component based on the number of appointments that show (not just set). I want all BDR’s focused on setting appointments, not pre-qualifying customers. There can even be an extra bonus for those who consistently exceed goals. For example, a BDR who averages more than five appointments that show per day is paid on additional bonuses.
Tread carefully when paying BDCs on sales, because human nature can lead to filtering and prioritizing for the benefit of the individual BDR rather than for the greater good of the store. My experience has shown that decision making about the priority of calls should already be made for a BDR. A significant factor in last business is with short-time salespeople who either cannot or will not follow us as effectively as a BDC. When I ran a sales department, I wanted every opportunity possible, not just the ones that an individual (sales rep or BDR) deemed worthy. Too many cars are sold to those “unworthy” leads by your competitors. Relentless commitment to a BDC (regardless of type), coupled with a tenacious sales team, is how more cars are sold.
BDRs can market themselves with a good “elevator pitch” that gives everyone who asks them what they do for a living a reason to call them for an appointment for themselves, their friends or family. A good sales representative is always prospecting so why shouldn’t a good BDR? It will only increase their income (and the dealership’s profitability). Team leaders (TL) should be paid a base salary plus an incentive. However, the TL will not set as many daily appointments as BDRs due to the additional responsibilities of overseeing several BDRs. Therefore, their incentive should be based on the activity of their team. They help to push performance by showing rather than just telling. What I mean is, TLs should be capable of posting consistent numbers while helping their team do the same and should be rewarded accordingly.
In addition to the basic compensation plans, there should be motivational incentives from time to time to keep the BDC “pumped up.” For example, if you have a large enough BDC to have more than one team, occasionally run a competition for a week or month. The team that maintains the highest average number of appointments, kept above an expected base, earns a bonus. Before you decide on a plan or even the value of each component of the plan, you need to research your market so that you are offering competitive wages. Without that, your BDC will likely suffer higher-than-average turnover. As I mentioned in the beginning, there are many variations of pay plans. You just need to find the one that works best for your market and dealership. How many cars do you want to sell and how profitable do you want to be? When investing in the right people to work leads and follow up, remember the old saying “You get what you pay for.”