Many dealers feel they need both a sales and a service BDC based on advice from numerous industry trainers. The thought process is that the sales BDC’s job is to set appointments for sales customers and the service BDC sets appointments for service customers. But what if you combined the two to create a single service BDC? Service is the largest percentage of dealership revenue. It makes sense to have a service BDC. But not many dealers want to dissolve their sales BDC.

In a recent article in Automotive News, a dealership in Michigan moved its entire BDC to the service department and simply installed an Internet Manager for sales-related issues. It is certainly important to acquire inventory right now but, in addition, dealerships want to bolster service revenue as well.

This dealership’s decision to move the BDC to the service lane solved a myriad of issues. First, it saved money by no longer having two separate BDCs. Second, the dealership was able to train its BDC agents in how to schedule service and also identify vehicles that need additional service outside of any issue the customer originally called about. A system has also been set up so an Internet Manager can jump in should a customer be interested in potentially trading and/or selling their current vehicle for a new one.

According to the article, “The new approach has led to about 330 BDC-scheduled appointments per month, about 100 more than it got previously, and Internet sales close rates have doubled to nearly 20 percent.” Those are pretty impressive results from simply using their existing BDC differently. In addition, the dealership “has sold eight to 10 vehicles from the service lane and buys about 20 vehicles from service customers each month.”

These are similar to the numbers we see with clients at Recall Masters. By combining staff resources, utilizing systems more efficiently, designing new ones that further remove waste, sharing best practices and consolidating a stellar customer service experience, the strategy is paying off.

The dealership spends the same amount of money in employee expense, gets the inventory they desire in this hyper-competitive market, and the customer gets a new (or new-to-them) vehicle. And, just like dealerships have always done, they are offering incentives for customers that trade-in their used cars. Because of the lack of new vehicle inventory, the dealership gives the customer the option to get out of their existing vehicle and have a guaranteed “bonus” in the future.

This is a great idea because not only does the dealership gain inventory they can repair any warranty or recall repairs on, but they can also build brand loyalty from those customers who did not think they could trade in their vehicle at that time.

A service call center is relatively easy – and inexpensive – to implement. By combining the sales and service BDC into one entity, the dealer captured more service business, gained more inventory without fighting other dealers at auction, and, as a result, saw more service and sales. If this dealer can do it and see those results, there is no reason why any dealer – from the smallest to the largest – can’t deploy the same strategy and boost their bottom line.

What consumer doesn’t love the internet? It has been especially transformative for the automotive industry. Not only can shoppers compare vehicles, options, pricing, and availability with a click of the mouse, but they can also purchase the vehicle and have it delivered to their driveway.

The market disruption is in full swing, evident in the revenue generated and the numbers of units sold by organizations that include Carvana, Vroom, Shift, to name a few.  A vast majority of franchise dealers have also adopted similar pick-up and drop-off processes. But these dealers haven’t faced scrutiny from state and local governments in the same way the major internet properties have. 

Franchise dealers have always felt the heavy hand of government regulations and navigate these familiar grounds by streamlining processes to balance compliance with sales objectives.  When it comes to national operations and moving cars across state lines, how do these modern-day, virtual dealerships remain in step with the multitude of legal requirements that span state and local governance?

As it turns out, there are a few cracks. 

During this pandemic, Carvana, Vroom, and Shift have seen a massive upswing in sales, simply because they make it so easy for a consumer to buy, finance, and then have the vehicle delivered right to their home. Consumers have found it so easy, and have embraced it so much, that according to an article published on Automotive News, on August 7, 2021, Carvana reported its first quarterly profit EVER!

Ironically, just five days later, the same industry news authority reported that Carvana has been suspended from selling cars in Wake County, NC (which includes the State Capital, Raleigh) for SIX MONTHS. This is due to many violations, including failure to deliver title work, issuing out-of-state temporary tags, and selling vehicles that had not passed the mandatory state safety inspection test!

Let’s look at what the North Carolina Safety Inspection test includes:

“A motor vehicle registered in North Carolina must pass an annual safety inspection before its registered owner can renew its vehicle registration. They can be conducted no more than 90 days before the license plate and registration expires. During a safety inspection, a licensed mechanic examines a vehicle's:

1. Headlights
   Accessory Lights
   Directional Signals
   Foot brake
   Parking Brake
   Steering
   Tires
   Horn
   Rearview Mirror
   Windshield wipers
   Exhaust System
   Tinted windows, if applicable

Failure to get a vehicle inspected by the due date will result in a vehicle's registration being blocked until the vehicle is inspected.”

Of course, they can’t deliver title work and issue out-of-state temporary tags because, while it is legal to sell used cars without safety recalls repaired, it is ILLEGAL to sell cars that haven’t passed the mandatory safety inspection and all that it entails.

It’s easy (and plain) to see that every one of the items included in that list of things inspected is important. Are headlights, brakes, steering, and blinkers important to a driver's safety? Absolutely.

Is this lack of detail (failing to have a mandatory safety inspection) simply an aberration? Or does it extend to other counties and states where these organizations are selling cars to consumers? Franchise dealers are selling cars faster than they can acquire them. So, it would stand to reason that Carvana, Vroom, and Shift are as well. Carvana even launched a partnership program so they can add (and sell) dealerships' inventories to have more vehicles available for consumers on their digital retailing platform. And you thought it was hard for dealerships to get cars to sell!

The fact of the matter is that if unsafe vehicles are being sold to consumers because they failed to do mandatory safety inspections, there is little likelihood that open safety recalls are being attended to. That’s not good for consumers and a potential public relations travesty for the industry.

And by no means should you even speculate that this is a “North Carolina” thing. According to the Times of San Diego, just this month Carvana settled a lawsuit for $850,000 with California for selling cars for 4 years without a dealers’ license, transporting cars without a transporter’s license, and… surprise… didn't provide the inspection reports as required by California law!

Most dealers are compliant with state licensing requirements and adhere to the laws of the state where they sell cars. While buying a car from Carvana, Vroom or Shift is easy, it seems they may want to take a closer look at potentially unsafe vehicle sales that could damage their brands and degrade consumer confidence in all internet vehicle sales.   

One of the fears dealerships have regarding digital innovations in the automotive industry is that the internet will replace phones. However, it is a well-known fact that phone leads close significantly faster than internet and social leads combined. And guess what -- fixed operations generates many of them. As a result, dealerships are placing a priority on the phone, especially when it comes to fixed operations.

Some dealers have that one salesperson who has been in the business for 20-plus years and just cannot wrap their heads around the internet in general, refusing to use it. More than likely, this person still manages to outperform all the internet savvy salespeople every month. How? They are doing it with the phone. Salespeople who favor the phone do so because they can make a better personal connection than via email or text. They then use that connection to encourage the customer to visit. The same goes for a service advisor when a customer calls in with a service question or to schedule an appointment.

While it is important to be on top of advancing technology and offer all forms of communication from email to text and even live video -- many consumers still favor phone contact – for an immediate solution. Most customers will call into the dealership first rather than use the service appointment scheduling widget on a dealership’s website.

Car shoppers ask questions over the phone as a test to see if the dealership is willing to answer them. If your strategy is to throw up roadblocks in the customer's chosen form of communication to force people into the dealership, you will be ruled out (in sales) or leave a customer frustrated and maybe even looking for another solution (in service).

Customers want human connection before they visit a dealership, and it can benefit your bottom line significantly if you make the most of those phone calls IF you answer the phone.  Consumers also use their phone experience with the dealership to gauge the dealer's attention to service and personalization. In short, are they going to be treated with the respect they deserve, or are they nameless, faceless transactions?

Closing ratios (for both sales and service) rise when phone contact is made with customers but 60% of service calls end without an appointment set. Why? Because nobody answers the phone, or the customers get frustrated by a phone tree. Here are a few other eye-opening stats on phone support that ought to awaken your team:

- The average dealership misses 8 service appointment calls per day (RightNow Customer Experience Impact Report)

- If answered and converted, those called would generate $48K/month in revenue

- 23% of incoming calls never connect with a live agent (CallRevu)

- 31.6% of answered calls result in an appointment. (DialogTech)

- Caller retention rate is 28% higher than web lead retention rate (Forrester)

It can be hard for your customers to connect and do business with you when it seems like the dealership is purposefully avoiding phone contact. Building that connection via a live connection with a customer is the fastest way to reassure them your dealership cares and is ready and willing to help them.

The recent pandemic has pushed record numbers of shoppers onto the internet over the past nine months. While internet leads and sales have been skyrocketing, many consumers still consider the phone an important step in the car shopping, purchase, and servicing process. 

When it comes to sales, technology is not meant to replace people. It simply allows them to expand their audience and to do what they do best: generating revenue through providing a great customer experience.

Stop sending your customers into phone trees if no one is prepared to pick up the phone when they make a department selection. Unless you have a sophisticated solution that can manage the inquiry without a live agent. Still, those don’t seem to meet the satisfaction of most consumers anyway. And do not force your customers to sit on hold so long that they hang up. By so doing, you might not just miss an oil change, but perhaps a more lucrative customer-pay RO or a sale. And, in these times, I am sure you don’t want to miss either.