BDC Bonus Plans
I saw this discussion in another forum, and I found in interesting.
To those of you who run a BDC, or work in a BDC, what sort of bonus structure do you offer? I personally have seen a Sales Squared (That is, Sales x Sales; 100 cars x 100 = $1000)
Or, I have see folks do a tiered system based on appointments, shows, and sales.
What do you use? DO you find it to be the best structure for your business?
Replies to This Discussion
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Permalink Reply by James Bunting on
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That first squared plan is kind of interesting - have never seen that before. I've seen success based on show/sale, and I've seen success (believe it or not) with a straight salary.
Overall, any kind of formula has to take into account more ephemeral aspects of what makes the dealership work, working backwards from "this is what we need our BDC to accomplish" to "this is how much I think I need to pay someone to do that." So if your BDC does nothing but call service ROs and read a script, this is something almost anyone can do with varying degrees of success. You can pay someone like that a so-so wage and get so-so results.
If your dealer group's overall plan requires your BDC to display ingenuity and persistence above and beyond that of a successful salesperson in order to supplement your volume/gross, be prepared to come up with a plan that allows for the possibility of a successful salesperson's salary, contingent on the results you need.
Most importantly, the person designing this pay plan needs to have some understanding of the work involved. No amount of shell-gaming the pay plan is going to get you much more than what you pay for. Talented people have a way of rising to the top - either at your dealership, or elsewhere.
Yes, I'm passionate about this. :)
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Permalink Reply by Brian Andersen on
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Katie,
The squared bonus plan is great! I have personal experience with that plan, and it can generate great results. In fact, we use it where I currently work and our BDR's have really worked the plan to their advantage to make a lot of money. For employees making $10 to $12 an hour, they can achieve a huge bonus in proportion to their hourly wage. Its a huge motivating factor for our BDR's. We also introduced a "team" bonus to encourage team work. For each sale the department generates, each BDR receives an additional $1 added to his or her bonus for that month. We will also do some other spiffs throughout the month based on appointments generated or shows depending on where we see a need for improvement at that particular time.
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Permalink Reply by Edward Shaffer on
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Wow - ONE ADDITIONAL DOLLAR EACH? Holy crap - where do I sign up?!?!?
All kidding aside - is that accurate - because if it is, and your department puts out 150 cars then each agent would be able to make half of one car payment each month from the bonus - not a ton of $$$ IMHO (IMNSHO)
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That would just be the "team" bonus for all sales generated by the department. We only have 4 BDRs at the moment. So if one Rep. generates 30 sales in a given month, he or she would earn 30 x 30 = $900. Plus a team bonus. So let's say for sake of argument, each of our reps generates 30 deals....that is 120 sales. Another $120 there. So just from those 2 areas, a rep would earn a monthly bonus of $1020. For someone making $10 an hour or $400 weekly, that's a pretty significant bonus I would say. And these numbers wouldn't factor in any other daily or weekly spiffs that may be put out throughout the month.
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Brian - that makes much more sense - thanks for the clarification :-)
I trend toward the snarky - my apologies if my comment was laced with sarcasm...I was only trying to be funny
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No worries, I am not offended easily! lol. I just thought it would make sense to clear it up with an example.
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Permalink Reply by Adam Kahn on
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Our BDC pay structure is $X per shown appointment, $X per sold vehicle, with a set weekly salary. The bonus structure was then an additional set amount per tier hit. So 20 shown appointments = $X, 30 = larger $X, and so on. The sold vehicle bonus was the same. 10 sold = $X, 20 sold = larger $X, and so on. Those bonus levels do not build on themselves. So if you got out 50 sold vehicles/shown apts. that month, you got the 50 sold tier bonus, not the 10+20+30+40+50. I hope that makes sense. If not, I would be more than glad to clarify.
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Permalink Reply by Kevin "Friend Me" Bradberry on
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If you build it they will come, but THEY need to be the RIGHT peopl...
Watch this short video to see what makes the difference.
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Katie -
Great question - I recently came across a dealer who implementer a tiered pay structure for the BDC team based on their Lead - Contact - Appointment - Show - Sold ratios as well as total numbers. Something along the lines of what Adam posted, but with an added wrinkle that if they exceeded any of the ratios along the way, then the $X grew as well. For instance, lets say that you were paying $10 for each appointment shown - and you would pay that if they were able to achieve a 25% rate of appointments to contacts. The enhancement comes in when their rate of appointments to contacts goes up to 30% then the per appointment pay is increased to $12; for a 35% rate, perhaps $15 per.
AS far as actual bonus goes, we usually suggest a team bonus based on department numbers of total sold units - after all, the dealership does not actually make any $$ until the cars are delivered. The majority of the pay plan focuses on getting in touch with leads, setting appointments with the contacted leads, and getting as many of the appointments to show up as possible - this is the point of the BDC in the first place. Yes, they have some net effect on the total sales, but they are not directly responsible for them - therefore they should get paid the most to generate shown appointments and gain some residual income from the sales (after the dealership gets paid).
Edward Shaffer
Consultant / Trainer / Digital Warrior
PCG Consulting
469.323.3199 – Mobile/Text
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Permalink Reply by Mauro Andres on
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I like the idea of squared only if we use real Math. 100 x 100 is 10,000. Now that's what I'm talking about. A $10k Bonus... Whoot whoot!!!
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