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Simple remedies for F&I 'commission breath'

Ron Reahard wants to put an end to "commission breath."

That's the term he coined to describe the obvious eagerness some dealership F&I managers exude while presenting customers with costly add-on items that will earn the managers big commissions.

“Today's consumer can smell commission breath a mile away,” says Reahard, an F&I trainer and consultant who is based in Soddy-Daisy, Tenn.

J.D. Power and Associates agrees. The company has advocated for years that to avoid commission breath, dealerships should pay bigger monthly salaries and less commission. But there have been few takers -- certainly too few to be statistically significant, says Jon Osborn, research director for J.D. Power, of Westlake Village, Calif.

"It would be quite a challenge to change the compensation structure," Osborn says. "The whole system is set up to reward an aggressive salesperson, even if it works against customer satisfaction in the long run."

Take your time

Reahard doesn't advocate a radical cure for commission breath, such as doing away with commissions. Rather, his common-sense advice for those who present F&I products is to take the time to get to know the customer's potential need for products like extended service contracts or tire-and-wheel coverage.

If a store's practices don't allow the F&I manager enough time with a customer, Reahard says, dealerships should restructure procedures to create that time. The alternative, he says, is for the F&I manager to "spew" a list of benefits in search of a customer need.

"I tell people it's like a deer hunter who fills up his gun with bullets and just starts shooting into the woods," he says. "Boy, I sure hope one of those bullets happens to run into a deer!"

To create an opportunity to engage the customer, Reahard says, it's a good idea to have the customer and F&I manager fill out the paperwork together instead of having most of it filled out before the customer reaches the F&I office. That may take a little longer, but it takes some of the mystery out of the process and gives the F&I manager the chance to learn more about the customer's needs.

"This is not secret-agent spy stuff," Reahard says. "Let them see what you're doing while you sign the odometer statement" and other routine documents.

Ditch the pitch

Reahard also says he's in favor of menu-selling, a standard practice in many dealerships. But in taking a customer through the product menu for the first time, he says, F&I managers should stick to the facts. "Ditch the Pitch" is one of Reahard's training catchphrases.

"A menu needs to be just that, a menu, a list of what's available and what it does," he says. "Imagine if you went into a restaurant and the waiter started giving you a pitch for every item. That's when people start to look at their watch and say, 'How long is this going to take?' Instead, you're asking how far does he drive to work, how many miles does he put on a car. A high-mileage driver is more likely to be interested in an extended service contract.

"If we're not genuinely trying to help that person across the desk make good decisions, then the F&I process is adding no value to the customer's purchase experience," Reahard says. "It's adding aggravation."

You can reach Jim Henry at

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