Orange Motors teams F&I and sales staffs to win big

Dealer Carl Keegan lets finance and insurance managers take risks and make mistakes.

And that's made all the difference at his store, Orange Motors in Albany, N.Y.

"We push the envelope and go for maximizing the profit but also maximizing the customer's experience," says Steven Myers, senior finance manager at Orange Motors.

With 95 years in business, Orange Motors recently made its F&I office the key profit center of the business, Keegan says. And it has done it with the help of Myers, a once homeless man, who devised a way to make the sales and F&I forces one team with the sole focus of boosting F&I revenue.

Myers and his boss, Frank Diantonio, stoked that team spirit with a plan devised early last year. They hold frequent training sessions; they adjusted pay plans that give salespeople more back-end commission; and they have a new, streamlined menu-selling process.

The result: The dealership, which sells Ford and Mazda, sells 60 to 70 of Ford's extended-service contract a month.

And its F&I office consistently brings in $150,000 or more in sales each month -- up 20 percent from a year earlier. Orange Motors sells about 3,600 new and used vehicles annually.

Myers, 38, recalls a defining moment that prompted him to devise the plan that's leading the F&I sales success today.

The F&I team was pulling in around $120,000 a month in F&I sales, Myers says. But boss Keegan turned up the heat.

"He said, 'Great job, but I need another $30,000 in sales a month,'" Myers says. "I thought: 'What the heck am I gonna do?' So I looked at our system to figure out what we can do to make that happen."

Last fall Myers started urging his bosses to have the finance team hold weekly 15-minute sessions. In the meetings, they review the sales data and hash out ideas to improve customer service and increase revenue, Myers says.

Myers, a high school dropout, often leads the meetings. He applies lessons he acquired from Dave Ramsey's Financial Peace University while learning how to get out of his personal debt.

"It's completely revolutionized my life," Myers says. "But what it's about isn't the money. Everything in life is about relationships with people."

Teamwork

To better build relationships, Keegan agreed to pay to send his finance managers and salespeople to professional training sessions on selling F&I products, Myers says.

In June, Myers and two salespeople attended a three-day session to learn how to better segue from the sales desk to the finance office. Myers says he applied the lessons learned when he returned and made $20,000 in F&I sales in three days.

One of the other biggest changes the dealership made to its process of selling F&I was persuading the sales team to let a finance manager talk to each customer in the showroom before a deal was done or the customer entered the finance office, Myers says.

"Out of all the changes, this was the most difficult, making sure the salespeople let me or the other financial manager talk to all of the customers -- for compliance, for best practices and for sales," Myers says.

But once it kicked in, the bond between salespeople and finance managers grew.

"We're writing more deals now," Myers says. "Salespeople have learned to trust me because they know now exactly what I'm going to say to their customers."

A rough week

The drive toward teamwork started with monetary spiffs.

In January, Myers tweaked the dealership's F&I pay plan to inspire salespeople to sell more high-profit-margin extended-service contracts and fewer lower margin products.

Myers says he stopped paying a generous $140 spiff to salespeople for easy-to-sell products such as rustproofing. Instead, he boosted the commission on the harder-to-sell extended-service plan from $50 to $100.

"It was a rough week; many salespeople were upset," Myers says. "Once they got over the pain of losing the rustproofing, they realized they need to sell service contracts."

He told the sales team that whoever sold 10 extended-service contracts a month would get an added bonus.

"I wanted a wow factor. I wanted to grab their attention," Myers says. "By literally feeding that beast, we went from 30 warranty sales a month to 60 because I made it so aggressive to pay them and I didn't have to cut any profit to make the deal."

To further encourage sales staff to sell F&I products, Myers says, salespeople certified to sell the products by 2013 will get a higher spiff off the back end of a vehicle sale than noncertified salespeople.

Finally, the F&I office started menu selling in January, replacing the old system of step selling.

With step selling, Myers says, the finance manager would try to upsell a customer from a less expensive product to a pricier one.

A menu system allows finance managers to show a customer all the products available and then customize a package to best meet that customer's needs. The result is a more customer-friendly sales process, Myers says, and growing revenue.

That's a trend, Myers is confident will continue.

"We're going to be doing $200,000 a month consistently, and I put that on the line," he says. "Next year, I believe we'll see a $300,000 month."