Northwood University and EFG Cos., taking a page from the scripts of The Apprentice, Project Runway and Shark Tank, are looking for some inspiration from students to shake up the F&I product menu.
The Midland, Mich., school and F&I product vendor this fall are launching the F&I Innovator of the Year Award, an annual competition among Northwood students to invent an F&I product that EFG will develop for the auto retail market.
The goal? “To get the minds of Northwood around the changes going on in the industry,” John Pappanastos, CEO of EFG, told Automotive News.
Dealers are begging for new F&I products, and “there are a lot of possibilities in terms of what comes out” of the competition, he said.
EFG and Northwood view the program as “a rallying cry” for the industry. “Our hope is that other F&I providers will follow suit in finding new ways to innovate and drive value for dealers,” Pappanastos said in a statement.
Northwood will select 18 junior and senior marketing and management students to create six teams with three participants. The teams will compete against one another to create and build an F&I product. Each team will be assigned an F&I director from a dealership to serve as a mentor and sounding board for one hour a week.
The students will be tasked to show the practicality of their F&I product in the marketplace, and its potential for commercial sales in franchised dealerships. The teams will upload video diaries, showing their progress and findings, to YouTube each week. However, the videos will not divulge the teams’ products.
A panel of dealers principal, EFG executives and Northwood faculty will judge each team’s product at the end of the competition. EFG will award the winning team $25,000, and develop, market and sell the winning product. Northwood will receive a percentage of the product’s revenue.
This year’s contest runs from Sept. 7 to Nov. 13.
Need to innovate
Elgie Bright, Northwood’s automotive marketing and management program chair, emphasized the importance of sales of F&I products to dealerships’ bottom lines.
“The margins are skinny on new-car revenue, and the F&I revenue stream is a big part of the business,” he said. “F&I is a big piece of the students’ learning.”
That’s especially true as pressure from regulators and a changing marketplace force the industry to evolve.
“We’re seeing that the F&I part of the industry needs to innovate more and bring new ideas to a changing” consumer demographic, said Keith Pretty, Northwood University president. “The industry is well aware that it needs to change and be stronger and be looked at as a center of innovation. We really think that our students get that.”
And with more millennials entering the market, Pretty added, the students “know their generation. They can speak better for their own generation than can generations above them.”
Many of the students participating in this year’s contest have completed internships in dealerships, where they have seen consumer needs and F&I operations firsthand. Most are also already certified by the Association of Finance & Insurance Professionals, Bright said.
He added: “Doing this type of project is something I’ve wanted to do since I’ve come on board at Northwood” four years ago.