Constant refinement of its product mix is just part of Riverside's profitable strategy. The company averages $1,000 in F&I income per new vehicle sold. The dealership group just earned the “F&I Dealer of the Year” award from F&I Showroom magazine.
Reporter Donna Harris interviewed Dagenais and Tom Wilson, the finance director.
You're taking prepaid maintenance off the menu, but will you still sell it?
Dagenais: We can still sell it to fleets. Prepaid maintenance is well-received in the fleet business. Fleet operators are concerned about variable expenses, which can get them in trouble with their budgets.
What new products have you added to the menu?
Dagenais: We added the Crystal Fusion windshield treatment after testing it. When you drive in a lot of rain and snow without a lot of streetlights, it makes a difference.
How did you test it?
Dagenais: We applied it free to local law-enforcement vehicles. They are in the car all the time and could give us valuable feedback. The test went well enough that we decided to sell it.
Many dealers are selling products in packages. Any work especially well for you?
Dagenais: Our top product is what we call the “Midwest Protection Package.” It includes rust-proofing, paint sealant, undercoating, fabric protection and windshield protection. In some places, maybe people would think that's smoke and mirrors. But because of all the gravel we have in this area and the salt on the road in the winter, this is well-received. Our sales of extended-service contracts, key replacement, GAP contracts and road-hazard coverage for tires are strong.
How have you responded to the credit crisis and weak economy?
Wilson: We used to place 70 percent of our (loan and lease) contracts with national lenders and captives. All of a sudden, in the fourth quarter of 2008, they tightened credit. We shifted more business back to local banks and credit unions. They know the local market and they're very competitive. Now 40 percent of our business is with national lenders and 60 percent is with local lenders.
Have you tried selling service plans out of service lanes?
Dagenais: We have the service writers send people to the finance office for a good, clear pitch on the products. The service people are not up on the products. It takes them far out of their comfort zone. It's best just to get a good referral back up front to the F&I office.
When money's tight, it's also tough to attract good F&I managers.
Dagenais: The last 12 months we've had the opportunity to attract some good people. Good talent was displaced -- terminated or let go.
What do you look for in an F&I manager?
Dagenais: We want a “type A” personality, the kind where you have to grab the reins every so often to slow down, not the kind you have to kick in the butt.
How do you motivate your managers?
Wilson: A continuing education is important. Every time I am in the store we sit down and review deals. They have objectives. The pay is decent, but we motivate them from the inside out and keep on them. I am their support network. I'm there to help.
How do you compensate your managers?
Wilson: The pay is skewed toward product sales. Our markets are rate-sensitive, so we don't make much on finance reserve. If anything, we get flat fees. They're paid commissions of 14 to 18 percent based on their store average. If dollars per vehicle retailed is $1,000 or better, they get the maximum pay.
So the pay is tied to the store average?
Wilson: It used to be tied to their individual average, but we changed it to the store average. It motivates them to help each other do well if someone has to fill in for them. They have to fill in for each other. All our F&I managers are cross-trained in each other's brands.
How do you make sure your managers present all the products on the menu?
Dagenais: We went to the MenuVantage electronic menu system three years ago. It stores the transaction. The customer has to accept or decline the products. We can go back and review what's been presented. We also compare the manager's penetration with other stores.
What is the key to your strong F&I business?
Dagenais: I'd say ethical treatment of customers and good, consistent presentation of the products.