Selling F&I products at Jeff Schmitt Auto Group is not for the faint of heart. That's because there's always someone poised to replace you.
"If somebody's numbers have fallen in finance, they know there is a talent pool of aggressive salespeople who want their job," says Steve VanGorder, 38, general manager of the seven-store group based in Fairborn, Ohio. "They're held accountable. The ones who really like to be held accountable are the good ones."
And those who fail to make the grade end up back on the sales floor.
VanGorder's system is tough. It hinges on a list of salespeople who have been F&I trained, tested and evaluated and who are eager to move into a lucrative job in the F&I department. If one of the group's 18 finance managers fails to meet his or her F&I targets, that finance manager is out and a salesperson is in.
VanGorder developed the system about six years ago when he took over as the company's general sales manager. He got the idea while visiting a dealership group that had strong F&I sales. "That opened my eyes to what was possible," he says.
VanGorder keeps the company's specific targets for F&I managers close to his vest. But customer satisfaction scores and product penetration rates are factors, he says. He also won't say how long a manager must underperform before being notified of the company's dissatisfaction or how long that manager has to improve before returning to the sales floor. But he says that once a manager is told there's problem, it usually gets fixed.
VanGorder's methods have been effective. Before he instituted the list six years ago, the group's average F&I revenue per vehicle retailed was $700 to $800. Now it's $1,600 to $1,700, and the average F&I penetration rate is 85 percent, VanGorder says.
By contrast, the industry average F&I revenue per vehicle retailed through April this year was $869, and the average F&I penetration rate was 75 percent, according to Paul Faletti, CEO of NCM Associates Inc. in Overland Park, Kan.
Jeff Schmitt Auto Group's seven Dayton-area dealerships sell Buick, Cadillac, Chevrolet, GMC, Mazda, Mitsubishi and Nissan vehicles. The stores sold about 7,800 new and used vehicles combined last year and are on pace to sell 10,000 units this year, VanGorder says.