With margins routinely squeezed on new vehicles, many dealers are relying on F&I sales to drive profits, but customers are often skeptical of the value of F&I products. By introducing those products on the showroom floor or in videos, dealers can educate customers on product value before they step into the F&I office.
More often, dealers have been holding the F&I product discussion on the showroom floor, said Eric Fifield, executive vice president of sales and acquisitions strategies at EFG Cos.
Salespeople should mention products as the customer walks through the showroom or does a test drive, and as the customer sits in the waiting area, dealers should play informational videos, he said.
“Video is one piece of that,” he said. “It’s just another tool or aid that helps with that transaction.”
A low-pressure video plants the seed with the customer, he said. “You’re tapping into getting the customer to think about … protecting their purchase.”
If customers already have been learning about service contracts, GAP protection, prepaid maintenance and ancillary products for 15 minutes, when the F&I manager begins the product conversation, it has become more familiar.
“It’s not a brand-new process,” he said. “They have been hearing it a couple times throughout the transaction.”
Most customers don’t want to watch a video of someone selling them something, said Dave Robertson, executive director of the Association of Finance & Insurance Professionals, but if the video is “properly crafted about customer care at the dealership … it’s an effective way to make a segue” from sales to the F&I office.
When dealers can explain the product visually before the buyer goes into the F&I office, “The customer has already been exposed to what these products are in a nonthreatening, casual environment,” Robertson said.
The introduction to F&I should happen when the customer agrees to buy a vehicle, said Marie Knight, vice president of strategic relationships at Zurich North America. The F&I manager should conduct a brief interview at the sales desk. Later, while the manager gets the paperwork ready, Knight suggests he or she play a product video in the F&I office. It keeps customers engaged, and if they have a question, the F&I manager is there to answer it.
“There is a lot of information given to customers in a very short amount of time,” Knight said. One of the benefits of giving them information early is that it “gives them a minute to review information outside of the pressure of the finance office and allows them an opportunity to do that without a salesperson.”
F&I product penetration increases and chargebacks decline when dealerships use informational videos, she said.
The next step is dealers putting those videos on their websites, Fifield said.
For example, Davis-Moore Auto Group in Wichita, Kan., features videos on ancillary products, GAP and service contracts on its website.
“It’s the next evolutionary process,” he said. “Customers are looking for solutions when they’re buying a car; they’re looking for what type of value do I get with this large purchase?”