Each week, the F&I Report features a savvy tip from an industry expert. Last year, experts weighed in on emerging technologies, combating customer objections and coping with rising interest rates. Here's a sampling of our 2018 F&I tips and the month in which each appeared.
Use customers' F&I research as a sales tool
Compliment customers when they come in armed with third-party research on F&I and use it as a sales tool, suggests Ron Reahard of Reahard & Associates. "If a customer sees it on the Internet, it gives you third-party credibility." It's not just the F&I manager suggesting the product; information on a third-party website may persuade the customer, too.
F&I interviews offer big pluses
Despite pressure to hasten the deal process, keep the F&I interview in place, suggests Steve Roennau of EFG Cos. Skipping the interview can hurt profit per vehicle and product penetration. Plus, the interview can actually speed the process, he said. "When an F&I manager can directly relate a product's benefits to a customer's specific needs, they can more quickly and efficiently overcome objections and close the deal."
Train sales staff to gauge customers' budgets
Make sure your sales team knows how to fit the car to the customer in terms of affordability, suggests Hollis Goode of EFG Cos. "Train your team to ask qualifying questions about the customer's driving habits, employment status and ballpark the budget before test driving a vehicle," he said. That way, customers won't be disappointed when they arrive in F&I and discover they can't afford the payments.
Pair products on the menu
F&I menus should pair items that go well together, suggests F&I trainer Chari Fogel. For example, the maintenance agreement should follow the service contract, and tire-and-wheel should follow the maintenance agreement. "The presentation itself needs to be transparent, filled with value and benefit that will help the customer see that it's important for them to protect their ownership period by enrolling in these products."
Partner with vendors wisely
Choose vendors that already have skin in the game, suggests Phil Battista, CEO of dealership vendor Darwin Automotive. Conduct due diligence by checking the size of a vendor's staff and client base. Talk to other dealers and call a vendor's support line. "Select someone for what the market is going to bring," he said. "The vendor selection piece is so critical."
Put your finance director front and center
Get F&I managers involved in the deal early, says Michael Lucia, general manager for Mercedes-Benz of Pompano in Pompano Beach, Fla. "Take away your finance director's office and make them sit on the desk of your sales managers," he said. Old-school dealerships keep F&I managers behind a curtain, but Lucia says they should be front and center, helping sales managers when appropriate. "You walk into the dealership, you meet my manager."
Help customers do the math
Part of an F&I manager's job is to be a calculator for customers, says Adam Marburger of Suntrup Automotive Group. Cash or finance customers turn down a service contract when "they don't know how to do the math." Walking customers through savings is important not just for product sales, Marburger said, but "because the car is worth so much more with the service contract."
Consistency: The keeper of compliance
To ensure your store is compliant, keep F&I product discounts consistent, suggests Deanna Stockamp of Stockamp & Brown law firm. "There's nothing wrong with offering a discount because a customer purchased more than one product or a bundle of products," she said, "so long as you're offering those discounts to all of your customers."
Explain how F&I products benefit lease customers
Remind lease customers of their primary responsibilities: making payments, maintaining the vehicle, keeping insurance in force and returning the vehicle in satisfactory condition, said F&I trainer Gerry Gould. Then explain how F&I products can help in a reactive or proactive way. "Reactive includes product that pays for the repair or replacement as the lease matures, while proactive pays for excess wear and use at the lease end."
Let customers see whom they'll work with
Put the F&I manager's name, photo and contact information on the dealership website, suggests Ron Reahard of F&I training company Reahard & Associates. "We shouldn't be hiding behind a curtain. We're not the F&I wizard, the Wizard of Oz. We should let customers see who they're going to be dealing with."
Show, don't tell
Don't lecture customers on interest rates. Show them, says Matt Woods, south regional manager for Service Group. "Go to Google, type in 'Fed raises interest rates.' You will find several articles," Woods said. Print one that's dated within the last few months and explain that while you don't control interest rates, you can work with them to get them the best deal.
Trust your training
Trust your training, advises Eric Melon, president of sales at Innovative Aftermarket Systems. If a certain tactic works half the time in the F&I office, why do managers give up? "Half the time in 100 times is 50 people say yes," he said. "The problem is, we don't know when that 50 is. First customer, doesn't work. Second customer, doesn't work. By the fourth time, what happens?"