Unlocking new opportunities in F&I with digital retailing

To contend with the pandemic, dealers have embraced digital-retail processes much faster than otherwise expected. And they’ve greatly benefitted finance departments by speeding up the F&I process – long a notable pain point for consumers. What makes digital F&I processes better than traditional methods? Do dealerships that successfully adopt these processes share any common traits? And could these digital processes potentially even make F&I managers obsolete? A panel of industry experts – Jonathan Jordan from JM&A Group, Scott Penn from EasyCare, a APCO Holdings Brand and Jeff Strickland from Assurant – offers some penetrating insights and analysis as they answer these and other questions.

Q: What are some of the hurdles dealers face when trying to move consumers to an online F&I process?

Jonathan Jordan: The good news is that in today’s environment, consumers already are more accustomed to buying products digitally or via video-conferencing software. In some cases, the hurdle may be getting F&I managers and other team members comfortable interacting with consumers and selling in a virtual environment. While implementing a new process change at dealerships can sometimes meet resistance, with proper training, virtual F&I provides numerous advantages. For example, giving car buyers a customer experience that exceeds their expectations may even lead to greater long-term loyalty and engagement. Our experience has shown that moving F&I into a virtual environment is not just about digitalizing the menu. Dealers also must focus on removing the friction points in the process by first listening to their customers. Secondly, they must provide an opportunity to engage with the consumer where they want to be and increase the level of communication at every level of the process.

Jeff Strickland: Dealers aren’t trying to move their consumers online, they’re developing omni-channel experiences that meet consumers where they feel most comfortable. The pandemic accelerated this change, which already was underway, so dealers had to move quickly, developing approaches that meet the needs of customers – whether in the more traditional in-person F&I experience or via an online process.

Q: Why are digital F&I processes better for consumers – what pain points have they resolved?

Scott Penn: Digital F&I processes give consumers the three things they want most when buying a vehicle: transparency, convenience, and speed. Survey after survey shows that consumers are most frustrated with the parts of the sales process that take up the bulk of their time, are the hardest to understand and impact their budget the most. Adopting a digital strategy that helps educate consumers about their F&I options, allows them to ask questions on their own time and gives them an express route to purchase and delivery can alleviate some of this frustration.

Jordan: It has enabled a flexible car-buying experience and faster customer service, regardless of whether the transaction is online or in-store. The most exciting part is now the process can be completed even when the customer and F&I manager are in different locations. Having a virtual process offers an on-demand, customer-centric F&I delivery, but you still can provide the same personal touch a buyer would receive in person. It also allows dealerships to close out the vehicle sales process quickly and efficiently, minimizing the time it traditionally takes to complete a deal, creating a much better car-buying experience for the consumer.

Strickland: First, I think we need to define what we mean by F&I processes. In the traditional F&I process, there are ways that dealers can use digital tools to make the experience faster and easier for their customers. One of the biggest pain points consumers cite is the time it takes in the F&I office. Dealers can leverage digital solutions to speed things up and help educate consumers about the benefits of products earlier in the sales process, including having product information on their website or in their digital-retailing platforms. As we all know, an educated consumer is more likely to make purchases.

Q: What are some common traits/attributes you see at dealerships that successfully transition to digital processes?

Strickland: It all begins with knowing your customer. At Assurant, we have years of experience with online consumer journeys built around protection products. So we continue sharing these best practices to help our dealers create optimal online experiences. Successful dealers are focused on developing a seamless shopping experience, where customers can start and finish online, or step off at any stage in process. Ensuring the entire staff is trained to manage a customer that might have started their journey online, but didn’t finish it there, is critically important; you don’t want them to have to start from scratch when they enter the dealership.

Penn: The dealerships that have been the most successful recognize that digital processes don’t only have a place in the F&I office. When I work with dealerships that thrive by using digital retailing, they have a common goal: to create a better customer experience from start to finish with the help of technology. Digital platforms give customers more control and dealers that use technology to their advantage have a leg up on the competition.

Jordan: The technological component involves creating consistent processes across your online and in-person approach, with reliable and actionable data collection and analytics. This involves optimizing your website and creating channels your team will use to communicate with customers. The people side of the equation involves training for your team, especially F&I managers, but also other individuals involved in the sales process. This ensures they understand the best application of virtual F&I. Additionally, having a customer-centric mindset throughout the dealership is key to a successful transition, with the fundamental belief in that what’s best for the customer is what’s best for the dealership.

Q: Despite the margins dealers are seeing on new-vehicle sales this year, the F&I process is still a huge profit center for stores. What do you say to dealers who are worried about losing control of the F&I process by moving it online?

Jordan: F&I managers can take advantage of these convenient and data-driven virtual conversations to make critical upsells, laying the groundwork for future fixed-operations and service profits. This is a crucial step in creating a customer relationship, building trust, and maximizing the opportunity to increase profit margins at key opportunities. In addition to upsell opportunities, dealerships can use virtual F&I as a tool to potentially engage customers who may resist traditional in-person sales processes. In general, customers across nearly all segments of retail favor a convenience-first model that focuses on speed and limited need for in-person dealings. While auto retail has largely been behind this trend, there are clear benefits to getting on board with it to help dealers retain customers who may otherwise disengage from the purchase process. In fact, we’ve seen some dealers produce higher profit per vehicle by using virtual F&I processes than in-person deals delivered by the same business managers.

Penn: I’ve seen enough evidence to say that many dealers who incorporate a digital F&I process are just as profitable, if not more profitable, because of the changes they’ve made. If you’ve adopted a transparent and convenient model that gives customers more control, scheduling a virtual presentation right before they pick up their new car takes some of the weight off the traditional process. There’s a case to be made that if the customer doesn’t have a long wait in the showroom to get their trade-in evaluated, get their credit submitted and all their paperwork prepared, they may be more open to learning about and purchasing additional products. Your menu presentation is no longer just one more thing they must sit through before they get the keys.

Strickland: Implementing the right processes, along with leveraging best practices, will help the dealer maintain control. If the digital process is simple and well managed and F&I managers are held accountable, profits should potentially increase. Once again, dealers that are willing to integrate F&I earlier in the sales process not only have more success, but also generate greater profitability. We’ve been focused on making sure our dealers understand best practices related to showcasing our products and have the right assets to leverage them with consumers online.

Q: With all these changes, is finding a point of engagement with the customer – either virtually or in person – even necessary? Do dealership staffers even need to be involved?

Penn: You still need a human being behind the software to make sure that you’re maximizing your sales opportunities. These systems are very effective lead-generation tools, so it’s just as critical for a qualified salesperson to get involved and solve the pain point that made the customer leave the virtual process. The concern has switched from the marginal pressure of losing gross revenue to making sure that all leads get worked completely. There’s an art to making sure you find the best deal for your customers. No system is 100 percent capable of doing that for every sale – customers with credit issues, trade-equity issues or problems with their trade-in value need an advocate in the store.

Strickland: Dealership personnel absolutely still needs to be involved. At Assurant, we have created consumer journeys and training, from store leadership to the digital-marketing manager, that helps everyone involved adapt to the changing landscape. Developing omni-channel experiences where consumers can move easily between communication channels – from digital and in-person – is how dealers will win customers and grow in the future.

Jordan: Even though virtual F&I is a new spin on an important and traditional part of the car-buying process, it doesn’t have to be a disruptive force in the dealership. In fact, it can fit neatly into F&I managers’ current responsibilities, enabling them to increase their reach with customers. When team members have the right training for how to execute virtual processes effectively, they can engage with customers who prefer a streamlined, online transaction style as well as in-person sales at a store. Maximizing the value of virtual F&I requires alignment between a dealership’s online resources and the in-person experience. This is a good thing for dealers, as such alignment will enhance the customer experience – and the buyer’s overall journey. Consumers today have become used to connecting with brands online and in person while receiving seamless, consistent service. Delivering this level of excellence is a goal any dealership should aim to achieve.