$1500PRU: It Ain’t Rocket Science!

By Ronald J. Reahard

“Ability is what you are capable of doing. Motivation determines what you do. Attitude determines how well you do it.”
- Lou Holtz

Whenever we talk to dealers and F&I managers about the need to implement an ongoing F&I training program, eventually they all ask the same question. “What do you think is a good job in the F&I office?” Usually, they want us to confirm that their F&I department is already doing a great job, or that their numbers are already well above average. “Why should we spend money on training when we’re already doing a great job?”

According to the 2005 F&I Statistics on F&I Management & Technology’s website, (www.fandimag.com) the average F&I Income Per Retail Unit ($PRU) in ‘05 was $445PRU on New Vehicles, and $632PRU on Used vehicles. Some dealers, and a lot of F&I managers, genuinely feel as though they’re doing a good job because they routinely exceed those averages. As long as they’re above “average,” there is probably not a lot of room for improvement, and no need for additional training.

Yet the top dealers in virtually every 20 Group exceed $1000PRU in F&I income, and almost every dealer we work with expects their F&I department to be at a minimum of $1000 per retail unit. In fact, each month in dealerships all across the country there are F&I professionals that routinely achieve $1500PRU! How is that possible, when the national average is closer to $500?

It ain’t rocket science!

Achieving consistent and spectacular performance in the F&I office requires an F&I professional who is sincerely excited every day about the prospect of helping customers, not selling them something. It requires a contagious, positive attitude. Someone who has fun with customers, who truly likes people, and is genuinely committed to improving their ability to help customers every day. It requires someone with integrity, who is honest, and ethical in everything they do. But it also takes hard work; preparation, product knowledge, enthusiasm, belief in your products, setting individual goals, caring about customers, and daily practice. There are no “If I could, would you?” shortcuts when it comes to achieving $1500PRU in F&I income!

Preparation

Many F&I managers will never achieve $1500PRU because they don’t have the ability to help enough customers see the value of their products. They never learn enough about the customer to show them how a particular product will benefit them specifically. If you want to run $1500PRU, you first have to be prepared to achieve it. That preparation includes outstanding needs discovery. Needs discovery is the foundation upon which an F&I professional must build every product presentation.

F&I professionals who run $1500PRU don’t achieve that level of performance because they memorized countless word tracks, have honed their pitch to perfection, or use logic traps to wear down a customer’s resistance. Today’s informed consumers buy F&I products because of what those products will do for them. An F&I professional must first discover a need that each of their products will fill, or a problem it will solve, so there is basis for a discussion of that product with the customer.

To do that, an F&I professional must utilize open-ended questions and engage the customer in a dialogue that will enable the manager and the customer to answer that all important question; “Why does this particular customer need this particular product?”

Product Knowledge

In the F&I office, the greater your product knowledge, the greater your confidence and credibility when discussing a particular product with a customer. F&I professionals that achieve $1500PRU have exceptional product knowledge. Exceptional product knowledge increases the customer’s need for their expertise as they try to decide which, if any, F&I products will benefit them. The more you know about your products, whether that product is tire & wheel road hazard, GAP, or environmental protection, the better able you will be to relate how that particular product will benefit this particular customer.

Want to sell more vehicle service agreements? Learn more about vehicles and the various components covered by your service agreement. If you don’t know what a throttle position sensor is, what it does, what happens when it fails, and how much it costs to fix, it’s difficult to convince a customer they need to buy a service agreement because a throttle position sensor is covered by the VSA.

If you want to run $1500PRU, you must take every opportunity to expand your mechanical knowledge of vehicles on a daily basis. Product knowledge increases your creditability, believability, and the customer’s reliance on your expertise. An additional bonus is that the more you learn about vehicles, what various components do, why they fail, and how expensive they are to fix, the more you realize how important a VSA is with today’s increasingly sophisticated vehicles.

Enthusiasm

Not only must you have product knowledge, but you must also be enthusiastic about the outstanding value of the products you have to offer in the F&I office, and share that excitement with the customer and everyone in the dealership. Every salesperson, every manager, and every customer has to know that you are genuinely excited to have an opportunity to help people by finding and filling their need for F&I products.

Whether you’ve been an F&I manager five months or fifteen years, every day you still make a choice. Either you’re going to be enthusiastic about the challenges and opportunities you will face today in the F&I office… or you’re going to feel sorry for yourself because the credit union has lower rates, State Farm is selling GAP, and they can buy a vehicle service agreement at Sam’s Club for less money.

Every customer deserves a knowledgeable, enthusiastic presentation. The more enthusiasm you have for your products, the more interested customers will be in hearing about those products. The more you learn about your products, the more you will believe in those products, and the more enthusiasm you will have when you discuss them with a customer. Enthusiasm without knowledge is drivel… but knowledge without enthusiasm is boring.

Believe In Your Products

Achieving $1500PRU in the F&I office requires that you truly believe in your products, and clearly demonstrate that belief through your words and actions on a daily basis. If you don’t really believe in the products you’re selling, then go sell something you do believe in. If you believe in pizza, maybe you ought to go make pizzas!

F&I Professionals believe in their products… and they demonstrate that belief by buying what they sell. If you sell Nissans, you should drive a Nissan. It’s hard to sell Nissan’s if you really believe Honda builds a better car. And it’s extremely difficult to sell credit insurance, window etching, or paint sealant if you don’t believe in it. If you don’t buy the products you sell, you’re essentially telling every salesperson in the dealership you don’t actually believe in these products, you’re just trying to make money off their customers. That is not an F&I Professional. That’s a hypocrite.

Set Goals

F&I performance does not get better because you want it to, or because you hope it does. It gets better because you have a plan. Having a goal of $1500PRU demands that you establish a plan of how you’re going to get there. Your intermediate and long-term goals must be specific, measurable, and attainable! Goals provide a framework for increased productivity, personal growth, and job satisfaction. F&I excellence begins with establishing daily, monthly, and long-term goals that are measurable and have a specific objective.

Goals must also motivate you to achieve them, which means they have to be realistic. You can use your own past performance, industry averages, and comparable dealerships to determine if your goal is realistic. Initially, your goal may be to achieve 1.5PPRU (products per retail unit) and $1000PRU. As performance improves, you can stretch a little farther each month until you achieve an average of 2.5PPRU and $1500PRU. (See Sample Goal Sheet.) Winners set goals. Losers make excuses. It’s foolish to set a goal if you don’t honestly believe there is any chance you can attain it. F&I professionals who achieve $1500PRU concentrate on planning and making every moment count as they improve skills in their effort to reach progressively higher intermediate goals.

Care About The Customer

Achieving $1500PRU requries that you care about the customer across the desk. As Zig Ziglar says, “People don’t care how much you know, until they know how much you care.” Caring demands that you seek out, with eagerness, reasons why the customer needs each and every one of your products. It requires that you listen to customers to learn their wants, needs, and concerns. Caring means that you encourage customer questions, so it’s a conversation, not a presentation.

Caring requires selling every product from a position of strength by concentrating on what is truly best for the customer. Caring means that you have a genuine desire to help customers… not sell customers. Caring means that you never forget that your job in the F&I office is NOT to make money. Your job is to help customers… because the more people you help, the more money you make!

Practice!

Finally, achieving $1500PRU requires the strength of will to force yourself to pay the price of success. Do what you should do, when you should do it, whether you want to or not. Your success as a Financial Services Professional depends to a large degree upon having the self-discipline to organize and prioritize your daily activities to include at least 20 minutes a day to practice. Review your product benefits, your needs discovery questions, and practice using visual aids to overcome objections. Professionals are never satisfied with their current performance, but are committed to becoming 1% better every day.

F&I, like any sport or occupation performed at the professional level, must be studied and practiced daily. Every customer is unique, and has unique needs. To ensure every customer receives a thorough explanation of their options in a minimum amount of time with a maximium chance of F&I product sales, the financial services process must follow an organized, consistent format. Yet each product presentation must be tailored to the customer’s unique needs. That takes practice. Daily practice.

Your daily practice should include a review of open-ended questions that discover customer needs for various products, drills and self-testing that ensures continuous improvement in your product knowledge. Painting pictures with words to help customers “see” themselves in a situation where they would benefit from having a particular F&I product. Your daily practice should also include rehearsing/role-playing your presentation to improve your ability to respond to customer concerns, overcome objections, and deliver a customer-focused, needs-based product presentation. Achieving $1500PRU requires that you first prepare to succeed, and have the discipline to practice every day.

Outstanding F&I performance requires preparation, comprehensive product knowledge, genuine enthusiasm, and a sincere belief in your products. It means setting specific, measurable and attainable goals. It also requires that you truly care about the customer, and that you practice on a daily basis. Achieving $1500PRU is not easy, but it ain’t rocket science!