In a Google®, MySpace® and YouTube® world, word tracks are like 8-tracks… obsolete. There are no "If I could, would you?" shortcuts when it comes to selling today's informed consumer.
F&I IN AN X & Y WORLD
- by Ronald J. Reahard
Word Tracks & 8-Tracks
X & Y customers want a hands-on, direct product contact, not someone reading the coverage from a brochure, or parroting a word track some old school F&I trainer made them memorize. They seek out knowledge and expertise, they avoid ignorance and sales pitches like the plague. They constantly multi-task, why can't you? They come in to the F&I office listening to their iPod and talking on their cell phone. They text message their friends while driving. Why can't you type up their paperwork and carry on a conversation at the same time?
X & Y customers demand proof - they want examples, not statistics. They want to be engaged and stimulated, not forced to listen to a canned pitch. Word tracks are like, so yesterday (been there, done that!) They immediately recognize video and computer infomercials for what they are- sales pitches! X & Y consumers want to be seen as a unique individual, not another mark. F&I infomercials, menu software, and tired old closes won't sell these customers anything… F&I professionals do! New Rules, New Risks
In today's litigious environment, who's got their finger on the triggering term? Payment quotes must include all terms that impact the monthly payment, including: term, APR, down payment, and amount financed! That also includes the payments shown on your menu. Keep in mind, every document leaves a paper trail. What's in your deal jacket?
When it comes to the Equal Credit Opportunity Act, Gramm-Leach-Bliley, and OFAC, you can't win, but you can lose. "Is that the best rate?" What you say can cost you! And your 4-square might get you three squares… and a cot, especially if it's designed to mislead or misinform a customer. The key is compliance. That means no packed payments, no best rate promises, no illegal ties, and a menu in every deal. Your F&I Sales Process Must Add Value, Not Aggravation
Customers are entitled to accurate, non-misleading monthly payment quotes. You need to make certain you provide them, because tonight the entire sales and F&I transaction might just be on YouTube®! Don't believe it? Type in "buying a car" on www.youtube.com.
F&I products are now available everywhere! Customers can buy a vehicle service agreement from their C.U. and Sam's Club®, GAP from their State Farm agent, and arrange their loan online. The F&I process must add value to the customer's purchase experience. That means giving customers options, not product presentations. We don't want to satisfy customers, we want to delight them! Money Follows Service Wherever It Goes
It's critical that you implement a customer-focused F&I process. Don't keep customers waiting! Bring them back to the F&I office immediately, and let them see what you're doing. It's not secret agent spy stuff we're doing back there! F&I should enhance the purchase experience, not simply prolong it. Customers want to know what their options are!
F&I must expedite the delivery process. That means they managers have to multi-task too! We have to collapse confrontation when a customer gives an objection "No problem, these are just options." We have to sell based on the customer's agenda, not our agenda. Stop selling products, start adding value! Utilize needs-based selling, not greed-based selling. That means educate and inform customers with regard to their options. Stop selling, start helping! Out With The Old, In With The New
It's also important that you continuously evaluate new F&I products. It may be time to consider dropping a product, and adding one or more products. If you regularly have less than 10% penetration with a particular product, it may be time to re-evaluate whether or not it's the right product for your market with your customers.
In addition to vehicle services agreements, GAP, and credit insurance, there are a lot of F&I products available today that are definitely worth considering, including:
What Did They Know, And When Did They Know It?
In an X & Y world, improving F&I department performance also requires that you implement a comprehensive, consistent, and compliant F&I training program. While your people may change, your process doesn't. That means an ongoing in-dealership training program, with a monthly training calendar. Professionals practice, and you need a practice schedule.
You also need to monitor performance on a daily basis. Whenever you monitor performance, performance increases. An F&I professional measures not only departmental performance as to penetrations, profits, chargebacks, and customer satisfaction, but also personal and lender performance. Do you know what your penetration percentages are, your profit per retail unit, and how that compares to last month and last year? Do you know how many deals you sent to each lender? What is your look-to-book ratio and portfolio mix at each lender, and how does that compare to what they need? One of the best ways to improve performance is to record and evaluate actual F&I presentations. The camera is a terrific way to evaluate your presentation, and determine what's working and what's not working. Are you doing sufficient needs-discovery? Did you have a conversation with the customer, or make a presentation? Did you use visual aids to help them see the need for your product? The great thing about training is you can see the impact on your financial statement each month! Finally, every F&I manager in the dealership should be AFIP Certified! An F&I professional must be familiar with, and comply with, all the laws that impact F&I on a daily basis. 18 Action Ideas Guaranteed To WOW! Customers
Ron Reahard is President of Reahard & Associates, Inc., an F&I training company providing F&I classes, ongoing in-dealership and online training. Ron conducted the F&I Workshop "F&I in an X & Y World" at the 2008 NADA Convention in San Francisco. He can be contacted at 866-REAHARD, or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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