My friend’s older home pops circuits whenever too many appliances are drawing amperage together at one time. Plug in the toaster and the wife’s hair dryer quits. Run a power drill and the sump pump fuse kicks out.
Some dealerships’ F&I departments operate similarly to my friend’s house. Outdated methodologies limit efficiency, profitability and customer retention stickiness. Use of old-school F&I practices can stand in the way of the dealership’s ability to maximize the potentials available. Outdated F&I practices can:
- Create a less comfortable environment for consumers in which they want to do business.
- Take too much time for F&I managers to prepare the right products presentation for the particular customer, one that offers the solutions the customer will likely perceive as being of value to him or her and want to purchase.
- Harm retention by creating a “pushy selling” environment most customer find distasteful.
- Weaken profits by preventing the F&I office from achieving its potential per-vehicle retail and penetration profitability.
- Drain commission dollars that otherwise might flow to the F&I manager’s compensation.
Upgrading the wiring in my friend’s home would improve home life there (not to mention safety). Likewise, upgrading the F&I practices in a dealership to new standards would return numerous benefits.
Furthermore, with frayed wires and outdated circuits upgraded in the home (as well as the F&I office) more juice to power more appliances and tools is then available that will make the homeowner’s (and F&I manager’s) life a little easier and safer.
However, new appliances and new tools are only beneficial where measurable results are the consistent outcome. What I mean is, new F&I tools and practices should not only help the dealership increase per-vehicle gross, but innovations and new processes should also stimulate other micro-changes that result in increased productivity, customer retention and profitability.
This is just what new F&I tools and processes are doing for dealerships. An example is at Klick-Lewis Chevrolet-Buick, Palmyra, Penn. The dealership recently started using F&I menu software and F&I compliance tools. “We increased gross profit per car $300 when we started using an F&I process that ensured consistency and accountability,” says Dealer Principal and President Warren Lewis. “The process helps us make sure that every customer is understood. That is, it helps us to understand what is important to them and how to properly offer the accurate F&I products for them, given their unique driving circumstance,” he adds.
It is consistency like this in the F&I presentation that establishes trust and confidence in the F&I process and the products offered. This trust it fosters extends to the F&I manager, and to the level of satisfaction that customers carry off with them once out of the finance office and into their new vehicle. Where these experiences are missing, dealership customer retention suffers! “One of the main focus areas of our dealership is customer retention. Retention requires consistent application of processes across the store,” notes Willis, “and our F&I experience is the one area that is easier for us to manage outcomes because of the F&I software tools we use.”
Connect more ‘appliances’
F&I tools like e-menu software are like an electrical power strip for a dealership. They enable all sorts of other “appliances” to be connected. For instance, dealers in a recent study by MaximTrak said F&I menu software helps them observe and manage for peak outcomes, including:
- Penetration by product
- PVR by sale
- Identify staff members doing a great job selling in all key categories (or not, but report data helps management identify opportunities for improvement)
Ron Green, GM and VP for Safford Chrysler-Jeep-Dodge-RAM, of Springfield, VA, upgraded his dealership to new F&I technology. “My main driver for bringing this menu system into our store is my belief in full disclosure, ensuring we performed a complete and legal presentation with every customer,” he said.
“Our per back-end gross on every car through our F&I office, since adopting this menu system, averages $1,072 per vehicle,” Green says. “Since we’ve been using the MaximTrak software to guarantee compliance in our F&I processes, our warranty penetration, GAP and prepaid maintenance product sales have all gone up as a result.”
Software-driven F&I processes also provide dealers valuable insight into F&I performance on many levels. “All four or our F&I managers are held accountable for performing every F&I presentation with complete consistency and compliance and the report I get from MaximTrak helps me keep them fully accountable to this goal,” Lewis of Klick-Lewis says. “With it, I also can see how both my F&I and sales teams are doing, individually and in aggregate, month-to-month and year-to-year. I can see who is selling what – or not – and then make changes or suggestions to help us maximize all opportunities.”
We renovate and remodel homes to raise their levels of safety, usefulness, resale value, and even curb appeal. In many similar ways, modernizing the F&I department with new F&I menu technology helps a dealership:
- Manage and mitigate compliance risk
- Improve presentation productivity and product value to the customer
- Improve profitability
- Elevate customers’ satisfaction with the F&I process, fostering the right kind of early engagement to retain customers’ business through many buy cycles!