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F&I Departments: Battle for UPS Goes Online

admin — Fri, 04 Jun 2010 22:42:44 +0000

Your sales and F&I departments are supposed to be on the same team. Unfortunately, you wouldn’t know it in many dealerships. That’s because there is virtually no communication between managers before, during or after a deal goes to F&I. To take sales and profits from “woe” to “WOW!” in 2010, the F&I department has to upgrade its level of service from 3G to 4G — the next generation of selling F&I products.

This upgrade requires F&I to become more than just a secretarial service for the sales team. It requires F&I managers to get involved early in the sales process and step up, not back, when there is a tough deal or difficult customer. They must view themselves as financial services specialists who genuinely believe in their products. Most of all, next-generation F&I managers must be team-mates with the sales department, not adversaries.

Can You Hear Me Now?

The first generation of F&I began in the ’70s, when the F&I function first became a separate department. Back then, the F&I sales process was based on assumptive selling. Managers in this decade were simply required to include the products in the payment and hope the customer didn’t notice. If they did, they were to assume the sale.

You might hear a F&I manager say something like, “It’s a standard contract feature that’s provided for your benefit.” If the customer objected, the F&I manager would defend the products, overcome the customer’s objection, and again assume the sale. In the ’80s, complaints forced dealers to move to the second generation of F&I: step-selling. With this technique, customers were forced to endure multiple features/advantages/ benefits presentations for F&I products they had expressed no interest in purchasing. Every customer heard the same memorized pitch. Objections were overcome with “logic traps” designed to get the customer to say “Yes,” as saying “No” would clearly indicate he or she was stupid.

The ’90s brought us F&I 3G, also known as menu selling. As penetrations declined and the need for F&I income increased, dealers began to expand their product offerings. Not only did the F&I menu allow for these additional products to be offered, but it also shortened the presentation time. Menu software providers created even more sophisticated programs that allowed managers to create and tailor packages to each customer’s needs. Unfortunately, many companies simply inserted a menu into their existing process and kept right on step-selling.

As we begin the new decade, it’s time to upgrade your department to F&I 4G, or what is called customer centered selling. If you’re not truly trying to help every customer, you’re costing your store sales and F&I income. Preventing those losses is a shared responsibility for the sales manager, the Internet manager and, of course, the F&I manager.

Satisfied Customers Don’t Come Back

Focusing on customer satisfaction does not mean asking customers to check the “Completely Satisfied” box on their survey report, because doing so is like watching the scoreboard instead of the ball. Today, we can’t afford to have any customer walk out of the dealership — or the F&I office — saying to themselves, “Well, that was satisfying.” Remember, customer satisfaction is really the lowest rung on the ladder, as every customer should at least be satisfied with their purchase experience. But merely having satisfied customers doesn’t guarantee they’ll come back, or that they’ll refer your dealership to their friends.

I recently saw “The Blind Side,” a movie based on the true story of Michael Oher, a young man who, with the help of a caring woman and her family, overcame early traumas and homelessness to become an All- American college football player and fi rst-round NFL draft pick. It was the kind of movie I just had to tell others about in the hopes they’d see it, too. The same goes for a dealership’s sales process: When an individual wants to call his or her friends to tell them to go see a movie, you know he or she were WOW!’d by the experience.

If you want to succeed in the competitive months ahead, you better be focused on WOW!ing customers, not on getting them to check the right box on some survey. Today, we need customers walking out of the dealership going, “WOW! That wasn’t what I was expecting! What a great place to buy a car! I have to tell everybody what a great experience I had at this dealership. They need to go buy a vehicle there, too!”

Changing the customer’s perception of the dealership’s sales and financial services process requires changing the experience. We have to WOW every customer in every dealership interaction, and a customer’s purchase experience begins with their initial contact. Whether that happens by phone, online or in person, the customer’s WOW factor is determined by the ease of navigating the dealership’s sales process, their experience in the finance office, vehicle delivery and follow-up efforts.

The ‘Mother’ Test

If you wouldn’t put your own mother through your dealership’s sales process, you need to change it. To WOW customers, you need to be easy to do business with. That means selling to customers the way they want to buy. Stop making customers wait while you load their information into the computer. Stop forcing customers to listen to memorized word-tracks and sales pitches for every product you offer. Stop making customers watch infomercials for products they have expressed no interest in, and stop using old-school manipulative sales techniques and self-serving processes.

Instead, create an atmosphere that ensures every customer has an enjoyable, stress-free experience. In other words, make buying a car at your dealership fun, not an ordeal. Stop wasting customers’ time by making them listen to a product presentation they have no interest in hearing.

The key is to converse with your customer about their options, while the goal is to make them thirsty for your knowledge. When customers have an objection, avoid the confrontation by recognizing their concern and demonstrating empathy before relating a feature or benefit t that applies to their situation. Selling F&I products is not about outsmarting customers, it’s about giving them the information they need to make better decisions.

Leader vs. Hypocrite

Like it or not, co-workers and customers will believe what you do long before (and long after!) they believe what you say. Too often, managers will say one thing but do another. True leaders lead by example. They believe in what they say, live by what they believe, and become successful because their actions clearly demonstrate their values. Remember, the attitude of the team refl ects the leadership of the coach.

Your sales force will know by your words and actions whether you truly believe in your products or if you’re just trying to squeeze a little more money out of their customers. To be a F&I professional, you must possess the qualities of someone worth following. You can always tell you’re in the presence of a F&I professional by the way he or she treats his or her customers and co-workers. A F&I professional’s primary goal in every interaction is to help the other person.

Every F&I product we offer has real value for the customer, and F&I professionals must continuously reinforce that fact. The sales department knows right away whether or not a F&I manager believes in his or her products by the number of products he or she personally owns. If you don’t invest in the products you sell, you’re telling every salesperson in the dealership that you don’t see the value. That means you’re not a leader, you’re a hypocrite.

WOWing the Team

F&I 4G requires that the finance office serve as a valuable resource to customers, salespeople and lenders. That means F&I managers must be an integral part of the credit evaluation process, not secretaries who merely submit the deal or rehash it after it’s already been submitted by the sales manager. The sales and F&I departments have to be part of a delivery team. And everybody on that team has a responsibility to make sure every vehicle sold gets delivered.

A F&I professional has a responsibility to the dealership, the sales department and the customer to obtain an approval for every deal possible. That requires that he or she review the credit application and credit bureau report with the customer prior to submission to a lender. The purpose of the customer interview is to learn about the character and capacity of the customer. That information can shore up any weakness in the customer’s credit history or the deal itself.

The customer interview is also the F&I manager’s opportunity to build a case as to why the paper buyer should approve the loan despite any derogatory items. A paper buyer is much more likely to approve a deal or give you a way to get an approval if they see that you’ve researched and documented the customer’s situation.

The customer interview is also an opportunity to learn if he or she has any additional income and whether or not the credit bureau report is accurate. Remember, complete and accurate information is critical to building a case for lender approval, but only the customer can explain the circumstances surrounding his or her current financial situation and credit history.

The emphasis throughout the interview should be on helping to secure acceptable financing. The customer must verify the information on his or her credit bureau, clarify any discrepancies and provide additional information and insight into any previous credit problems. A customer interview should never be an interrogation; it should be a discussion on his or her past credit history. Telling the customer in advance what areas need to be discussed and why it’s important to a lender helps him or her understand the credit process. It also reinforces the feeling that you are acting in his or her best interest.

Taking a walk on the WOW! side requires that F&I managers be an integral part of the sales process. They also must be focused on helping customers, not on selling stuff. F&I professionals also have to genuinely believe in their products, and WOW their team by helping to ensure every vehicle sold gets delivered. F&I 4G requires taking a walk on the WOW! side through a renewed commitment to helping customers and everyone on the dealership team.

Hitting Home Runs in F&I

admin — Wed, 06 Feb 2008 03:28:33 +0000

Excelling in F&I means you’re skilled in several areas. Being a strong closer may mean more products sold, but having weak needs discovery skills translates into higher charge-backs and low CSI scores. The opposite is just as frustrating. You may be gifted in discovering why a customer needs your products, but without the ability to close the sale, you will perform at below-average standards.

Throughout my career as a training consultant, I’ve identified four areas where F&I professionals can and should excel.

So, let’s take a run around the bases.

First Base: DEVELOP A CONSISTENT PROCESS

A process that consists of effective and informative steps and is followed consistently with every customer will produce extraordinary profits. You cannot just “wing it” when you bring a customer into the F&I office. You must utilize a process that focuses on discovering what a customer needs, not what will make you the most profit.

Today’s consumer is better informed and less tolerant of a pressure type sales pitch. People hate being “sold” anything. But they will buy more than you could ever sell them if they realize why they need it. Selling intangible products demands that we help the customer “see”the benefit of a vehicle service agreement.

For instance, a father will be much more likely to buy a VSC for his daughter’s car if he can picture her on the side of the road waiting for assistance because the engine control module failed. The roadside assistance benefit of the VSC will provide police protection when she is in an unsafe place until help arrives. Paint a picture with words so they can see it happening. Develop a process that identifies needs, projects concern for the customer’s situation and then serves the customer by matching up the two.

Second Base: PRODUCT KNOWLEDGE

Every F&I manager should engage in extensive and ongoing research into the products he or she offers. The more knowledgeable you are about a product, the more you will believe in those products, and that translates into more products sold.

You will never get to second base in F&I unless you consistently learn everything you possibly can regarding the products you offer. You must know what your products cover: the limitations, exclusions, and the benefits to the customer. An F&I professional should be able to recall 10 or more benefits of each product he offers. Selling intangible products requires transferring your own emotion and belief to the customer. You must learn the names of auto parts that are covered by your VSC, what they do,where they are on the car, what happens when they fail, and the cost of replacing them.

Third Base: PRODUCTION SKILLS

Roger Clemens, one of just four pitchers to surpass 4,000 strikeouts, was 42 when he earned his last Cy Young award. His secret to success is simple. He practices every day and practices harder than anyone else in the game. An F&I professional spends time every day trying to get better at what he or she does!

Knowledge of the process and products alone is not enough. You must also become extraordinary in the needs discovery process. More importantly, you must know how to apply what you discover in a manner that motivates customers to buy. Roleplaying the F&I needs discovery and sales process with others is a great way to improve your ability to lead customers to a buying decision.

Some managers are so skilled that even after a customer says no to all the products offered on an F&I menu, they can then sit back with confidence as they bring the needs they have discovered to the surface, and help the customer understand why each product is important to him or her.

Home Plate: DEALERSHIP PROTECTION

These days compliance is a buzzword in a dealer’s vocabulary. Simply put, an untrained F&I manager who refuses to use a consistent pro-cess puts all the assets of the dealership at risk. The climate in financial transactions and the multitude of regulations demands that F&I managers become experts at the rules and regulations of their craft.
Dealers, GMs and F&I managers are all guilty of focusing on only one facet of the F&I process–profits.Making profits for the dealership is a top priority. In todayF&I environment, equally important is a legally compliant process. Unfortunately, some still believe you have to choose between profits and compliance. The fact is, you can have excellent F&I income and remain legally compliant at the same time. Dealerships around the country are doing it every day.

Rick McCormick is senior training consultant for Reahard & Associates Inc.,which provides customized in-dealership F&I training for dealerships throughout the U.S. and Canada. Rick has more than 20 years of sales and F&I experience. Contact Rick at 866-REAHARD.

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Four Ways to Put Your Customer at Ease

admin — Wed, 06 Feb 2008 03:18:45 +0000

By Ron Reahard

With all the warnings customers get from 20/20, consumer reports and their local credit union about deceptive sales practices and “hidden profits” dealers make in the F&I department, some days it feels like there is a big yellow warning sign outside the F&I office that reads “Caution: F&I Manager Ahead!” I travel in airplanes all the time. Occasionally, I’ll get into a conversation with my seatmate. Invariably, at some point, they all ask the same question,“So, what do you do for a living?”You ought to see the look I get when I tell them I train finance managers for car dealers.You’d think I was a terrorist. Their eyes get big, they swallow hard and they start looking around for a U.S.Marshal to throw me off the plane. After a few seconds of awkward silence, they feel compelled to relate the sordid tale of the last time they bought a car, and the horrible experience they had in the F&I office.

Many complain about having been forced to wait 20 to 60 minutes just to get into the finance office. Once they are finally allowed an audience with the F&I “god,” they perceive him to be pushy, less than honest and focused on his own agenda (i.e., trying to sell them something). Often, they describe F&I managers as unprofessional and confrontational.

Even worse, if the customer doesn’t immediately agree to buy what he is selling, the F&I professional becomes downright rude.

Today’s customers don’t want to wait 30 minutes just to get into the finance office. They want the paperwork to be easy to complete and understand, and they want their questions answered. They want to deal with a knowledgeable able professional who treats them with courtesy and respect, whether they buy anything or not. Customers expect to be able to choose from a variety of financing plans and options, and they want to feel like they got a “fair deal.” They don’t want to feel pressured to buy something they don’t want.

The only way to change the customer’s perception of the financial services process, as well as the media’s perception of F&I,is by changing the way we do business. We must create a measurable difference in the mind of the customer that separates us from the competition in a positive way.

Today’s financial services professional must utilize a dialogue approach to sales, as opposed to a memorized or canned product “sales pitch.” You can’t just whip out a brochure and launch into a sales pitch if the customer isn’t interested in the product. A financial services professional must focus on the customer and their unique needs,not merely product benefits. We want to exceed customer expectations and delight customers by providing a more satisfying and enjoyable purchase experience, while increasing dealer profits through a customer-focused financial services process.

Every dealership, every customer, every sale is unique; and every F&I presentation must be tailored to that customer’s unique needs. To ensure every customer receives a thorough explanation of their options in the minimum amount of time, with the maximum chance of F&I product sales, there are four keys to ensuring a customer focused financial services experience. Let’s explore each one.

GET DOWN OFF YOUR THRONE

For a customer, going back to the F&I office is like going to see the Wizard of Oz. Remember that scene, when Dorothy, the Tin Man, the Lion and the Scarecrow shook and trembled as they walked down that ominous hall to see the Wizard? We can eliminate the customer’s fear of the unknown by getting down off our throne, coming out from behind the curtain and greeting them where they’re relaxed and comfortable (i.e., in the salesperson’s office).

Sometimes, greeting the customer is the hardest part of your entire presentation, especially if it’s 9:30 at night and you were supposed to get off at six. But when you have a
customer, it’s “Showtime at the Apollo.” Every customer deserves a good show. The customer’s first impression of you is critical because it sets the tone for your entire interaction
with that customer. Be enthusiastic. Put on a smile and have a spring in you step. Shake everyone’s hand. Get on a first name basis if at all possible. More importantly, have FUN with the customer!

Have you ever walked by a salesperson’s office and heard a customer laughing and talking? You know the next place you’ll see that customer is in your office to discuss how they’ll finance the vehicle. It’s no different in the F&I office. If you can get a customer to laugh in the first two minutes, they’ll buy F&I products!

DON’T MAKE CUSTOMERS WAIT

One of the most important things you can do to change the customer’s perception of the financial services process is to stop making them wait to come into the F&I office. Unless you already have someone in your office, there is no excuse for making a customer wait. As soon as the salesperson completes the buyer’s order or worksheet, go out and greet the customer in the salesperson’s office. Put the customer at ease immediately. Introduce yourself. Tell them who you are, what you’re going to do, how long it’s going to take, and offer them something to drink.

“Hi, I’m John Smith, the financial services anager here at ABC Motors. It’s my job to complete the paperwork for the Department of Motor Vehicles, arrange your financing,
if any, and take care of all the legal documents. This should take about 30 or 40 minutes. Before we get started, what can I get you to drink: coffee, bottled water, a soft
drink, maybe something with an umbrella in it?” The key here is to be urgent to serve —not urgent to sell!

Now it’s time to bring them back to your office. Remember, you’re not on some top secret assignment back there. So, let them see what you’re doing. Examine the buyer’s
order and let them see you verify that all the figures and information are correct. It’s also a good idea to review the customer’s statement and credit bureau report. The key here is to understand the circumstances and details surrounding any adverse credit information disclosed by the customer or the credit bureau report. And this needs to be
done prior to submitting the credit application.

Why? You need to find the reasons why this customer is a good risk to help your paper-buyer justify an approval or a changing of the tier level.

Ask open-ended, needs-discovery questions as you enter customer information into the computer to understand their wants, needs and concerns. The key is to be
genuinely interested in the customer. You can do this by engaging the customer in a conversation. Do this to find out why your customer needs your products.
Remember, if you expect a customer to be interested in what you have to say, you must first be interested in what they have to say!

CHANGE THE ENVIRONMENT

Changing customer perceptions also demands a change in environment. I’ve told dealers for years to make sure there’s a distinct difference from the tiled showroom floor and the floor inside the F&I office. Often, I suggest that dealers add a one-inch pad under the carpet inside the F&I office. That way the customer knows they’ve left the sales environment once their feet touch that soft, padded carpet.

Your office must also contain a picture of your family. A customer needs to know you’re just like him or her.He or she needs to know you also have a family, a brother, a sister,
a spouse, kids, a dog and a cat. If you don’t have a family, go down to Walgreen’s and buy a frame. It’ll have a family in it.

Your office should also contain a conversation starter; something unique or unusual that will help you break the ice with the customer. It could be an autographed picture of
someone famous, a baseball or golf club. It can even be that “computer on wheels”device that helps customers understand the need to buy a vehicle service contract. A scenic picture on the wall will help relax the customer.A live plant also helps change the environment. It tells a customer a lot about you. The great thing about having a healthy plant in your office is you have to take care of it. This makes you a caregiver. A candy dish makes a customer feel welcome. It says,“We’re glad you’re here!”

Some things your office should NOT contain include manufacturer’s promotional materials or sales awards. And there should be absolutely NO product brochures
visible when they walk into your office. A brochure immediately tells a customer you’re going to try and sell them something. It’s also a ticket for the be-back bus because it
communicates the fact they don’t have to buy today. What it says is they can take the brochure home and think about it.

CHANGE THE EXPERIENCE

Selling our products isn’t something we do to someone, it’s something we do for and with them. In the F&I office, understanding a customer’s wants, needs and concerns must always precede any attempt to sell them something. Selling F&I products isn’t just about helping the dealership, it’s about helping the customer! Selling F&I products to an informed consumer depends upon your ability to find and fill his or her needs … NOT on your ability to get people to buy something they don’t want, and don’t think they need. If you’re not genuinely trying to help the customer, then the F&I process is adding no value to his or her purchase experience. If the F&I process is not adding value to the purchase experience, then it is alienating your customers. And that hurts customer satisfaction. There are two questions you need to answer: How can you ensure you’re
helping as many customers as possible, and how can you remove the pressure customers feel when going through the F&I process?

Easy … use a menu to present every product to every customer every time. Give the customer options, not sales pitches. The use of a menu can dramatically reduce the amount of time customers spend in the F&I office. A menu allows customers to select the products they want,and ask questions or voice concerns about the ones they don’t think they need. This allows us to focus on what is important to the customer, and give him or her a chance to discuss why that product may be especially important to them. Rather than “selling,” you’re simply reviewing options, and trying to help the customer make the right decision based upon their unique situation. Getting rid of that warning sign requires the F&I process to be an enjoyable part of the purchase experience.

A financial services professional must get down off his or her throne, bring that customer back to the F&I office as quickly as possible and remember the most important part of your job is to help customers. This is achieved by changing the environment, as well as changing the experience. That means helping every customer make the best decision for him or her and his or her family. If your customer doesn’t leave your office with a smile, there’s a good chance that warning sign might just be outside your office the next time he or she is looking for a vehicle. ?

Ron Reahard is president of Reahard & Associates Inc., an F&I training and consulting company. He conducted the workshops “Objections Are A Great Thing!” and “Using All The Tools In Your Toolbox!” at the 2006 F&I Conference and Expo in Las Vegas. You can contact Ron at 866 REAHARD. DEALER SATISFACTION Some things your office should NOT contain include manufacturer’s promotional materials or sales awards.

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