F&I Success Comes When You Believe It Will

By Myril Shaw - Dealer Profit Services

People want to finance.  They don't want to pull dollars from their pocket.  The only thing that stands between you and F&I profit is, well, you!

Cash buyers are not using their cash.  They are finding funds elsewhere and then giving them to you.  How much better would it be if they had used your financing capabilities?  They could have.

Your buyers just want to be treated well.  They want to enjoy their lifestyle.  Denying them the opportunity to keep their cash or to be protected from the inevitable vehicle hiccups is not good for them and it is certainly not good for you.  Fear of finance scaring away a sale is a horrible reason to negatively impact your customer's lifestyle experience.  Customer-centric F&I protects your customer's lifestyle and your profit.

We have to be honest…we have to show the price.  This is costing you profit in many ways.  First, showing payment is not only honest, but it
is also helpful.  Price is not a legal requirement and it is not useful to your buyers.  When you commit to a payment first philosophy not only will it benefit your buyers, it will benefit your customers.

"I assumed that everyone knew that we offered financing."  They didn't.  People do not assume that recreational dealers offer financing.  In fact, many people assume that need to find financing before they arrive for the first time to your store.  Advertising your finance capabilities early and often will dramatically improve your F&I profit results.

F&I should be a co-equal top profit center in your store.  F&I profit should be between 3% and 4% of your Unit Sales.  If it is not, you are not doing everything right as regards F&I sales in your store.

You should be selling Optional Protective Products on well over 65% of your sales.

With all of this success, you should also have a team that practices the "Hypocratic Oath of F&I Sales" – first do no harm.  While it is true that you never get more than what you asked for the first time – your team also needs to understand how to be graceful in retreat and walk back the initial offer without losing credibility or the customer.  The first job is to make sure the unit gets sold, the second job is to maximize profit.

So, how is your F&I department doing?  Do they never cost a sale?  Are they selling Optional Protective Products 65% of the time?  Are they delivering between 3% and 4% F&I profit on Unit Sales?

If the answer to any of those questions is "No" – it is time to recharge your team.

F&I delivers significant profit as well as lifestyle customer delight – make it happen!

Dealer Profit Services, LLC can help.  Whether you want someone to take over your F&I and just drive profit to your store, help you some of the time, need some quick advice or just provide F&I Training/Consulting, we are here to help you.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.

The Words That Make F&I Tremble, But Should Not – "I'm Paying Cash"

By Myril Shaw - Dealer Profit Services

"I'm paying cash."  Oh, there goes your opportunity for any finance profit right out the window – right?  WRONG!

Let's start with a little known and grossly under-appreciated statistic – 80% of "cash" buyers are NOT paying with liquid cash.  They are tapping a home-equity line, selling some assets, or financing (from someone else.). Only 20% of "cash" buyers have the cash readily available in their checking or savings account.

So, what do you do?

First, as we discussed in an earlier post, do not assume that your buyers know that you are a one-stop-shop and do offer competitive and convenient financing.  The message needs to be in all your advertising, on your website, and on big signs in your store.  Add a "Get Prequalified – Does Not Affect Your Score" button to each piece of inventory.  Let people know from first contact your finance capabilities and keep reminding them throughout the purchase process.

Second, introduce your Business Manager/Delivery Coordinator at the start of the shopping process rather than at the end.  "Once we know which unit you have fallen in love with, Bob will go over all the details with you so that you can start enjoying your unit as quickly as possible."  In this way, no matter what the customer says about their purchase method, you have guaranteed yourself the opportunity to revisit self-proclaimed cash buyers at the point when they are most excited about closing the transaction.

Third, show payments, not prices and there must be two hard and fast sales floor rules: 1) No checks or cash are accepted on the show floor – only the Business Manager can do that; 2) Sales always focuses and points to prices.

Fourth, once your buyer has declared once again to the Business Manager that they are paying cash, the Business Manager will initiate this conversation, "It's terrific that you are able to do that.  You clearly must have great credit.  Wouldn't you at least like to explore your options, maybe you can have even more fun with that cash?"  This will generally only work in a small percentage of cases, especially if you are already following the three preceding points.  However, it is a guarantee that this will work in 0% of the cases if you don't try.

Finally, 100% of your buyers are presented with all appropriate optional protective products.  You will sell protective products to cash buyers – so your F&I profit is boosted, even if the customer is paying cash.

"I'm paying cash" is not a threat – it is a challenge – and one that you are good enough to overcome!

Dealer Profit Services, LLC can help.  Whether you want someone to take over your F&I and just drive profit to your store, help you some of the time, need some quick advice or just provide F&I Training/Consulting, we are here to help you.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.

The Hypocratic Oath of F&I Sales

Myril Shaw – Dealer Profit Services

The Fear: The F&I Process May Cost Sales

The Fact: The Hypocratic Oath Of F&I – Lifestyle F&I is NOT Car F&I

"If we put our customers through the whole F&I things it will cost us sales.  They will just leave and go somewhere easier."

Have you ever said that to yourself, said it to someone else or heard it from someone?  I'd lay money that you have!

Of course, F&I has been entirely poisoned by the auto industry…and that is sad.  Having come from auto, I know that was not the intent.  I did sadly observe the high-pressure, somewhat shady practices that now feared today, in many cases…and there is a big effort to recover in automotive today.  That said, it is true that many people have experienced the horror of F&I in car sales.  After spending hours with the salesperson, you are sent to the principal's office (also known as the Finance Manager) for a lecture on behavior and to understand your punishment – all in the name of loading up F&I revenue.

F&I for Recreational Vehicles is completely different.

In automotive, there are a couple of big differences.  First, buying a car, unless it is a luxury vehicle (and then the F&I experience is very different too) is not a lifestyle purchase.  It is a requirement.  Second, car dealers make virtually nothing on the unit sale.  Their margins on vehicles are in the low single-digit percentages and so F&I IS their profit…so they do everything they can to maximize the profit on F&I regardless of value.

Our industry is very different – and much more user-friendly.

First, no one "needs" a recreational vehicle – everyone in your store is making a lifestyle decision and a lifestyle choice.  Second, in general, there is, generally, solid margin on the unit.  Third, getting someone a solid finance plan with good terms helps ensure their ongoing comfortable enjoyment of their new purchase.  Finally, while selling optional protective products does have the beneficial effect of increasing your profit, it has the even larger upside of truly protecting your customer's worry-free enjoyment of their lifestyle purchase.

If everyone touching your customers at any level, and especially your F&I people don't have a 100% belief in the four points in the previous paragraph the then, to be blunt, need to be in a different industry.

The F&I sales process truly does need to be customer-centred with an honest effort to make it about lifestyle enjoyment.  That is not to say that profit must be sacrificed – to the contrary, being customer-centred means that profit flows in a stress-free environment.

F&I sales must operate entirely with the framework of two guiding principles:

1)    Be aggressive and graceful in retreat – You never get more than what you ask for in the first place – so make every effort to maximize profit – and then – as the customer hesitates, have a plan and a path to gracefully walk back the asks in a thoughtful, customer-focused way, so that you are always compliant with the second principle of this framework;

2)    Always follow the philosophy of The Hypocratic Oath of F&I sales – "First do no harm."  This philosophy says that selling the unit is job 1 and maximizing profit is job 2.  If Selling the unit requires Buy Rate and no protective products, make sure that the unit sells.

This framework practiced in a customer-centered, lifestyle purchase, value-creating environment will ensure maximum profit, unit sales and a great experience for everyone involved.

Dealer Profit Services, LLC can help.  Whether you want someone to take over your F&I and just drive profit to your store, help you some of the time, need some quick advice or just provide F&I Training/Consulting, we are here to help you.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.