Happy 2021 – Are You Looking For A FANTASTIC Year, Or Are You Settling For Good Enough And Comfortable?

 

          By: Myril Shaw - Dealer Profit Services 

Here is a hint – you can't have a great 2021 by settling for good enough…

Are you setting stretch targets for your sales?  Are you training your sales team to maximize all aspects of profit?  Are you ensuring that you have enough new and used inventory to meet demand and allow for exceptional results?

It is a guarantee that at the end of 2021, if you look back and say, "Well that was good enough", you will be disappointed.

The only thing standing between you and fantastic is, well…you!

Let's simply drill down on your F&I results.  We will work with some easy sample numbers which you can quickly adapt to the reality of your store.

Let's assume that you did $10M in unit sales in 2020.

Are you targeting 10% to 20% growth in 2021?  (Or are you simply saying that flat sales are good enough?)

With $10M in unit sales, what was the net F&I contribution to your net profit?  (If you don't know the answer to that question, it is definitely time to figure it out.)  

You should not be comfortable in any way – not even good enough – if your Net F&I Profit on Unit Sales was one penny less than $400,000 (4% net F&I profit).  So in 2021, you have to be focused on $440,000 or $480,000 just based on your new unit sales – and you should be driving for 4.5% Net F&I profit on unit sales – so if you grow your unit sales by 20% and your F&I net profit to 4.5% - your F&I will be adding $540,000 directly to your bottom line.

Oh, you're okay with a 3% contribution from F&I, then you are okay with adding only $360,000 to your bottom line and leaving $190,000 on the table – REALLY?

Why would that be good enough?  Now the excuses start:

• Our sales team is comfortable with the current F&I profit

• We don't want to rock the boat

• We'll make it up somewhere else

• Blah, blah, blah

A leading 20 Group facilitator and industry consultant, David Parker, founder of Parker Business Planning talks about the for modes that dealerships can be in:

• Growth mode – always looking for ways to improve and constantly stretching for improvement

• Trouble mode – doing badly, knowing it and actively seeking help

• Steady state – We are comfortable and don't want to do anything to upset our comfort level

• Know-It-All – We don't need help because we are so smart already

Dealerships in Steady state or Know-It-All are actually in Trouble, they just don't know it yet.

Where are you?  Are you ready to drive your F&I profits to new, previously unseen levels?  Are you ready to institute the training and processes to facilitate extraordinary F&I success?  Are you ready to set stretch goals and targets?  Are ready to ensure that your F&I expenses are minimized while your success is maximized?

A focus on continual improvement in all areas is what Growth Mode is all about – and Growth Mode will drive your 2021 success!

Here is to a FANTASTIC 2021  and currently unbelievable while actually achievable F&I Profit in 2021!

 

 Dealer Profit Services - Driving Profit Through Fun and Inspiration  

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.  

Ho, Ho, Ho – The Plan To Make You Merrier!

 

                   By: Myril Shaw - Dealer Profit Services 

We are in the season of celebration.  This has been a very different year – and for those of us in the recreational industry, it has mostly turned into a spectacular year…at least in terms of unit volume.

How has your profit been?

Not gross profit…that has almost certainly been up.  Have you made as much profit as you could have on your F&I Profit?

"Oh, that…it doesn't really matter as long as we are making a solid profit", is a common response.

Well, let's look at some real numbers.

Here are some sample numbers – you can do the math to see what this could mean to you.

Let's say that you are selling $10M per year in unit sales.  Are you making $400K on your F&I Profit (Net – after salaries and other costs)?  Oh, you don't know – well go dig in and look.  The odds are that you are not.

If you are a $5M unit sales store, then you should be doing better than $200K of F&I Net Profit.

These are not numbers that you typically spend a lot of time looking at.  You should!  You are probably making a Net Profit on your Unit Sales (absent F&I) of just 3% or a little more.  You could be doubling that Net Profit with the right F&I practices.

Wouldn't you like to be even merrier next year at this time?  Wouldn't you like to double your net profit?  Well, you can!

It starts early.  Make the fact that you offer financing visible on your website, at your store, in your advertising.  Everyone needs to know that you are a one stop shop when it comes to buying and financing.

Introduce F&I early, although not by that name.  F&I has lost luster through automotive.  Rename F&I as Business or Delivery and introduce them to your customer BEFORE the shopping process even starts – let your customers know that these are folks that will make their lifestyle experience happen and that they will be talking to them once they have decided on the unit of their dreams.

Train your F&I folks (okay, Business Managers or Delivery Coordinators) in the two basic premises of F&I best practices: 

• The Hypocratic Oath of F&I – First do no harm – No matter what, never cost the sale

• You never get more than what you ask for the first time – Always try to maximize profit while having a graceful (not just "Oh, okay, I'll back down") plan and conversation about backing away from the maximum in mind and ready

100% Turnover is the big thing in maximizing profit.  Every customer, every time, gets introduced to your Business Manager (okay, F&I Manager renamed) so that they have the opportunity to switch to finance and then to purchase protective products.  You'll never achieve your goals without 100% turnover.

Do you want a merrier New Year?  We will toast to that!  Follow the guidelines that we have laid out  and you will be oh so jolly next year!

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.  

When You Focus On The Lifestyle It All Makes Sense

 

         By: Myril Shaw - Dealer Profit Services

Somehow there persists a perception that maximizing F&I profit comes at the expense of the customers.  Nothing could be further from the truth.  When you look at this from the lifestyle perspective everything makes sense. 

 COVID 19 certainly changed the way, and more importantly the why, customers looked at purchases in the recreational space. Why did they want an RV?  Why did they want a boat?

It all became about the "staycation" (we will credit John Haymond, SVP at Medallion Bank and President of the NMLA).  People wanted to get out, to have fun, to relax, to enjoy time with their family.  It was no longer reasonable or safe to go on travelling vacations.  Flying was somewhere on the list of difficult, not fun, or flat-out unsafe.  Hotels were questionable.  So, what happened?
Boating and camping/RVing became the go-to getaway.  These recreational opportunities turned into a flood of recreational purchases.  People did not NEED these purchases – they WANTED these opportunities for fun.  F&I enabled these purchases.

 Why did we set F&I performance targets?  Well, certainly, it was part of the management requirement.  More importantly, it drove a level of behavior.  What was the result of that behavior?  Every customer received the best opportunity to engage, obtain and enjoy the recreational lifestyle.  These targets drove customer satisfaction.  F&I enhanced customer satisfaction.

How did the storewide F&I process help your customers?  A fully integrated, early introduction through 100% Turnover process ensured that every customer had the same opportunity to obtain every lifestyle enhancing benefit in their purchase.  This might have been the opportunity to get a loan at a great rate.  It might have been the ability to obtain protective products that will enhance their lifestyle purchase.

 What did the offering of Protective Products do?  These products helped to ensure that the lifestyle that your customers were looking for was safe, easy, and ensured – no matter what happened.  These products made it easy for you and your customer decided that it was time to trade in that old unit, it had a maximum value so that they could step up easily.

 100% turnover ensured that every, EVERY, customer had access to all of the lifestyle enhancing options.  Cash or finance, they all could avail themselves of every option to simply focus on enjoying their lifestyle.  Every customer could keep their investments whole and still enjoy the lifestyle.  Every customer could sleep solidly knowing that no mishap would cost them money or time from their lifestyle.

 It really is all about the lifestyle.  Focus on the lifestyle and F&I profit will be a natural and lucrative outcome!

 

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.  

'Tis The Season For A Jolly Review of Your F&I Profit! Is It Time To Change?

 

          By: Myril Shaw - Dealer Profit Services

 

Well, here we are, the heart of the slow season.  Thanksgiving along with Black Friday has now come and gone.

Things are slow.  It is time to evaluate and make decisions about how to be better.

This is the season for change – change to make you better.  This about change to make you jolly!

This is just one blog post.  We can't address everything here.  We can provide some guidance on your F&I performance.

Let's put some real numbers around this that will make it easy for you to adjust as they may fit your store or stores.

Let's say that you sell around $10M in Unit Sales per Year – and let's say that you finance 50% of those (which is less than you should be financing, but that is a different message.)

So, you are financing $5M per year.

Are you delivering at least $400K in F&I Gross Profit on this?  That means, are you seeing Reserve plus F&I Net Profit on Protective Products of at least $400K each year.  If you are not, you are missing a significant profit adder for your store.

Now, let's assume that you are seeing $400K in F&I Gross Profit – once you subtract your F&I salaries, your credit pulls, your storage and disposal costs, your floor space costs and your compliance costs (oh, not really thinking about Compliance – you should be – the costs there could be huge), are you seeing at least $320K F&I Net Profit?

Oh – you don't know – well, that is whole different issue.  F&I should be a significant individual and individually measured contributor to your bottom line.  If that is not the case, talk to your accountant or controller.  F&I profit matters and it matters as it's own profit center.

So, now that that you are looking at F&I as its own profit contributor, if $5M of financed deals per year is not adding $320K in net profit or 6.4%, you are underperforming.  

Time to change!

Here are the metrics you need to be seeking…and if you are missing them, you are losing profit and money:

• 8%+ F&I Profit on the Amount Financed

• 4.0%+ F&I Profit on Unit Sales

• 50%+ Contracts on Finance Applications

• 65%+ Protective Product Penetration on Contracts

Making this work for your store sales and numbers is easy – it is simple math – take your annual unit sales and divide by $10M then take that result and multiply it by our target results:

• $400K times your result is your target Gross F&I Profit

• $320K times your result is your target Net F&I Profit

The odds are that you are not there.  Look honestly at your numbers.

This is the season when change is as easy as it is ever going to be.

If the time to change your profit for the better is now – make the needed changes and DO IT!

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

 Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.  

 

Happy Thanksgiving – Really – It Is Really Special This Year – And There Are Lessons (F&I Profits Should Increase)

 

              By: Myril Shaw - Dealer Profit Services

 

      This has been an interesting year, to say the least.

      For many of us it has meant health challenges for ourselves and those close to us including our fellow        workers.  It has certainly impacted our friends in the dealerships that we work with. If it has, and you           are reading this now, giving thanks is appropriate.  

       For those of you who may have suffered personal loss in this challenging time, we offer our                         sympathy and our support and stand ready to help you in any way that we can.

       If you are among the lucky who have not had health related challenges, give a BIG thanks!

      No matter your personal circumstance, this is the time to give thanks simply for being able to read this        (not that this is special) and to engage in your business in a positive way after what has been a wild             year.

      For the Recreational Industry this year has been strange, unexpected, largely delightful and fully                unpredictable.  With a normal start and then the expectation of doom through to results we never                could have expected and now inventory shortages.

      What a year!

      So what have we learned?

      Digital retaiing really can work…and so can remote F&I.  We don't need to be face-to-face literally in        order to sell our products and to sell our Protective Products. Remote does not mean remiss – it                  simply means a new reality.  

       Has our world changed forever?

       Probably!  Not in the sense that we will never be face-to-face again but certainly in the fact that we             have learned to be much better digital and remote sellers.

       We have learned how to present our products online and digitally in a compelling way.  We have                 learned how to sell our Protective Products remotely (haven't we?)

       Selling Protective Products remotely takes a particular nuance.  It takes a skill that may not be natural         to all the in-store Finance Managers.  Certainly, these local Finance Managers have the product                   knowledge.  Certainly, they have the sales skills when looking at the customer.  It takes something             different when that customer is over the phone or on Zoom.

      Attaining maximum F&I profit is completely different in the days of COVID than it was in 2019 and          before.  It can be done…and fundamentally the rules have not changed.

      Virtual or physical, there must be 100% Turnover to your Business Manager.  In the virtual                           environment this is even more important  ensuring that you are meeting all the compliance standards           and requirements.  The Business Manager is THE person who can help the customer understand the          delight to be obtained through these Protective Products and the lifestyle protection that they ensure.

      In the Recreational industry these Protective Products are truly about protecting and enabling the                lifestyle.  They are far too important to be missed.  Face-to-face od remote, they are critical for the              enjoyment of the buyers.  They MUST be delivered.

      If you have not seen a major increase in your F&I profit this year then you definitely need to explore          what is wrong.  It is important that you do this right now because 2021 will almost certainly face the          same remote challenges without the pandemic bump in sales and the inventory challenges will                    remain an issue.

      F&I profit will, or should be, a major contributor and help your bottom line in a significant way in              2021 – will it be?

       It has been a year for which there has been much to give thanks and for which there has been much to         grieve.  Lessons learned…lets make 2021 an absolute year of awesome notwithstanding any of the             circumstances.

       Happy, Happy, Happy Thanksgiving!

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

 Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966. 

Compliance Is Not Just A Thing

 

                By: Myril Shaw - Dealer Profit Services

Compliance is boring.  Compliance is a pain in the neck (or other body parts.)  Compliance is never an issue for me.  Compliance is just something people talk about.

All of those are true…until…a violation happens to you!

It couldn't happen – you say.  I know my customers.  We check everything.  We protect people's information.

Easy sentences…do you know if they are actually true?  Are you ready for the consequences if they aren't?

There are several areas where you could be or could suddenly become in violation of compliance rules and regulations:

• Are you adequately confirming and protecting personal, private information?

      o Are there Deal Jackets with Credit Apps laying around unprotected?

      o Are you confirming the identity of the people you are dealing with?

• What about cash?

      o Are you carefully watching cash transactions?

      o Are you reporting cash transactions over $10,000 and are you checking on the buyers for cash transactions below that level?

There are some key steps you can take to avoid the following penalties:

• Red Flags (related to Identity Theft)

      o Up to $3,500 per violation in civil fines

      o Up to $2,500 per infraction to the FTC

• Disposal (related to Identity Theft)

      o Up to $2,500 per independent violation

• OFAC (sales to prohibited entities or individuals)

      o Criminal penalties of up to $1,000,000 per violation and/or up to 20 years in jail

      o Civil penalties up to $55,000 per violation

• Safeguard (related to Identity Theft)

      o Penalties up to $42,530 per violation

• Patriot Act (related to money laundering)

      o Penalties not specified however, any violation will also be covered by one or more of the above

If you don't want these, then do the following:

• Appoint A Compliance Officer

      o Your Compliance Officer will understand, train on and enforce your documented compliance polices.

• Documents Your Policies

      o These are the policies that everyone is trained on; that your Compliance Officers enforces and makes sure that all employees commit to; that protect you from compliance violations

• Train Your Employees

      o Make sure they understand the rules

      o Don't leave Deal Jackets or other personal, private information laying around

      o Why something feels odd, check on it

• Protect Private Data

      o Cross shred what you don't need

      o Lock up what you do need

      o Private and personal needs to remain private and personal

Compliance is not really a mystery.  It is not legal mumbo-jumbo.  It is common sense and it is what you would want for yourself.  Take the time to make sure you are doing it right in your store.  

Doing compliance right protects your customers – it protects you – it ensures satisfaction everywhere.

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

 Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966. 

Protective Products Protect More – They Protect Your Profits

 

 By: Myril Shaw - Dealer Profit Services

To some, perhaps many, selling extended warranties and other protective products seems more a burden than an opportunity.  The fear is that the process of trying to sell these products will "through sand in the gears" and potentially cost a sale – so the focus shifts to selling the unit rather than driving F&I Success through the enhanced profit provided by these protective profits. 

 

The recreational world is different than the automotive world.  In the auto world, the only real profit on a sale is driven, not through the profit on a unit, but through the profit provided by warranties and other protective products.  The pressure on the customer to purchase is high and sales motivation is, in fact, "this is how we make money."

 In the recreational world, the conversation and the motivation is completely different.  People are not buying boats, RV's or even motorcycles because they have to have them.  They are buying into a lifestyle, a vision.  While these protective products do provide great profit, they also serve to truly protect the lifestyle vision that the customer has.

An engine failure on the lake results in a tow and a fix with the warranty.  Flat tire – no problem – who carries a trailer jack or an RV jack – the Tire and Wheel Protection gets help to the customer.  Rips, stains, tears, chalking, yellowing – all protected with interior/exterior protection.  All of this goes to preserve and protect the customer's desired lifestyle. 

 It is simply irresponsible NOT to offer the customer lifestyle protection.

 Once everyone in the store understands this, it is time to focus on the profit.

 Paul Sheldon, RVP for Protective Asset Protection, says, "10% of the people will always to these products, 10% of the people will never take these products, the other 80% are ready."

 Michelangelo said, "The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark."

 The target for in-house F&I Protective Product penetration should be at least 75%.  Why would any customer not want products designed to help them have no worries and simple lifestyle enjoyment?

A great, menu-sold bundle of an engine warranty, accessory warranty, interior/exterior protection and GAP gives the customer great peace of mind and should profit 5% profit on the amount sold. 

 Add this to the reserve and suddenly there is 10% - 12% F&I profit on the deal.

 Do this on a recurring basis – make it a habit – and suddenly your store is gaining 4.5%+ F&I on unit sales – and all because you are ensuring a customer's lifestyle enjoyment is uninterrupted, no matter what.

 Happy customers and high profits – does it get any better?

 

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

 Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966. 

 

F&I – The Process Drives The Success

          By: Myril Shaw - Dealer Profit Services

Having Simple, Measurable, Achievable, Reasonable and Time-Based goals is absolutely a requirement for driving F&I Success!  While unequivocally necessary, these goals are not sufficient.  

Achieving the goals is only possible when they are supported by a comprehensive and robust F&I process.

The F&I process starts long before the customer is introduced to the Finance Manager (or, as we suggest, the Delivery Coordinator.)

The F&I Process begins when your customer makes first contact with your dealership.  Whether that contact is a drive-by, a print ad, online, TV, radio or otherwise, that first contact must advertise that Competitive Financing is available at your store.  Yes – failure to make this abundantly clear from the outset leaves open the very real possibility that the first thing your customer will do is begin to shop financing.  Once they know that they can have the convenience of one-stop shopping, you have taken a big step in the F&I process.

The next step starts before your customer has taken a walk around of even a single unit, and is critical to ensuring an outstanding customer experience – and locking in your customer before they have even started.  With the use of simple, web-based "Get Pre-Qualified" application and the next step of allowing the customer to "Shop By Payment" – allowing a fantastic customer experience by ensuring that the customer is actually shopping for what they can and, with these solutions locking that customer into your store.

Starting the F&I Process by advertising Financing and then "hooking" the customer with a great experience, the F&I Process is well underway.

As the customer starts to look at inventory, on-line or in-store, continue to advertise your finance capabilities and always present your units in terms of payment and not price.  All you need to do is to use consistent and reasonable terms and rates to set the payment.  Salespeople should be trained to always talk about payments.

Protective products should be visible by brochures or examples.  It is not necessary for your sales team to try and sell these products.  If asked, they should stories about how other people have benefitted from the products.  For example, when asked about the Interior/Exterior Protection after seeing a fake cup of spilled coffee on the carpet in a unit, the story goes something like this.

"One of customers saved a lot of money, and maybe his marriage, when he hooked that vinal seat with a monster fish-hook.  It ripped the seat.  Because he had the protection, he got it repaired like new at no cost.  It was great for him."

When asked about prices on Protective Products, your team should be trained with a common response – "Sorry, I just don't have those rate sheets – I'll make sure that our Delivery Coordinator goes over all that with you."

This step in the process plants the seeds for a successful F&I experience.

The next step in the process is 100% Turn-Over.  100% of your customers see the Delivery Coordinator (Finance Manager) 100% of the time – no matter what.  No checks or cash on the sales floor.  "I'm paying cash" still sees the Delivery Coordinator.  This gives them the opportunity to convert cash buyers and to present all the relevant protective products 100% of the time (this is important not just for the profit potential but also to protect against potentially liability for presenting warranties and other products to some customers and not others.)

Once the customer is with the Delivery Coordinator, they must follow the key F&I principles: The Hypocratic Oath of F&I – First, do no harm – never lose a sale; Be Aggressive but Graceful in Retreat – You never get more than what you ask for the first time – when you hear the sharp intake of breath, learn to back don gracefully.

Always present the finance results in terms of payment.  "Congratulations, you have been approved for a payment of $288.00 per month for 180 months and that includes your engine warranty, Interior/Exterior protection and GAP."

When this process is followed every time with every customer, you'll begin achieving your F&I goals and targets and will be well on the road to F&I success!

 

Dealer Profit Services - Driving Profit Through Fun and Inspiration 

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966. 

  

 

F&I Profit – Where Enough Is Enough and Too Much is Just Right!!! (How does an extra $300K per year sound?)

                   By: Myril Shaw - Dealer Profit Services

Of course, it would be generally correct to assume that it is impossible to have too much profit.  That being said, when it comes to F&I Profit as a percentage of unit sales, there are definitely factors that can limit F&I Profit.

Depending on the dealerships customer demographic, is the number of near-prime or non-prime customers is disproportionate, F&I Profit can definitely be affected.  Financing of non-prime and near-prime customers will carry lower reserves, often in the 2% - 3% range, versus prime customers where reserves can run in the 6% to 8% range.

A further impact coupled with the lower reserves are the higher interest rates, which make it more difficult to sell protective products.  If the units are lower price $30,000 or less, retail protective product sales will be capped in $4,500 to $6,000 range – limiting profit on those products  to something in the area of $1,000 - $2,000 or 3% - 4%...making it very hard to achieve the 8% profit target.

The flip side of the coin is high priced units, generally $100,000 dollars or more.  While carrying 6% reserve is fairly common, even just 2%  protective product profit will be $2,000 of profit, which could mean protective product retail prices of $5,000 - $6,000 – meaning a payment increase $50 - $60 per month – not necessarily an easy sale.

F&I Profit %           2%                                             8.5%                                           4%

                          Weak Credit                                 Prime---------------------------------->

                          Low Price (<$30K)                         $50K Average                         $125K+

What does all of this mean to you? 

If you sell predominantly lower end units, you may want to consider adding some mid-range line of products.  If you are getting disproportionately  weak credit customers, you may want to adjust your some of your marketing to attract a more balanced demographic.

On the other hand, if you are selling the high end, 4% profit on a $125K unit is still $5,000 – so maybe that is not too bad.

The other consideration in driving profit is your cost of F&I.  There is NO CIRCUMSTANCE where your "all-in" F&I cost (salaries, space, equipment, materials, bureau pulls, etc.) should ever exceed 25% of your profit (and it should be much closer to 20%). 

The target Net Profit for F&I as a percentage of unit sales is 4%.  If your cost is 25%, you will need to be averaging 5.33%.  If your cost is 20%, you will need to average 5%.

At a store financing $7.5M per year, these numbers will contribute $300,000 annually directly to your bottom line – what is you could raise your Net F&I Profit to 4.5%, your bottom line increase becomes $337,500 – now, what could you do with that?

Dealer Profit Services - Driving Profit Through Fun and Inspiration

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.

 

 

F&I Stands For Fun and Inspiration – Enable The Lifestyle (And Make Some Money Too)

 

By: Myril Shaw - Dealer Profit Services

F&I has earned a bad reputation, thanks, largely, to the way it was handled for far too long in the automotive industry.  The recreational industry can and should refresh the way people think about F&I.

 

For purchasers of recreational vehicles – boats, RVs, ATVs, off-road, Powersports – F&I should not, cannot, be a pressure-filled, must do, frankly, uncomfortable experience.  Rather, F&I aids in creating and/or sustaining a lifestyle of pleasure.

 

No one "needs" a boat or an RV.  They want one.  They want what a boat or RV promises for them – freedom, relaxation, entertainment, and simply a way to breathe freely. F&I facilitates that promise – that dream.

 

The F in F&I stands for Finance.  Financing makes it possible for your customer to afford the great lifestyle – so the F really stands for Fun  The I for Insurance offers all the Protective Products then ensure that all your customer has to worry about is enjoying themselves, comfortable in the knowledge that if anything goes wrong, they are protected and will be able to continue their lifestyle enjoyment without added cost.  Save in that knowledge, your customer is able to relax and open themselves up – when that happens I stands for Inspiration.

 

Everyone involved with the customer's F&I experience must fully internalize the fact that they are not pushing profit – they are enabling and delivering a lifestyle – they are delivering Fun and Inspiration.  That said, "not pushing profit" does NOT mean not making a profit – it simply means delivering that profit with the lifestyle message and not with the pressure and fear technique that so many are so familiar with.

 

Why does a customer want to finance?  Well, it could be for a couple of reasons, or perhaps both reasons.  First, Finance allows the customer to acquire the unit that they want without needing or using liquid cash to do so.  It frees them to get want they want while conserving more cash to help enjoy the lifestyle even more.  Beside Fun, the F means Free – Free, to get what they want and Free to do what they want

 

What about Insurance or, in this case, Protective Products?  These are NOT scams or rip-offs – ever. These are the products that allow your customer to relax without concern about things that might happen and in this relaxed mode, they can be Inspired.  Warranties, Interior/Exterior Protection, Tire and Wheel Protection, GAP provide the assurance that their lifestyle can be Idyllic.

 

With all of this, your message to your customers needs to be clear. 

 

Yes, you offer Financing and that needs to be advertised early and often so that there is no reason for your customer to seek that elsewhere.

 

Your messaging needs to let customers know that be Financing through you, they do not simply get F&I, they are getting Fun and Inspiration.  They are getting a lifestyle that you understand and that they are looking for or maintaining that is Fun and Inspirational and that truly does offer a Free and Idyllic lifestyle.

 

F&I never needs to mean, "Oh no, not that" ever again – change your attitude about F&I and watch the profit skyrocket!

Dealer Profit Services - Driving Profit Through Fun and Inspiration

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.

Is "Out Of The Box" thinking the new "In The Box" thinking?

By: Myril Shaw - Dealer Profit Services

Is this the year that changes thinking "out of the box" to the new "in the box"?

 

We entered 2020 with a robust economy and expecting outstanding results – although outstanding was measured in terms of 10% or 20% increases in sales.

 

Then, in March/April, COVID hit.  For a few days or weeks or months we suddenly saw devastation happen as people died and the economy shut down.  We all expected the worst – and for much of the economy, and many of the businesses, the worst did, and in some cases, still is happening.  For the recreational vehicle industry, things were suddenly very different.

 

The world shifted.  All of those budgeted vacation dollars went to boats and RVs.  Travelling changed to self-controlled fun on the lake or on the road.  Suddenly there was a huge run on boats and RVs as people decided to take control of their own "fun environments" by staying out of airports and hotels and enjoying the freeing fun that they could control.  Sales were up over 50% or even 70%  in many cases.

 

So here we are…a great two-thirds of a year and looking forward.

 

Sales are slowing, although, while today that is largely due to inventory issues – there is evidence that the vacation dollar spenders have spent and trends are back to normal for the year.  The big question is, now what?

 

That is a BIG question.  While life is "back to normal" in terms of spending by consumers, it is far from back to normal in terms of sales and marketing.  At this point, online and social media marketing have begun to become normal.  Touchless sales, F&I, and delivery are now a constant rather than a strain – at least hopefully!

 

What happens to the shows and other big marketing events?  Is it time to "think outside of the box"?  Will this become the" new box"?  Is it time to make changes for this year – or forever – or both?

 

Fall/winter and into early spring is the traditional time for industry events, both those targeted at dealers and suppliers and at dealers and their customers.  Will those happen as usual?  In some cases, we already know that the answer is "no".  Many event sponsors are reluctant, for a lot of obvious reasons, to cancel their live events – while they are all now focused on ensuring that they can provide quality virtual events.

 

This leads to two questions that we all need to consider.  Can virtual events engender the same level of personal engagement that in-person events can?  If events are virtual, can individual dealers and suppliers create their own highly targeted "virtual events" that deliver the same net impact and results as those costly, much larger, and less personal industry events?

 

There can be no question that major event organizers and sponsors can deliver a much broader, though perhaps less targeted audience than any individual dealer or supplier.  That said, can social media and traditional marketing, with some creative effort be able to deliver ultimate results that equal the big shows at far less cost?  (Editorial comment - The big shows and the big sponsors are expensive – it is important to stand out – or, in our opinion, not play at all.)

 

This is the year to find out the answer to that question.  We fully support all the big events and shows and organizers.  We are not suggesting abandoning any of this – the question is – can individual dealers and suppliers do something on our own that is better than we have been doing?  It may take effort – it may take some investment – it may take trial and error – it may take time – it may take getting used to.  Driving new business going forward may be much more individually/locally directed than it has ever been – and it maybe forever.

 

So, in summary, let's start thinking about sales and marketing strategies that include, but don't rely on the major organizers and sponsors…it is time to find the sales and marketing strategies that drive business directly in cooperation with, but not dependent on, the big events and sponsors.

Dealer Profit Services

Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model.  As the industry's only Finance Solutions Provider, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be.  Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice or just provide F&I Training/Consulting, we are here to help you.  If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.