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.
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