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.