By – Myril Shaw, COO, Dealer Profit Services
“Well, the process is really what you have to do day in and day out to be
successful…”
– Nick Saban, Head Football Coach, University of Alabama
When
your customer first visits your website or first sees an advertisement or first
makes contact with a salesperson, that first contact must begin a consistent,
replicable process and experience that will ultimately drive not just success
in selling your unit but will also drive your F&I success.
This
is clearly only important if you care about demonstrable F&I success. How much can demonstrable success look like coming
from F&I? Here are some measures:
·
65% plus Protective Product Penetration on all sales, both Finance
and Cash
·
9% Plus F&I Gross Profit on the Amount Financed
·
7% Plus F&I Gross Profit on Unit Sales (Cash and Finance)
·
Maximum F&I Total Cost of 25% or less of F&I Gross Profit
You
may recall the conversation that Alice had with the Cheshire Cat in “Alice In
Wonderland”:
If
you don’t know where you want to go the process does not matter. If you do care (and to get those store-changing results, you should care), then the process driving the experience and
resulting in the profitable outcome is
critical.
The
first contact matters. Are you letting
your (potential) customer know that you care about enabling this fantastic lifestyle
and not just enabling it but also in helping them sustain it through both
highly competitive financing and important, affordable, protective products
which will enable your customer to continue their fantastic experience even
when things go wrong. This has to be a
message (partially subtle and partially loud) from the very first contact.
Once
the customer enters the store there are two things that MUST happen. First, they must be introduced to the
Finance/Business/Delivery Manager before they start looking for a unit. “Hey Mr. Customer, before we even get
started, let me introduce you to our Finance/Business/Delivery Manager, Bob/Beth. As soon as we have settled on what you are in
love with, he/she will go through all the delivery details to ensure that we
ensure that we exceed your expectations everywhere.” It is this introduction, before any
conversations about cash versus finance, about finance terms, about specific
protective products, that ensure that every customer gets the same great
treatment and that you maximize your opportunity for both finance and
protective product sales.
The
second thing that needs to happen on entry is that your customer is greeted by
signs and videos about your awesome finance capabilities and the fantastic
value of the protective products being offered.
There need be no conversation about these – let them all be
subliminal. Just warm the customer up
for what is to come.
Ensure
that your salespeople are trained to tell stories about protective products –
without EVER talking prices or terms. “Oh, I had a customer a little bit back
who got that engine warranty and they broke down out on the lake. Their tow was covered, the lift-out was
covered, the repair was covered and they were back in the water in four days
and only out of pocket for the $100 deductible.
They were so happy that they had it…Oh, when you to Bob/Beth, your Finance/Business/Delivery
Manager, they actually have that information about price – I just don’t know –
my earlier customer was happy though!”
Now
the actual turnover does happen – 100% of the time – you ensured that earlier.
Your
Finance/Business/Delivery Manager takes over.
If
the customer says that they are paying cash, the first question is, “I know
that you are paying cash, you must have great credit, wouldn’t you at least
like to see what your options are and maybe preserve your cash to have more fun
with? These are simple interest loans,
so if you decide after a year or two that you really would rather pay cash, you
can convert with no penalty.” Some
percentage of customers will convert from cash to finance.
On
“true cash buyers” (no matter what they say, 80% of cash buyers are not paying with
liquid cash – they are using home equity, converting stocks or other equities,
etc.), you now present all the relevant protective product offerings. 50% plus of “cash” buyers will buy one or
more properly presented protective products.
Now
you are on to the finance buyers and your Finance/Business/Delivery Manager
takes a consistent approach following two key principles. First, no matter what, make sure that the
unit gets sold – even if that means no F&I profit. Second, be aggressive and graceful in
retreat. Always look for the maximum
reserve and the largest possible protective product profit – always with one
eye on how to back down gracefully in the face of customer resistance. This is the finance approach that maximizes
F&I profit.
Do
you care about adding 5% plus net profit to your store’s bottom line? If you do, this is the road to follow!
About Dealer Profit Services
As a premier F&I Services Provider, Trainer, Consultant, and Comprehensive Compliance Program supplier, Dealer Profit Services is about improving a dealer’s F&I profit and then providing the tools to ensure that profit is protected. As a Service Provider, Dealer Profit Services provides complete F&I services and delivers the industry leading F&I Profit Results. As Trainers and Consultants, we help dealers improve their in-house F&I departments. Through the Comprehensive Compliance Program, Dealer Profit Services provides an on-line, on-demand, Compliance Program with documents, training and tools to make F&I Compliance a process that helps protect the dealer against potential risks from compliance issues. Get your Comprehensive Compliance Program here - just click. Learn more by visiting dealerprofit.com, email info@dealerprofit.com, or call (470) 326-0966.
