From First Contact Through Out The Door – Customer Process Drives F&I Profit

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.