November 2008 - Feature
Upselling P&A in the F&I Office
Parts and accessory sales might seem like a sales thing, but there's a way for F&I professionals to get in on the act as well. F&I expert discusses how and why it can help keep your customers in a buying mood.
By Kevin Burke
Upselling parts and accessories might not sound like a way for an F&I manager to increase profits, but it can be. How? For one, doing so increases the amount financed and therefore your participation. But there’s an even bigger reason to do so, one that involves your store’s ability to retain customers.
In no other type of dealership will you hear, “Sure sir, we can put the purchase of your new vehicle on your gold card.” And only in powersports stores will you get a question like, “Can I add my helmet and pipes to the loan?”
In automotive retail, accessories are typically included in the deal by the time it reaches F&I. This excludes items such as vehicle recovery systems, service contracts and pre-paid maintenance. However, powersports dealers are in a unique position because of their use of revolving accounts.
Another similarity between powersports and automotive retail is the disconnect between sales and F&I. Many a salesperson has been the focus of an F&I manager’s wrath because he or she has sabotaged the manager’s ability to sell his or her product. So does that mean an F&I manager should attempt to upsell parts and accessories? No, that’s not what I’m suggesting.
When you’re utilizing an installment loan, why not hand your customer a parts and accessories catalog with “wish list” stickers, and include a gift card or store credit for future purchases in the deal?
It’s the same concept as selling that pre-paid maintenance plan; get the customer to return to the dealership over and over again. That’s something a gift card or store credit can ensure more effectively than the revolving account card, because the dealership already has the customer’s money.
Between the two options, gift cards are easier to manage. Store credits require some real bookkeeping skills on your part. The drawback is that both options will cost you money.
Your credit card processor can usually set up a gift card system at the same rates you are charged for processing credit card transactions. An in-house store credit program will cost you in terms of the man-hours it takes to administer the program. This option also increases the possibility for errors, so you’ll have to do your homework to see which program suits your store’s capabilities.