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10 F&I Landmines to Avoid

August 2009, F&I and Showroom - Feature

by George Angus - Also by this author

It doesn’t take much to turn a customer off to your pitch, but there are things you should avoid at all cost. In fact, some of the behaviors you need to avoid buck some long-standing advice taught to every new generation of F&I managers.

My company recently completed a survey of automobile consumers and compiled a list of negative responses they identified immediately after experiencing the F&I process. To get on this list, the customer had to show a strong, somewhat vitriolic, opinion of an action or impression from the F&I manager. It should be noted that the F&I managers surveyed in these same interactions rarely seemed to recognize the magnitude of the customer’s negative opinion of them and the process.

The good news is my company discovered that many of the negative responses, which we detail below, can be identified and corrected with a simple acceptance and understanding of the issues. The following is an explanation of the responses consumers disliked most, starting with the least harmful error and ending with the most problematic.

10. Overfriendly

This impression occurs as the result of the notion that establishing rapport with customers makes them more likely to buy F&I products. It is easy to understand the logic of this idea, given that rapport is an important element of selling an automobile. However, the F&I process is a completely different science than selling a car. Top F&I performers know the key to F&I performance is establishing credibility, not rapport.

The keys to building credibility are immediate disclosure, no nonsense presentation of facts, and an attitude of professionalism. If you focus on full, honest disclosure, a professional presentation of the facts, and an offering of options that the customer can readily understand, you will get better results than trying to make them “like you.”

9. Felt Tension

What this really amounted to was the customer’s resistance to being “sold.” The feature-benefit sales approach made them uncomfortable. It’s comparable to the way you feel when the doorbell rings at home and someone tries to sell you something and won’t go away unless you are rude or abrupt. Consumers are more sales resistant today than ever before. However, customers feel no tension when the various products are quickly and simply presented as options for them to choose. This is why I recommend that F&I managers stop selling and start offering options. The key here is to let the customer decide. And if you offer your products properly, the customer will choose more products than you can ever upsell. If they feel sales pressure, they will go into sales resistance mode and fight you all the way.

8. Excessive Time in Process

This chart shows the actual acceptance, retention of information, and purchased products along the F&I timeline. These measurements were among very experienced F&I managers who were still trying to “up sell” their products.

When I started in the car business in the 1970s, the longer you kept a customer in the dealership, the higher the closing ratios and gross profits you earned. However, that is no longer the case. Our sales research shows that, all things being equal, faster processes result in higher closing ratios and gross profits.

This certainly carries over to the F&I process. We now live in a “drive-through” society. Consumers expect the process to be fast and efficient, and their purchase of F&I products reflects that. In a large, nationwide group of top F&I managers we measured, the average total F&I time, including the completion of all paperwork, was around 20 minutes.

This is why we had to revise our earliest four-column menus to a much more streamlined process. The fact is you have between four to seven minutes to present your products.

7. Seemed Dishonest

This customer response had a lot to do with appearance, demeanor and attitude. Every media source in the country has given the public the idea that automobile dealers are dishonest. While we can’t change that, we can, in the customer’s viewpoint, become the exception. Just telling the customer you are honest won’t work. You need to show them. This response is also one of the reasons why I advocate immediate disclosure at the beginning of the F&I interaction rather than subjecting the customer to a “qualifying” interview.

One of the comments we continually get about our very best F&I performers is that they seemed surprisingly honest for a car dealer. You see, anyone can go into a F&I office and lie, cheat and steal. But that’s not strong, that’s weak. Being strong is having the customer say at the end of your process, “We just wanted to thank you. This is the best experience we’ve ever had buying a car.” Remember, disclosure establishes credibility, and credibility equals income.

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