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Debating Innovation

Bothered by the response to software companies trying to bring a fresh look to F&I, the editor weighs in with his thoughts on tablet and e-mail menus.

April 16, 2012

We posted a news item on the Website last month that detailed the results of a new study that painted a profitable picture for dealers willing to invest in technology. Conducted by accounting firm Plante Moran PLLC, the report said dealers who do so could realize net profits in the 6 percent range. "The dealer who understands the value of technology in helping to enhance customer satisfaction and service will have an edge that can lead to increased sales and profits."

The study recommended that dealers direct their tech investments toward online sales, social media and security systems to protect their customers’ data. It was under the "Social Media" heading that mobile devices and their impact on sales are mentioned. "Evaluate how to use this powerful technology to build loyalty and showroom floor traffic," the study advised.

I bring the study up because I caught some heat on Facebook for my "Updating F&I" article last month. It was as if my friends in my online F&I world viewed the drive to update the F&I office as an attack on the business manager.

I understand why my F&I buddies are so sensitive. At my first NADA Conference & Expo, my publisher urged me to check out this new F&I selling system designed to allow salespeople to present product on the show floor. I won’t say which company it was, but officials there were excited to see F&I duties moving further toward the front end.

Then there’s the Great Recession. That’s when some dealers began testing the hybrid manager, a concept that combines the roles of the salesperson and F&I manager. Let me just say that Mad Marv isn’t a big fan of that approach, and that’s putting it nicely.

See, guys like Marv will never forget the F&I kiosk, which was supposed to replace the F&I manager by allowing customers to select the protections they want without being sold. But as we all found out, people don’t buy if they’re not sold.

Again, I get it, but I think we all need to take a step back. I know the F&I office has been under attack for decades, and I would never suggest that we lower our guard. But I do think we need to separate attempts at eliminating the F&I office from efforts to update a department that hasn’t seen significant change since the advent of the F&I menu.

And I’m sorry, but the "Why fix what ‘ain’t’ broke" argument isn’t going to work for much longer. Besides, many of you like to say it’s not the menu that sells the product; it’s the producer. Well, if it doesn’t matter whether you’re selling on a napkin or a paper menu, then selling off of an iPad shouldn’t be a big deal, either.

Look, everyone is trying to figure out what today’s Internet customer wants. And I think Marv said it best when he wrote that the only opinion that matters is the customer’s. That was about the only thing we agreed on last month when we debated the mobile menu through e-mail, text, on the phone and even on the magazine’s Facebook page. I get his argument, but I just didn’t like seeing companies being crucified for trying to update the F&I office, which is what was happening.

And besides, your dealers are investing a lot of money on delivering a high-tech experience to customers. Why should F&I be any different? I’m not suggesting a complete overhaul of the F&I office; I’m merely suggesting we examine every opportunity to update the look and feel of the experience we deliver.

And hey, it was only a few years ago that the hottest feature among inventory-management tools was having access to a vehicle history report. We can all agree those solutions deliver a lot more than that these days. But those newer features only took hold after dealers tried them out and provided software makers with feedback.

And we need to do the same, because the last thing we want is our dealer rolling out a new selling system in the F&I department because some tech vendor promised it will sell more products and drive up profits. We all know those promises are the kiss of death when it comes to our payplans, so start talking about these tools in your dealership. Start identifying where they’ll work, how they’ll work and what features you’ll need to make them work.

It’s a great time to be in F&I. Everything is being questioned and analyzed, which means we have the opportunity to write our future. So, let’s get in the discussion, and not let our future be dictated to us.

Comments

  1. 1. William V. Fowler [ April 19, 2012 @ 02:27PM ]

    Like it or not the F&I Menu system will be going through big change when you consider the many factors that will come to the surface in the very near future concerning loan origination in compliance with the new “Dodd Frank Act, the Consumer Financial Protection Act and the Interagency Supervisory Guidance on Allowance for Loan and Lease Losses, “ALLL”). Each business in this field will need to consider how these changes will affect them. E-net Financial Services, Inc. is in the final stage of developing a new F&I Menu program to meet these new regulations.

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