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Walk Before Running

September 26, 2013

So what is the next big tech tool for F&I? That was the question my advisory board asked the magazine to address at the 2013 F&I Conference and Expo. It’s a great question, especially after what I read from Experian Automotive.

According to the firm, 84.5 percent of consumers used a loan or lease to fund their new-vehicle purchase in the second quarter, a record high. Now that percentage does include financing arranged directly with finance sources. Still, that’s a lot of prime candidates for F&I protections, which is why I agree the next-F&I-tech question is a good one.

But are we asking the right question? See, I think we need to first figure out what we need technology to solve. If we need it to help us sell more product, then is a new sales tool what’s really needed? The 13 F&I trainers leading our conference’s educational agenda didn’t think so. They’re not against technology; they just believe success boils down to process, people and training.

Peter Chafetz, a training executive for Allstate Dealer Services, broke it down even more, saying what makes or breaks a transaction is the “belly-to-belly connection” between the customer and the F&I manager. And that was the conclusion — although not as colorful — of a new study from the University of Oxford’s Saïd Business School.

“Retailers that consider the positive impact of a salesperson’s ability to read customers’ moods can select and train salespeople more effectively to deliver quality service,” said Nancy Puccinelli, one of the study’s five authors.

So, if reading customers is what drives a better connection with customers, do we really need a new F&I sales tool? The fact is there are plenty of great menu systems available today that offer features designed to move more product. Some solutions have the producer print out the menu, while others allow the F&I manager to present the menu on their desktop screen, flat-screen display or tablet.

Speaking of tablets, do these mobile menus really represent a new sales tool? Unplugging the menu from a desktop is new, but, to me, these selling solutions simply represent the next step in the F&I menu’s evolution. And if you really think about it, the tablet menu doesn’t address our need to sell more product. It does, however, address customer-resistance to what happens in the F&I office.

What is new are tablet-based interview-and-survey systems. IAS introduced such a tool in 2011, and Dealertrack just rolled out a combo survey-and-menu solution this year. These systems allow sales management to survey customers about their experience before they enter the F&I office, while the F&I office can drop in a few discovery questions to set up the menu presentation. Why I think these tools represent a new approach is because they addresses customer resistance to F&I managers asking about their driving patterns, while also helping general managers head off any CSI issues. Will these systems stick? I think it’s too early to say.

In fact, I think it’s too early to say whether a lot of F&I technologies will stick. Take this fuel-savings calculator I saw one of our F&Idol contestants use. His customer was buying a hybrid and he used the calculator to show her how the money she was saving in gas could be directed to an F&I product purchase. I wondered why more F&I managers weren’t using it — that was until Mad Marv informed me the producer was using a nine-year-old tech tool.

Marv said something else that stuck with me. He said the producer had obviously figured out how to fit the tool into his process. And he was right, as the F&I pro’s transition was smooth and well-practiced. Maybe what we’re looking for already exists. Take e-contracting. I think we really need to rediscover and recommit ourselves to this technology, both on the finance and product side. On the product side, I’m hearing from F&I offices and general agents that there are simply too many players involved. What they want is one system to rule them all. I’m not sure that’s going to happen, but the issue doesn’t seem to be slowing usage.

As for the finance side, the adoption needle seems to be moving in the right direction. Heck, e-contracting was listed in J.D. Power’s U.S. Dealer Financing Satisfaction Study as a major factor in the five-point increase in dealer satisfaction. But what’s great about e-contracting is that it lends itself to compliance. And if finance sources feel more confident having a closer connection to a deal, especially with the Consumer Financial Protection Bureau hovering over everything we do, then let’s commit to it.

See, I believe the future of the F&I office is directly linked to e-contracting. I just don’t think we can keep dreaming up new tools until we take the step we failed to take for more than a decade. We already know the compliance and efficiency benefits; now let’s discover what else e-contracting will allow us to do.

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