The Industry's Leading Source For F&I, Sales And Technology

Software & Technology

Making Your Mark: Technology Offers Everyone an Unfair Advantage

March 2004, F&I and Showroom - Feature

by Editorial Staff

Everyone is searching for an edge. Roger Penske had it when his race car team drove an engine with an extra 150 horsepower to an Indy 500 victory right through a loophole in the rule book. Bill Gates found it in his garage, where he created or re-wrote the operating system for 90 percent of the world's computers. Bruton Smith sure has it--he founded Sonic Automotive (SAH) with a few car dealerships and leveraged his passion for the business and motorsports into the second largest publicly traded auto group and some of the best NASCAR racetracks in the country.

Are these guys special? As the saying goes, "they put their pants on one leg at a time." If there is any difference, it would have to be that characteristic energy that seems to flow from successful people. You know the type. Wherever they are, a whirlwind seems to follow in their wake. People are drawn to them like teenagers to the Ford lot when the new Mustangs hit the ground. They make things happen. But what it seems like, more often than not, is that these people are lucky--they're forever getting the lucky breaks. They seem to have an unfair advantage.

In fact, you're likely reading this magazine in the hopes of learning something which will give you the unfair advantage. Let's face it, your job as an F&I manager is to get prospective buyers to take notice. To listen. To believe what you tell them. So how do you get noticed? How do you get heard--and be sure that your message is a good one? And most importantly, how do you get people to trust your message and believe in you?

Technology plays an important role in today's dealership. If you are not using technology to its maximum extent, you've already given up a significant edge. Many of your fellow F&I practitioners are utilizing computerized menus. Not surprisingly, menu systems caused quite a buzz at this year's NADA convention in Las Vegas.

What's all the buzz about? It appears more and more likely that dealerships which have adopted a menu software process are meeting the criteria for success. Last fall in our first Technology Supplement, Pete Maxwell, executive vice president of the Richmond, Va., Providence Group, talked about his experience with technology from Go Big!, "We've seen dramatic increases in both product penetration and in per retail unit; $300 increases are not unheard of, with warranty penetrations in the 60s and 70s and product penetrations to go right along with that."

According to Eddie Brooks, CEO of Go Big!, "When more product is sold, charge backs are reduced, we're making less on rate participation, and more of the profit we're generating from the finance office stays on the statement. Our customers report that with our process, the time spent in finance is reduced, the experience is less debilitating for the customer, and the F&I component of the store's CSI goes up."

Embracing technology sounds like an awfully simple solution. Could it be the unfair advantage finance managers have been looking for?

Jeff Buchanan, vice president of sales for Life of the South, a mid-sized insurance company providing insurance products and services to dealerships, was asked, "Is using menu software giving some dealerships an unfair advantage?"

"Absolutely not," Jeff replied, "the advantage is open to everybody. Dealerships should seize the opportunity and take control of their own process or they're going to be left behind."

What could be working so well that not using it would cause one to be left behind? Ray Smith, F&I director for Robinson Cadillac Chevrolet in Wheeling, W.Va., told us, "since I started using menu software 18 months ago, I like my job again. The needle has moved for the dealership and for me, personally. I was so pleased I sent Eddie Brooks a picture of me standing on a sailboat in the islands wearing one of his company's t-shirts."

If, after 15 years of bell-to-bell workdays, your computer still has a green screen and the closest you can get to the Internet is text messaging on your cell phone, do not despair. All of the manufacturers have told their dealers that they must get broadband internet access to do business with the factory. We are finding that most dealerships already have fast internet access and PCs everywhere.

Suppose your office is already equipped with a PC and high-speed internet access. Whether you're looking for a change, some extra income, happier customers, or your dealer is worried that making rate will someday be eliminated, you do have an alternative: do a great job selling product. When advocacy groups and legislators put enough pressure on the lenders and they stop letting us make rate participation, is your dealer going to be happy with making an average of $250 per delivery less? You need a plan to make up for the difference.

This is where the menu software comes in. We have found no better tool for a few very important tasks: Number one, we must make offering options to our customers at time of delivery a part of memorializing every transaction. These options could be financial--how are we paying for the vehicle? Are we financing, leasing, or something else?

Number two, we must also offer our product to everyone. Why is this important? Offering things to some people and not others could be construed as discrimination. Finally, it would be extremely wise to have an historical record with the customer's signature on it for what transpired at closing. You should even consider software that prints the menu in Spanish for your non-English-speaking customers.

Menu software providing all of this is available today and being used by dealerships from coast to coast. The CIO of a big auto group told us that with as little as a Windows terminal and a browser, the benefits of compliance and making more profit are just a few clicks away to any dealership willing to try something different. Internet based menu applications also allow for accountability and tracking to be built-in. Training becomes more focused and efficient when the programs the F&I managers are using tell them how they're using it.

The gains can be substantial. Brooks says, "I believe the cost of not going to a menu is far greater than any short-term pain going through the transition...We have a chain of more than twenty stores in the Carolinas that posted a 20 percent net gain in F&I profit in the fourth quarter of 2003, as a group. Their product to dollar ratio went from 28 percent to 50 percent during the same period."

The results are more than financial; by incorporating full disclosure into the presentation, we are doing everything possible to protect ourselves from the litigation now being aimed at our industry. "If a rogue employee does something deceptive or misleading, they're on their own," says Brooks, "The dealership has done everything possible to set itself up for success. This scenario plays so much better in court than not having a plan, no clear policies, no process, and no audit trail."

Once you've decided to pursue menu technology, it's time to choose a software provider. As with any new technology, there is only a small group of companies vying for your menu software dollars. The most obvious difference between the companies is in the delivery method they employ to get the software to you. Some give you a disk or a download to install on your hard drive, which makes the software's performance dependent on how good, or new, your PC is. Others offer on-line versions whose performance doesn't depend so much on your hardware. Web-based applications also allow for modifications, updates, new features, and other enhancements to be automatically available every time you log in. A good analogy would be to say that an application that lives on your hard drive is mostly dead, but a web app is a "living" thing, and the host is able to improve the application without any input from you.

You will find companies that offer menu programs advertising in these pages, or you can go to our website at and browse our "Software & Technology" channel to learn more. One thing for sure, you probably don't want to get left out and let your competition have an unfair advantage, now do you?

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email: