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Better Selling Through Technology

October 2007, F&I and Showroom - Feature

by Kelli Wood - Also by this author

Ask Hugh Abernethy about F&I product sales and the vice president of DealerTrack’s Aftermarket Network Solutions talks about how product providers are reporting banner years. He’ll say GAP is becoming an increasingly important product, and he believes that the service contract business will become more sophisticated over the next two years. Ask him what will drive this innovation and he responds, “Menus.”

Always viewed as both a compliance and presentation tool, the F&I menu is evolving into a great selling tool. Driving this are features such as real-time ratings for VSC products and declination sheets that provide one additional chance for a dealer to sell products.

“It started out that menus were just for compliance,” says Phil Battista, co-CEO of MenuVantage. “Now, what we’re seeing is the menu evolving into a real selling system.”

The success of menus is increasing requests from dealers for more features that can streamline the process, either through customization features or through integration of pricing for aftermarket products. This is also causing more and more providers to partner with software makers.

“More and more dealers are asking for more of these types of tools, such as real-time rating [for VSC plans],” DealerTrack’s Abernethy says.

Core Benefits Never Change

Despite the onset of newer features, the core benefits of a menu haven’t changed.

“When we weren’t using menu systems, you would just try to present something to the customer without them being able to look, see, feel and touch the product,” says Jay Mathews of Hall Ford, Newport News, Va., who has used Innovative Aftermarket Systems (IAS)’s menu for approximately a year. “So now that we have different [visual tools] sitting in the office, this really gives us the opportunity to sit down and go over them. And any questions customers may have, they look right at the product and we can address those concerns immediately.”

Matt Nowiki, director of information technology at IAS, says, “I think when the concept of menu selling was first introduced, most dealers didn’t think that customers would buy more if the products were actually presented to them. But that’s not the case. Since we’ve introduced menu selling, in every situation we see finance numbers go up as far as number of products sold, as well as profits per product.”

As for those F&I managers who prefer paper menus because they allow them to configure a variety of options, Hall Ford’s Mathews says electronic menus can do that and more.

“I’d have to say organization-wise, our menu really increased the profitability of the dealership and the company as a whole,” he says. “And it’s provided new opportunities for us to expand the company.”

Menu Grooming: Getting Creative

Most dealers talk about menu configurations that utilize a multi-tiered approach. Platinum, gold, silver and bronze package formations are typical setups used by dealers. But one insider says there are other arrangements to be considered.

Todd Johnson, sales manager for Aftermarket Network Solutions at DealerTrack, says creating a multi-tiered package based on price can sometimes work against a sale, as price-conscious consumers tend to look toward the lowest-priced package.

He suggests that rather than organizing menus based on quantity or price, the manager can categorize products by the benefits they offer to the customer. Using package titles such as “mechanical coverage” and “security” are what he recommends. Johnson says a good closing line could be, “Which package looks best to you?”

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