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5 Roadblocks to F&I Success

May 2010, F&I and Showroom - Feature

by Rick McCormick - Also by this author

For an F&I professional to realize any amount of success, he or she must accept the inevitable, capitalize on changing conditions, and turn those challenges into profit-generating opportunities. But even if a F&I manager can handle all of that, he or she can’t get it done alone.

Today’s F&I manager needs access to consistent training. They also have to be involved in the training of the sales department. Most of all, they need the respect of senior management. Once empowered, a F&I manager can repay dealers with record profits and income. But before any of that can happen, dealers must address the five obstacles hampering the progress of this key department.

The Ever-Changing Customer

Let’s face it, the customers who entered the economic recession more than 18 months ago aren’t the same people today. They have had to learn how to say “No” to the little extras they became accustomed to during the fast times. Unfortunately, this new breed of customer can’t decline extras offered in the F&I office fast enough. So, how do we meet this challenge? We have to provide a buying experience in which customers learn things they didn’t know before they entered the office.

A vehicle service contract is more critical today than ever before, yet customers believe the exact opposite. We have to help them see how vehicles have changed. Here’s an example: The technology equipping today’s vehicles has dramatically changed the way cars and trucks are built and repaired. Even low-end cars currently have 30 to 50 engine control units embedded in the body, doors, dash, roof, trunk, seats and just about everywhere else the vehicle’s designer found space. That’s why repairing a power window is no longer as simple as replacing a motor; today, it requires a new module that can cost as much as $1,000. 

And just think about this: Boeing’s new 787 Dreamliner requires approximately 6.5 million lines of software code to operate its avionics and onboard support systems. Today’s vehicle, on the other hand, executes tens of millions of lines of code, controlling everything from engine performance to the instrument cluster. It just doesn’t make sense to own a vehicle today without having a service contract. Just be sure to relay these facts both visually and verbally when making the pitch to your customers.

Poor Time Management

Today’s F&I office has become the hub of the dealership, and our daily accomplishments are a direct reflection of the priorities we have established. Serving customers comes first, yet we can go weeks at a time without involving ourselves in training activity that will help us improve our skills and increase sales. There’s also the paperwork side of the F&I manager’s job. It must be done in a timely and efficient manner to facilitate cash flow.

F&I professionals who cannot establish daily priorities will find it difficult to manage their department, let alone maintain the penetration levels and income the dealership needs. That’s why it’s key for F&I managers to review their daily duties to help establish a priority list. Just make sure that list is shared with the management team. From there, formulate a strategy to help you focus on what you do best — serving customers and producing profit.

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