The main ballroom at the Hilton Convention Center was packed for this year’s F&I Managers Roundtable. F&I and Showroom’s ‘Mad’ Marv Eleazer, a 20-year veteran of the finance office at Langdale Ford in Valdosta, Ga., convened a panel of five top F&I managers and directors to share their strategies for success with the gathered crowd.
Joining Eleazer on the stage were Angelia Butts of Jenkins & Wynne in Clarksville, Tenn.; Chris Cochran of Haddad Motor Group in Pittsfield, Mass.; Brown’s Ford of Johnstown (N.Y.)’s Joe Papa; Kelly Wadlinger of Faulkner Nissan in Central Pennsylvania; and Tom Wilson, formerly of the Denver-area McDonald Auto Group.
No two panelists shared the same location, background or career path, so opinions were expected to diverge wildly. … And, in some cases, they did. But each seemed to understand that every dealer, store and market is different, and it’s up to each F&I manager to determine what works best for his or her store.
Case in point: Wilson relocated to Denver after winning last year’s F&I Dealer of the Year award with Riverside Auto Group in Escanaba, a city of 13,000 located in Michigan’s Upper Peninsula. Eleazer kicked off the discussion by asking Wilson how he adapted his winning ways to a new market.
Eleazer: Tom, before you joined McDonald, you were successful at establishing relationships with local credit unions when you were working for Riverside Auto Group. You had a seven-store group running 2.14 percent F&I charge-backs. What issues did you solve and how?
Wilson: I think one of the important things to do when you land in a new area is to stick your head out and take a look around. I actually had four very unique markets, and it took a little bit of learning to get the lay of the land. When I started looking at [Riverside’s] liens, a lot of the same credit unions were popping up as outside finance. So I just went around and shook hands and started talking to people: “Hey, I’m new. I have a weird accent. I haven’t learned yours yet. But if you need to, you can call me.”
So we just started chipping away at it. The finance was just around 50 percent. There were some issues the stores had with the credit unions; issues the credit unions had with the stores. I kind of bridged that gap and started talking to them. My advice to anybody is if you’ve got local lenders out there, strive to meet their expectations, but don’t be afraid to pick up the phone.
Eleazer: Angelia, you’ve had 18 years with the same group. What can you tell us about the value you place on teamwork?
Butts: Teamwork is the ultimate goal every day, on every deal, from start to finish. F&I happens to be the finish, so you always want to finish the race as strong as you can. But the ultimate goal is to get across the line.
Eleazer: Angelia, how many people do you have under your direct charge?
Butts: I have four. One gentleman works with me in our central hub for all new and used trucks. We have a 62 percent return on all of our business, so it’s very good for the customer to be able to come in and see the same finance manager that they had before. I have a lady who is completely dedicated on the Honda side. I also have the Ford lady and a full-time floater. And any time one of those integral parts is not available, then the floater is sitting in that chair to service that department just as if they were there.
Eleazer: So there is never an absence at any of the F&I seats?
Butts: We schedule down to the lunch hour. And of course you have to be flexible when you do that. People have families and they want to go to special events so we just pick up the slack and tow the rope. … If someone sees something they believe in and they feel like it’s working — [whether] it’s how they said hello or goodbye, or if that close really worked for them — I want them to come tell me immediately. I want to give those accolades where they’re due. Always giving that back to them is miles above just saying, “You did a good job.”
Eleazer: Chris, what was the inspiration behind the special finance operation you created for your franchised dealer group?
Cochran: It was born out of a lot of need and a little bit of greed. 2008, 2009 and 2010 were our best three years ever, [but] I was seeing a lot of customers who couldn’t get approved through us and were going to bigger city dealers. I didn’t like that, because it was costing me money. So I reached out to lenders, talking to them, trying to educate myself. I started a Facebook page for Captain Credit and started generating some deals. And once I was getting just a few deals a month out of it, I decided to go to the management staff and request an ad budget and a pay plan. They obliged, thankfully.
Eleazer: Are you using the same menu process on Captain Credit as you are on the front?
Cochran: Absolutely. One hundred percent of the product to everybody, every time. The difference with subprime is that a lot of times your banks are going to cap you on what you’re allowed to sell the customer as far as income or products. The customer is still offered everything; they’re just told that they may need to come up with some additional cash down to obtain the product. But, yes, same menu, every time.
Eleazer: Kelly, you oversee 10 people in your operation. Can you describe some of the checks and balances you employ to make sure they all remain on task every day?
Wadlinger: I don’t care what it takes to motivate them. I want them to want to work for me. … But I also think it’s very important to make sure they understand where they are and where they fall among their peers. What is your profit per retail unit? What is your penetration? How are you comparing with your coworkers? Showing them where they are is one of the biggest things I can do…Like Angelia said, don’t just beat them up. Show them the right path and encourage them to follow it.
Eleazer: Kelly, F&I product [sales] increased by 40 percent since you assumed control in 2008. What was your secret?
Wadlinger: I worked to eliminate the fear factor. “I don’t want to go out there at that rate. They might already [have visited] their credit union.” Or, “I can only cap my service contract off at $500 profit because they’re going to work me down to it anyway.” Pennsylvania is a 100 percent markup state, so I was like, “We’re doing everything at 100 percent markup, and we’re marking everything up two points.” That made it really easy to improve quickly.
Eleazer: You have discovered a unique way of recruiting young people. Can you elaborate?
Wadlinger: My degree is in biology, so this isn’t the career path I had intended. So I do a lot of recruiting out of colleges. I visit their Websites and look through all the résumés that kids have posted. But I don’t look for the typical sales personality. … Not focusing on, “This person screams ‘sales,’” but, “This person screams ‘dedication.’”
Then, I send an e-mail: “There is no way I saw myself in the car business. I can understand if you don’t see yourself in the car business. But let me tell you, there’s a lot of potential here. Come in and talk to me. See what you think.”
Eleazer: Joe, you have the distinction of having the longest tenure in your group with 26 years of service. You’ve held every front-end position your store has, and yet you maintain that F&I is your passion. Please tell us why.
Papa: I like the fact that I’m directly responsible for my own performance rather than indirectly through sales staff that may not have the same motivation that I do. I also enjoy the F&I position because of the variety of duties I have in dealing with lenders, rates and products. And I also like the fact that it’s kind of the central hub of the sales department. I find it exhilarating to generate such a large portion of the department’s income in such a short period of time.
A salesperson spends one to three hours with the customer for ‘X’ amount of dollars. I spend 20 to 30 minutes with the customer for ‘X’ amount of dollars. I like that aspect of my job. I like the instant gratification of the F&I department. I also like using the detailed performance tracking tools, which allows me to set and monitor goals on a variety of areas — acceptance rates, profit per product, PVR, etc. That allows me to pinpoint my areas of opportunities for improvement. I enjoy all those different aspects of the F&I office.
Eleazer: Joe, regarding the menu, would you explain your attitude toward the concept of simplicity?
Papa: When I started in F&I in 1996, I’d been selling cars for 11 years, and we did not have an F&I department. The owner sent me to a five-day course sponsored by Universal Underwriters. It was a general overview of the department and what your basic duties were, but they really didn’t train you to sell products. So, for two or three years, I did not use a menu at all. And I did OK. But if I told you what my numbers were back then, I would be embarrassed.
I believe the simplest [menu] is the best. You need to be clear and concise with your customers. You have to be confident in your presentation and you have to believe in your products. If you don’t have all of those going for you, your customer can sense that.
Eleazer: Can an F&I manager have too many products?
Papa: Absolutely. If we have too many products, it takes too long to properly describe each one, which leads to too long of a presentation. You’re going to lose [the customer’s] focus and you’re going to come across as a long-winded salesman. We need four or five core products that we believe in that we can present with enthusiasm and confidence and transfer that to the customer. I also think we’re a lot more likely to increase our acceptance rates with fewer products.[PAGEBREAK]
Eleazer: Can any of you elaborate on your experience managing contracts in transit?
Wadlinger: I’m a big believer in e-contracting and fax funding. I was hesitant at first. [Now,] I have deals funded before customers even leave. That keeps your controller and your general manager happy, and you’re not worrying about [funding] three or four days down the road.
Butts: We send our deals to the accounting department and they actually break them down and send them off. But for special finance, we fund those before they go to the office. So each person is tracking their funding every day, [and] I’m tracking it with them. … You’re not chasing a funding delay notice, because everyone is getting it done.
Eleazer: Do you practice the customer interview at your store?
Wilson: If your customer doesn’t want to talk to you, then don’t do it. … I’ve worked in areas where I never saw the customer until they showed up cold in my office. My numbers didn’t change. Now, I don’t have a problem with introducing yourself. And if you have an incomplete credit application, go out and gather the information. My goal is to get that deal out of the salesperson’s hands as quickly as possible and get it into my paws.
Wadlinger: I cringe when trainers tell me, “If you do the interview properly, when they say they don’t need the warranty, you can throw it back in their face and say, ‘You do, because you told me you drive 20,000 miles a year.’” Isn’t that too confrontational?
Cochran: There are better ways to overcome that [objection] without being confrontational and making them feel stupid for not taking it. I don’t know if that’s the point of the interview, but I think [that’s often] where it ends up.
Papa: I rarely do an interview, but I would like to shake their hand and review their credit application with them. … I don’t think there’s anything wrong with that.
Cochran: The beauty of this business is that you can do it whatever way works for you. … If it doesn’t affect your numbers, there’s nothing wrong with it.