In July 1980, at the tender age of 22, Bob Serpentini became the youngest first-generation dealer to ever open a Chevrolet franchise. He had worked as a sales manager at the manufacturer’s point in Orrville, Ohio, one hour south of Cleveland, for about nine months when he decided to buy it.
“I’ve always been aggressive, for lack of a better word. I like what I do,” says Serpentini, who started out selling cars for Spitzer Auto Group in the Cleveland/Akron area. “Back then I was excited to have one dealership. Then, as you start doing well, you think one is great, but another would be better.”
Serpentini, 56, now operates the Serpentini Auto Group, which is comprised of three Ohio stores. At this year’s Industry Summit, Serpentini Chevrolet of Strongsville was named the 2013 F&I Dealer of the Year by F&I and Showroom magazine.
Serpentini was one of six finalists vying for The Warranty Group-sponsored award. The field also included Missouri-based Cable Dahmer Automotive Group; Austin, Texas-based First Texas Honda; Salt Lake City’s Ken Garff Automotive Group; Cincinnati’s Kings Toyota; and Abilene, Texas-based Star Dodge Chrysler Jeep Ram Hyundai.
The Tale of the Tape
The Strongsville staff boasts solid F&I numbers. The dealership averages a stellar 2.5 products per deal on 300 to 350 units sold per month, with product sales accounting for two-thirds of the group’s per-copy average, which sits well north of $1,000. The dealership’s GAP offering leads the way with a 61 percent penetration rate, followed by vehicle service contracts and tire-and-wheel coverage with acceptance rates of 45 and 38 percent, respectively. The store’s charge-back rate sits at an enviable sub-7 percent.
“It’s funny. It didn’t just all of a sudden happen — Bam! We’re at great numbers,” Serpentini says. “It was kind of a growth pattern. We saw that we had some room to grow.”
In 2009, Serpentini and Strongsville’s general manager, Jeanine Hein, hired Nate Gault, now 32, as a producing F&I director. Gault has been managing the finance function of the store’s F&I process to allow his seven F&I producers to focus on selling product.
“Nate has great ability. He’s very driven. He’s a goal-oriented guy,” Serpentini says. “He’s good at working with other people and creating a team.”
Serpentini credits Gault with restructuring the F&I team’s compensation plan. He switched from individual commissions to a team format in which income is pooled and distributed evenly among producers. The pooled income is based on total department performance, Gault says, so if a producer is having a bad month or a stretch of bad deals, the rest of the team is there to help pick him or her up. “My understanding of how a team is going to perform or going to work is based on if they’re truly a team. If you’re truly a team, you get paid as a team.”
Only a handful of dealerships in Indiana and Ohio pool their money, says Matt Mahar, a regional vice president of Resource Automotive. He and his company’s connection with Serpentini dates back to 2006.
“The reason it works so well in Strongsville is because they look at it as an opportunity to help each other,” Mahar says. “They are all working for the same team and pooling their money together.”
Every good team needs strong players, and Serpentini has developed a strategy to cultivate and maintain his squad. He cites his policy of promoting from within as a key factor in maintaining longevity for employees and success for the business.
“I don’t believe in going and getting someone from the outside,” Serpentini says. “That way there’s no hired-gun mentality of waiting for the next best offer.”
Gault has endorsed the hiring strategy and noted that it has become increasingly tougher to hire F&I staff from outside. All of his F&I managers were previous salespeople at the Strongsville location. And they all have the experience to help close deals.
“I want my F&I producers to understand the sales process,” Gault says. “They’ve all been there and have done well at it. They are going to perform a lot better and keep the relationship between the F&I and sales departments strong.”
Serpentini also believes a strong team needs fresh, well-rested players. To that end, he has implemented a work schedule that balances work and personal life. “Our business is not an easy business, and one of the toughest things is attracting quality people,” he says. “People have to have a life. If there’s no balance, it can’t last.”
Most employees work 40 to 45 hours per week and enjoy a flexible scheduling system. The store is open seven days a week, but management wants each staffer to take days off whenever they’re needed. Hein works with employees to help ensure the work-life balance doesn’t get out of whack.
Gault also utilizes the Predictive Index (PI) to recruit and maintain his staff by examining the results of the system’s personality assessment. His favorite score is P36, which indicates that a person is a “seller and a teller,” ideal for F&I directors seeking producers who don’t pitch product too hard.
“The PI highlights a candidate’s strong traits and weaknesses,” Gault says. “It basically tells us a little more about them. It also tells us how to manage that person.”
The two-part online exam offers users about 60 personality traits, such as sympathetic or successful, that they mark if they feel people perceive them as such. On the second part, Gault says, they mark the personality traits they believe they have themselves.
“It’s pretty spot-on. You can’t really fool the system,” he says. “Anytime a producer is not doing well, you can always have them take a PI and pretty much figure it out.” Gault believes the process has helped the staff become an efficient, highly functioning team. “Our start-to-finish F&I process, from the time the deal gets to my hands, is about 25 to 30 minutes.”
Gault structures every deal and picks and chooses which bank to use for financing. He tries to maintain a balanced spread and avoids giving any lender preferential treatment. While Gault structures and loads the deal, an F&I manager engages in a two- to three-minute customer interview to find out about the customer’s insurance coverage, intended use of the vehicle and how long they plan on keeping it.
“We’re real big into menu selling and offering every product every time,” Gault says. “Our other big thing is CSI. Our CSI average is between 98 and 99 percent and we take it to heart.”
If an F&I manager is unable to sell any products, another manager will take the “TO.” Gault stands ready to take a final turn before pushing the deal through.
Gault also credits Resource Automotive and the company’s products and training for boosting the F&I department’s bottom line.
“They help us maintain our compliance and help us with deal audits. They help make sure everything we do, we’re maximizing the benefit for the customers,” Gault says. “We average 2.5 products a deal, which is well above the industry average.”
Gault is in weekly contact with Resource Automotive, and Mahar or another representative visits the store a few times a month to review progress and help with claims. Mahar has been working with Serpentini Chevrolet since 2006. His company provides the store’s service contracts, GAP, tire-and-wheel, limited service plans on used cars and prepaid maintenance packages.
Serpentini Chevrolet of Strongsville is located about 20 miles from Cleveland Hopkins International Airport and even closer to the Strongsville’s SouthPark Mall. The dealership serves a growing blue- and white-collar demographic. It’s a customer base that favors leasing. At one point, Gault says, the dealership was doing $1 million to $2 million lease contracts a month through GM Financial.
“We have a strong relationship with [GM Financial],” Gault says, noting that his F&I team’s per-copy average on lease deals is well above the industry average. “We were their pioneers in leasing. In fact, anytime they launch a new product, we participate in their trial program.”
The store also makes available two credit counselors to customers with bumpy credit. Gault estimates that 33 percent of the store’s customers fall in the subprime category, noting the process remains the same no matter where the customer falls in the credit spectrum.
“We use a thorough guest interview to find out the customer’s needs and land them on a car,” Gault explains. “While our sales professionals are presenting the vehicle, my secondary finance managers are working hard to get the best approval possible. By the time customers are ready to work the numbers, we already have an approval for them, so it’s a fairly easy close.”
Mahar says Serpentini and Gault are also big about compliance. Each F&I manager must pass an online compliance test and report their numbers to Mahar every Monday. He produces a weekly scorecard for all three stores and sends it to Serpentini and his managers.
“It helps drive that competition to be the best,” Mahar says. “Nobody really wants to be at the bottom of that list.”
The same goes for another list Gault generates using his department’s MenuVantage menu system. It’s a report that shows the types of finance deals each source purchased for the month, and Gault presents the report to his reps every 60 days.
“I don’t have one bank that gets most of the business, so the report tells them where they’re at,” Gault says. “And every bank is 100 percent happy.”
Ash Bauer, executive vice president of Resource Automotive, says Serpentini’s group has high standards when it comes to performance and compliance. He gives Serpentini credit for maintaining a high level of energy over the decades. “It doesn’t matter if it’s seven in the morning or seven at night, he’s a born marketer,” he says. “Bob is constantly selling, but you really don’t feel it. It’s just his nature; he’s going to be talking to everybody.”
Serpentini and his wife, Kathy, have become active members of the community. The auto group has sponsored the local high school’s Serpentini Chevrolet Stadium, donating $100,000 for field renovations. The Serpentinis are also big supporters of Little League baseball and youth soccer teams.
Each dealership also donates a car to their community as a raffle prize to help raise money for school booster programs. The Strongsville store actually donates three cars, one to the public high school, another to a neighboring high school and another to St. Vincent-St. Mary High School.
Each booster club sells raffle tickets and splits what they raise with the school. The campaign typically raises $35,000 to $55,000 a year. Serpentini notes that St. Vincent-St. Mary has received a car each year since the 1990s and has raised more than $1 million selling raffle tickets. Annual ticket sales range between $70,000 and $90,000, he adds.
“I really believe it’s about starting things right, and anything good starts with a good foundation,” he says. “When kids are raised well and within a good environment, they’ll have greater opportunities.”
Serpentini’s infectious energy is evident when he reflects upon his dealership’s success and being named F&I Dealer of the Year. “I think it’s always a work in progress,” he says. “This doesn’t mean we’re here. I don’t care how good you are, there’s always room for improvement. There just is.”