When I was growing up, my father was a full-time student and part-time pastor. And when I became a car salesman, I assumed he’d be disappointed with my career choice. Boy was I wrong. His reaction: “That’s fantastic!”
“Really?” I responded in astonishment.
“Absolutely,” he said. “The United States is a capitalist country, so sales is one of the important professions in this country. Nothing needs to be manufactured, nothing needs to be advertised and nothing needs to be shipped until a salesperson first sells something. I couldn’t be more proud of you.”
That was not the response I was expecting, but he wasn’t done. “Just promise me one thing son: Do it well, and do it right.”
That memory popped into my head after making a few dealer visits. See, as part of the service my firm offers, we often evaluate a dealership’s sales and F&I processes to identify compliance concerns, determine why it’s not as profitable as it should be, and to understand reasons for the operation’s poor customer satisfaction scores. And well, some recent observations have proven to be both eye-opening and discouraging, especially when you’re in the business of training F&I managers.
One of the dealerships we visited sold three vehicles the day we were there. On the first deal, it took the F&I manager 29 minutes to load the information into the computer, print some initial forms and create a menu.
The next deal took 31 minutes. On the third deal, it took 40 minutes after agreeing to buy the car for the customer to finally enter the F&I office, so it wasn’t difficult to see why customers weren’t satisfied with the operation’s F&I experience.
At another dealership, customers had to sit at four different desks to buy a car. Once they finished at the salesperson’s desk, customers were turned over to the “insurance lady.” She verified their insurance and offered to provide a comparison quote, as well as a quote on any other insurance needs. Buyers were then escorted to the accessory department to be sold a remote start, window tint and fuzzy dice for their rearview mirror. The baton passing was too much for one customer, who uttered to the F&I manager: “How many more people am I going to have to talk to before I can go home?”
Folks, it shouldn’t be that difficult to buy a car.
I watched another F&I manager take 21 minutes to go through the customer’s options on the menu. The customer was forced to sit and endure product presentation after product presentation. Like the customer, I was exhausted by the time he got through all their options. And after the F&I manager finally finished with his well-rehearsed word-tracks, the customer said, “I think I’m going to pass.”
Not willing to take “No” for an answer, the F&I manager responded: “Why? When was the last time you bought 50 separate computers at once?”
Why not just be direct, I thought, and say: “Are you stupid, or just ignorant?” Well, he didn’t. Instead, he proceeded to tell the customer that an airbag module costs $1,200, takes five hours of labor to get and another five hours to replace the old module.
Here’s a tip: if you’re too lazy to find out what a part really costs, and the actual labor required to replace the old part, save yourself some time. Don’t limit yourself to merely exaggerating the cost of repairs. Go big and tell them, like Obamacare, they’ll have to pay a penalty if they don’t buy the protection. In fact, if you’re going to lie and make up stuff to sell a service contract, why waste your talents in F&I? Go right into politics.
At yet another dealership, I watched an F&I manager spend all of three minutes having the customer sign a couple of miscellaneous forms before reviewing his menu and pitching products. The customer showed zero interest in what he was selling, mainly because the producer never asked a single needs-discovery question. All he cared about was getting that menu in front of the customer as quickly as possible so he could start making his pitch. When the customer didn’t bite on the $2,500 service contract, the producer’s finely tuned selling skills were on full display.
“I don’t know if he’ll do it, but if I can get my sales manager to let me sell it to you at our cost of $1,600, would you take it?” he asked.
Be a Problem-Solver
Every minute the customer spends in your office must add genuine value to his or her purchase experience, regardless of the F&I sales process your department follows. The process has to be just as valuable to customers as it is to the dealership. Otherwise, we’re wasting their time. And customers hate people who waste their time. Today’s customer demands a beneficial F&I experience that expedites the delivery process, not prolongs it. What they need is an F&I producer who knows what he or she is talking about.
What customers also deserve is an efficient F&I process that is both professional and transparent. That means no canned sales pitches, misinformation or if-I-could, would-ya deals. It also requires that you be involved early in the sale — from the credit application on. And once the customer completes a credit application, your salespeople should be trained to say, “Let me get our business manager to pull your credit bureau report.”
An F&I manager must review and discuss the credit application and credit bureau report with the customer prior to submission to a lender. This allows you to understand the customer’s financial situation, discover their needs and confirm the details of the transaction. Every customer has a story. It’s our job to hear it so we can paint a clear picture of their financial situation for the finance source, and determine why this customer needs the products we offer.
As the F&I manager, it’s critical that you are perceived by customers as someone helping them get the car they want at a payment they can afford, not just someone trying to sell them additional products. Customers need to see that the F&I manager is actually involved in arranging their financing. Otherwise, you’re not perceived as helping them; you’re just trying to sell them some stuff.
When possible, let the customer see you submit his or her deal. Explain why you have multiple lenders and tell them that different lenders have tier levels. Reveal to them that some finance sources are more concerned with the debt-to-income ratio, while others are focused on the payment-to-income ratio. Tell them some finance sources are more concerned about actual cash down, while others focus on percent of advance. Lastly, explain to the customer how they might improve their credit score. Customers need to recognize that you are a finance professional who is there to help them, and who will be their personal advocate with the lender.
Today, the F&I process has to be perceived by customers as expediting, not prolonging, the delivery of their vehicle. Most importantly, the process needs to add real value to the customer’s purchase experience.
Remember, every customer asks this question: “Is this person trying to help me, or trying to sell me?” How your customers answer that question will determine whether or not you’re going to sell them your products. If they think you are trying to help them, they will be very interested in what you have to say. If they think you are trying to sell them, they couldn’t care less what you have to say.
With today’s extremely competitive retail environment and increasing regulatory oversight, what you do in the F&I office is vitally important to both your dealership and to the customer. Like my father told me, do it well, and do it right.