Every one of us wants instantaneous gratification — whether the desire is six-pack abs, weight loss or increased business profits. Yet, as every businessperson knows, good results are the fruit of a committed, well-planned endeavor. No one builds muscle, loses weight or improves F&I performance if they aren’t committed to work a plan that replaces harmful or ineffective habits with practices that will help achieve their goals.
Top strength trainer Martin Rooney put it this way: “The secret is not about talent or ability. In the end, the secret is quite simple to understand: If you really want to be a better writer, reader, dancer, parent, worker, etc., you have to do those [things that can make you better] daily …”
The same is true for F&I performance. F&I staff who consistently adhere to proven processes on every deal will most always enjoy high product penetrations and more profitable per-copy averages.
Process Builds Habit
The Oxford Dictionary defines “process” as “a series of actions or steps taken in order to achieve a particular end.” What that means is process focuses and directs activities. And in F&I, one of the best processes introduced was the F&I menu. Proper menu use affords greater professionalism and productivity in the F&I office. It also ensures that every customer is presented every product the dealership offers, and that they are given a choice to purchase or decline their options.
But as much as the paper menu improves the F&I presentation, it is still susceptible to human error and human preference — the latter referring to an F&I producer who may choose not to use the menu on every customer or at all. And when that happens, profitability and compliance are at risk.
An emenu process that’s driven by software also delivers credible tracking and reporting mechanisms that bring accountability to your F&I department. That’s something a paper menu simply can’t do.
Build F&I Muscle
Software-driven menu systems also eliminate the human factor in F&I presentations by establishing correct presentation procedures that drive consistency. Such systems also make it easier and faster for F&I managers to assemble a portfolio of products that meet the needs of buyers. As a result, every customer is being given a thorough and timely F&I product presentation that doesn’t run afoul of state and federal laws.
More importantly, an emenu process ensures that a menu is presented to every customer. And as we all know, consistent use of the right tool — whether it’s a menu or treadmill — always produces better results.
In fact, studies conducted by MaximTrak show that the routine use of emenu technology to prepare and present F&I options to customers dramatically boosts profit per vehicle retailed (PVR) dollars. The dealers reviewed in our studies reported new-car and used-car PVR boosts of $302 and $203, respectively, when they used F&I menu software vs. no menu at all. On average, the PVR lift for these dealers was 27%, with many realizing increases of more than 30%.
And as our ongoing studies continue to demonstrate, the consistent use of emenu processes with every opportunity does improve F&I performance. But before you decide to make any change to your current F&I process, you need a plan. And that plan needs to be written down for everyone to see and digest. To help, check out the following steps you need to take before making any change to your F&I department.
Step 1: Define the Strategy
A clearly defined strategy paints a vision and goal for F&I staff to achieve. Here’s an example of what a defined strategy might look like:
“Our F&I strategy is to be the most knowledgeable F&I dealership in our town. Our associates are equipped with tools and training on the products we sell. Our associates have developed the interpersonal skills to engage customers in ways that build trust. We value customers’ time and their desire to purchase value. Therefore, we use the best F&I technologies, training and processes to ensure a better F&I experience that saves customers time and delivers to them products of high value.”
Step 2: Write the Plan
Ideas are just that if you don’t take the time to write them down. And when you do, those ideas become clearer and more focused. Start by writing down a statement that defines what change or changes your strategy will drive. Also make sure to list what your strategy will involve and what it’s designed to accomplish. In other words, you need to state how your team will get there, who will be involved and who will lead the charge. You also have to create a timeline for your plan, and state when you expect your goals to be reached.
So, if driving up F&I performance is what you hope to accomplish, write down your goals for PVR and product penetrations, and state when you hope to realize those increases. The plan should also describe how the goals are to be accomplished. In other words, state what needs to happen, what type of training F&I producers will receive, what new products will be added, and what technologies will be employed to drive the change.
Step 3: Keep It Simple
Productivity tools that are complicated to learn and use are the quickest way to spoil a good plan, so be sure to choose tools that make adherence to the plan simple. Note that adequate training on vendor products is a must, as it will ensure that the tool is used properly.
Step 4: Track Behavior
Reporting tools that track adherence to the F&I strategy and plan help management correct inconsistent behaviors quickly through retraining. Tracking also provides insights into how a more consistent F&I process improves F&I results and benefits the wallets of F&I associates.
Easy-to-use reporting tools also hold employees accountable to the strategy. They provide business insights that not only help management identify whether the tools are used consistently, but also allows management to view performance by each individual user. That means you can see individual gains by vehicle type, transaction type and product type. And if you operate a dealer group, such systems will allow you to view performance by store, among other insights.
No Pain, No Gain
Bottom line, there are no shortcuts to building bigger F&I muscles. But if you can commit to a plan that calls for the use of emenu technology, you can count on such a tool to drive a more professional F&I presentation, regardless of the producer’s skill level.
There are other benefits as well, such as increased transparency. And that transparency lends itself to compliance, particularly in how aftermarket products and services are sold in the F&I office. Standardization of the F&I product penetration also means more consistency in how products are presented, which reduces miscommunication and improves your store’s CSI scores.
More importantly, an emenu process will allow your management team to monitor and measure producers in real time. And when you can do that, you can correct issues quicker and before they weigh down your department’s monthly output. Hey, you can’t expect what you don’t inspect.