Mobile Update

It was supposed to deliver a long overdue update to the F&I office. At the very least, the tablet menu was billed as the next step in the F&I menu’s evolution. Instead, the mobile menu has become a point of contention among F&I professionals, with its harshest critics wondering whether mobile technology even belongs in the F&I office. But for Bowling Green Lincoln Auto Sales, the tablet menu was just what the dealership needed to kick-start an overhaul of its F&I process.

The small-town Ohio dealership was struggling to meet its F&I sales goals while clinging to an outdated step-selling process. So when Bowling Green Lincoln switched F&I product providers in October 2013, the dealership’s new agent pitched a change: implementing a tablet-based F&I tool called iTapMenu.

“There are three things we changed in the store: No. 1, the amount of time in which customers were addressed after they settled on a car — we now conduct an interview within five minutes,” says Chris Meacham, founder of Automotive Integration, a general agency based out of Westerville, Ohio. “No. 2, the iTapMenu is presented within 15 minutes, and No. 3, we did a whole lot of training on how to tee up a menu. In other words, we’re not trying to sell the customer something they don’t need; it’s exactly the opposite.”

Meacham has introduced the technology to 10 of his dealer clients and the results have been solid, he says. At Bowling Green Lincoln, the F&I team has increased production by nearly $300 per vehicle since adopting the tablet-based tool. And now they’re looking to crack the $1,000-per-copy mark.

“It’s been a nice addition,” says John Heffernan, the dealership’s general manager. “It kind of disarms the customer a little bit. And they can interact with it better [than with a traditional paper menu].”

Fear the Hybrid
One of the arguments in favor of the mobile menu is that it matches the way consumers shop. And according to Edmunds.com, 54% of consumers who used mobile devices in the car-shopping process ended up making a purchase. Of those shoppers, 21% used their mobile device throughout the shopping process — even once they reached a brick-and-mortar dealership.

“Customers buying cars now are, in a lot of cases, using a tablet to figure out what they are going to buy,” Meacham explains. “With the iTapMenu, you can get in front of the customer so much faster … then you’re handing them the medium on which they probably made the decision to purchase in the first place. And they are looking at their options on a tablet, choosing which products they want on their deal. And that’s the difference.”

Speaking during a panel discussion at Industry Summit in September, executives from four F&I product companies said that difference is what has them keeping an eye on the tablet menu’s progress. But so far, at least according to The Warranty Group’s Joe Amendola, adoption has been slow.

“We’re not seeing it with our clients,” he said. “I think part of the reason is when you think about what’s being discussed in the F&I office, a lot of it is personal information … so we have to be careful in terms of how we use that mobile app.”

iTapMenu’s inventor, Shawn McCool, rolled out his tool in December 2011. He says several hundred dealerships are currently using his F&I menu application across the United States and Canada. Dealertrack, which rolled out its mobile eMenu in March 2013, put the number of dealers using its solution at more than 500. Officials with IAS, which launched its tablet-based SmartMenu in September 2012, put the number of dealerships using its solution at less than 20.   

Also present on the Industry Summit panel was Ken Tomaro, president of OptionSoft Technologies, which introduced its Mobile Menu in January 2011. He said he does have dealers who swear by his tablet-based tool, but acknowledged that adoption has yet to reach critical mass. However, the executive maintained his belief that mobile has a place in F&I.

“As the youth movement takes place, and the people that have grown up with cell phones from early ages get into our F&I offices, there’s going to be a place for it,” Tomaro said. “But the iPad or mobile devices aren’t going to replace the human contact that needs to take place. Will it at some point? Absolutely. Should your dealership have a mobile process? Absolutely.”

Protective’s Tim Blochowiak also served as a panelist during the discussion. He said there is one scenario to which the mobile menu is perfectly suited. “There’s a groundswell of dealerships using the hybrid model, where salespeople take the customer through the entire process,” he said. “It would seem to me that a salesperson with a mobile device — where they could start discussing payments and options — might make sense. And it might be a good place for us to learn more about that technology.”

His comment is one of the reasons most veteran F&I pros object to the mobile menu: They view it as a threat to the traditional F&I manager role. McCool has defended his tool against such charges in online discussion groups. And he stresses that the tool isn’t meant to replace the F&I manager. However, he does recommend that F&I managers use the iTapMenu outside of their office, which is what he says 90% of his customers do.

“That’s Page 1, Step 1: Use iTap outside of your office,” McCool says, noting that users are realizing, on average, a $175 increase in F&I profit per deal. “We really believe that, because we have the data to support that the change in process is a more profitable one for the dealership.”

Mobilizing F&I
When customers are turned over to F&I at Bowling Green Lincoln, Finance Manager Lisa Kline goes out to the showroom to greet them and conduct a brief interview. She then returns to her office to submit the customer’s credit app and set up the iTapMenu before returning to the show floor — something she says “keeps us from really losing momentum.”

“The paper menu system we had was very time-consuming,” Kline says, adding that the iTapMenu shaved 20 minutes off her prep time. “You literally put your finger on a product, drag it over to the customer’s column and show them it’s only changing their payment by $5 or $6 a month. They see how inexpensive it is and they all of a sudden see more value in it.”

Since implementing the mobile menu, the dealership has added an appearance-protection product from PermaPlate and AAGI’s Vehicle Shield, a bundled product that includes dent-and-ding, tire-and-wheel, windshield repair, key replacement and roadside assistance. The change in menu and the additional products have pushed Kline’s product-per-deal average from 0.5 to 1.4. Meacham says results like this have been typical among his dealer clients who have “adopted the iTapMenu as culture — meaning they use it the majority of the time.”

Monte Sommers, a 20-year industry veteran and finance director at Eastgate Chrysler Jeep Dodge Ram in Indianapolis, is another iTapMenu convert. He admits, however, that it took some convincing before he became a fan.

“One of the biggest challenges at first was just getting away from the old paper menu, because I did that for so long,” he says. “But once you realize it is going to make you more money, and you see it make you more money, that’s when you go, ‘Oh, I can learn anything.’”

Sommers first spoke with F&I and Showroom in 2012 when his dealership was in the midst of a six-month pilot of McCool’s tool. He says the dealership’s current average profit per vehicle retailed (PVR) is upward of $1,450, a $400 increase since making the switch. Sommers also averages between 2.5 and three products per deal, up from about 1.5 with a paper menu.

To get the ball rolling, Eastgate utilizes the iTapMenu’s pre-delivery interview function, which is available to anyone for free in the iTunes App Store. Dealers can customize the questions and the results can be instantly emailed or texted to the F&I manager.

“[The survey] puts everybody at ease when you go out on the showroom floor to first introduce yourself and go over it,” Sommers explains. “In the past, people would come into the F&I office and say, ‘Oh no.’ On the floor, you go out and talk to them, and when they do go into the office to sign paperwork, they feel very comfortable.”

Although the menu can be customized to accommodate up to three columns, Sommers subscribes to McCool’s recommended two-column format. In that configuration, all the recommended products appear in the first column. Customers then drag and drop the protections they want into the second, with their payment adjusting in real time. Sommers says the iTapMenu’s greatest advantage is that it allows him to take a second crack at products his customers initially turn down.

“In the showroom, if you do strike out, when the customer comes back to the F&I office, you’ve got a second opportunity to say, ‘Folks, I want to make sure that I did my job in explaining why most people take advantage of that service contract,’” he says.  

How the mobile menu is presented is another point of contention among veteran F&I managers. They wonder if giving customers more control over the F&I process will actually make a difference in product penetrations. While McCool acknowledges that customer engagement is one of iTap’s main selling points, he is clear that the finance manager still needs to drive the process.

“The F&I manager is definitely controlling the iPad,” he says. “There are certain times when it makes sense to let the customer drag and drop during the presentation. But in terms of the actual device, the F&I manager should be driving that. So we really promote sitting next to the customer during the presentation instead of across

Both Kline and Sommers maintain control of their devices throughout the presentation. Kline has a stand for her iPad and will angle it toward the customer, while Sommers will slide the device to customers and show them how to drag and drop a product.

New Entrants
StoneEagle, a dealership technology solutions provider, will be making its first foray into the mobile menu arena when it unveils its SEcureMenu at the NADA Convention & Expo in January. John Day, the company’s director of business development, stresses that using a tablet menu is “still very much a controlled sales process.”

“We don’t want to just relinquish control of the menu process and give it to the customer,” he says. “The customer doesn’t know what to do. It’s still got to be a very interactive process driven by the finance manager for sure. But again, it’s easy for the customer — especially on a touchscreen — to say, ‘Oh, let me add tire-and-wheel and see what it does to my payment.’”

StoneEagle is currently piloting its menu in 12 dealerships, but Day admits that he’s not seeing a high percentage of dealers opting for a mobile device in the F&I office. “Everyone is talking about using it on the iPad or tablet device, but I just don’t see a lot of people doing it,” Day explains. “At the end of the day, unless that product company that is providing the menu to the dealership is basically walking in and saying, ‘Hey, guys, this is the sales process,’ the dealer has to really commit to making changes. And I don’t know that anyone has figured out the best way to work with a mobile device yet.”

That’s one reason StoneEagle didn’t limit SEcureMenu to a single operating system, tablet or browser.  The firm also opted for checkboxes for product selection vs. drag-and-drop functionality, although Day says the tool can be customized according to a dealer’s preferences.

“The focus in the design here is to hopefully make it to where it can be an interactive presentation and get the customer more involved,” Day notes. “And when doing that, doing it on the screen or on a touchscreen device.”

Day adds that StoneEagle was also careful not to throw its weight behind a particular process, pointing, for example, to the showroom meet-and-greet many F&I firms recommend. “There’s a varying degree of how those companies are doing that, but we’ve kind of built our menu around supporting any of those processes,” he says, noting that some of SEcureMenu’s pilot dealers are printing out a hardcopy of the menu to present to customers.

Even iTap dealers aren’t 100% on board with the showroom meet-and-greet between the customer and F&I manager. But McCool says even those dealers get a bump in profit because the iTap “is a little easier to use and it feels more customer friendly.”
“Some dealerships switch to iTap and they use it just like they are using their paper menu,” he says. “Totally unchanged, same word-tracks, same process, same products, same product pricing, same menu structure.”

Not a Crutch  
Kline admits the transition to the iTapMenu wasn’t smooth. “Getting a process implemented at a dealership is a process in itself,” she jokes.

This is why McCool wants to dispel the notion that using a mobile menu is a way to prop up a fledgling F&I manager. The mobile menu works best as part of a solid F&I process, he says.

“Some people have thought that the iPad menu space has somehow been designated for the inexperienced, not-that-successful finance manager,” McCool says. “It has really been kind of the opposite. I can count on one hand the times we’ve gotten a phone call from a store that says, ‘Hey, we have this new finance manager who is kind of struggling, so we thought we would try this.’”

Automotive Integration’s Meacham has a similar take. “The key [to making a mobile menu work] is figuring out how to put the iTap in front of every single person, every single time,” he says. “And that’s probably the toughest part about doing this in a store — using it with consistency. At the end of the day, it’s not magic.”