Lately, it seems en vogue to ignore and discredit any new and emerging idea or solution aimed at improving the F&I experience. Common phrases used by technology objectors include “It’s fixing a problem we don’t have” and “Anyone can skew data to support their case” or “Millennials will grow up like every other generation.”
I’m sure the same phrases and objections were uttered when menus were introduced as a replacement to step-selling more than 30 years ago. However, much of the opposition to today’s advancements seems to be based on a singular myth about technology: that only millennials want it. The truth is it’s not just millennials who are driving software companies and product providers to create these tools; it’s everyone.
Yes, millennials do have a reputation for being obsessed with mobile technology. However, data from the Pew Research Center shows that a majority (58%) of people in the 50 to 64 age bracket are also smartphone users. The data further revealed that more than two-thirds (68%) of all Americans owned a smartphone in 2015. In fact, mobile web browsing now outpaces desktop browsing.
Finally, according to the Pew Research Center, consumers who use smartphones to shop and buy are typically more educated and affluent than those who don’t. In dealerspeak, that translates to a more qualified buyer. The question is, how can the automotive retail world take advantage?
So why should we care that more people are using smartphones when the current business model is already profitable? Well, according to J.D. Power and Associates, the two main benefits of giving your F&I process a digital touch are improved customer satisfaction and an improved perception of the F&I office.
According to the firm’s 2015 U.S. Sales Satisfaction Index Study, dealers who embraced technology during their sales process realized a more than one-point increase in customer satisfaction on a 10-point scale. The firm also found that F&I products shown on a desktop display or tablet yielded the highest satisfaction ratings from consumers over any other methods.
When we argue that our model is already profitable and does not need to change, we are missing out on an opportunity to better communicate with our consumers in the way they are most comfortable. So let’s take a look at two areas technology can help in the F&I office:
1. Changing the F&I Narrative: Most studies point to consumers wanting to learn about F&I protections before they enter the dealership. So why not post product information on your own website? It doesn’t alter the F&I process. Customers are also accustomed to researching things like the average price paid for a vehicle, vehicle features, and cost-of-ownership information. But what do you think they find when they type “service contract” or “F&I products” into their Google search box? Nothing good, right?
See, our unwillingness to expose product information online is creating a rift between our finance offices and customers. The evidence is clear in CSI scores from across the country and across all brands. Besides, how can we expect customers to understand some of the most complex parts of the car-buying experience without allowing them to research any of it before coming into the dealership? And when they arrive, we expect a three- to five-minute menu presentation to be all they need to make a purchase decision.
According to MakeMyDeal’s 2015 Finance & Insurance Study, 63% of the 500 consumers the firm surveyed said they would be more likely to purchase our products if they could learn about them before reaching the F&I office. And 84% of them indicated they would rather learn about them at home. So let’s give them what they want by leveraging our websites and social media pages to post videos that educate them on the value of the products we offer.
Hey, if you believe like I do that our products offer true value to our customers, why shouldn’t we promote their features and benefits? Pricing may not make sense for most dealers due to the complexity of rate tables and other factors; however, basic information about our products in minute-long videos or digital brochures can go a long way toward making customers feel comfortable about the idea of protecting their purchase.
Posting product information online also balances what consumers find online. Because we’ve lived behind the curtain for so long, we’ve allowed people with only negative experiences to control the F&I narrative. So why not change that by bringing positive information about our products to the conversation?
2. Improving Engagement: Technology also has the ability to help solve an issue I saw pop up regularly at the more than 60 dealerships I worked with in 2016: customers becoming disengaged while waiting to get into the F&I office. In fact, I saw customers waiting anywhere from 20 minutes to two hours to get into F&I. And those customers too often waited the entire time without any interaction from dealership staff.
The answer is a digital interview process or virtual service walk. This can kill two birds with one stone by keeping customers engaged while feeding F&I managers valuable information they can use to deliver a more efficient and effective product presentation. You may even want to consider using video to outline your dealership’s charitable activities, promote the benefits of buying from your store, or give the dealer an opportunity to share his or her vision and message.
Notice I haven’t once suggested that technology can replace a trained F&I professional. That’s because it can’t. It’s a tool to help professional and ethical F&I managers reach peak performance. Tech providers who believe otherwise are on a fool’s errand. Besides, with the Consumer Financial Protection Bureau shining a brighter spotlight on our industry and the threat of stricter regulations being imposed, an F&I professional has never been more valuable.
The good news is you don’t have to go full digital to enjoy the benefits of today’s advancements. F&I data on dealer websites, tablet menus, and digital interview technology are all excellent tools to grow CSI and profit, but you don’t need each one. All you need to do is choose which technology best fits your process, vision, market and staff to enjoy improved customer engagement and profitability. And that’s what it’s all about, right?
Nick Sennett is president of The Janus Group, an income development company based in Albany, N.Y. Email him at [email protected]