History tells us that Benjamin Franklin wasn’t referring to F&I when he said: “An ounce of prevention is worth a pound of cure.” He was advocating the creation of the first fire department in Philadelphia. But it’s amazing how much his words connect to what happens in the F&I office.
From OFAC screenings to rehashing deals, the daily path of an F&I manager is a complex maze. No matter how good we get at our job, unexpected problems are bound to pop up. Much like an Olympic hurdler, we have to learn the pace and quickly adapt. But unlike the runner who knows the exact distance between himself and the next obstacle, our hurdles are constantly moving. That means we must have our guard up at all times, and we must have a process in place that accounts for the unexpected.
And that’s why constant training and learning are so important to the F&I trade. It can’t be emphasized enough. However, there are things that happen in the F&I office that a training manual can’t teach you. So, here are some areas and common missteps you need to watch for. Hopefully this little primer will help you shore up your F&I processes.
Compliance: Yeah, I know, it’s an overused buzzword, and most of us would just as soon not talk about it. But adherence to federal and state laws is part of what we do. And as we all know, one missed step can come back to haunt us. So, to prevent those easy misses, here is a quick list of items that typically fall through the cracks:
• Failing to perform an identity check on old customers or family members.
• Re-contracting customers with the original sales date when an error must be corrected.
• Failing to provide customers with adverse action, privacy and risk-based pricing notices.
• Doing a poor job of disclosing the retail installment sales contract.
Product Sales: It’s easy to get hung up on just one product and get out of the habit of offering everything the customer qualifies for, especially when we get a “Line 5” call from the lender. But even in that instance, you might be surprised how often customers are willing to pay cash for something the lender won’t approve. The question is: Are you just a paper processor or are you offering customers cash products as well? Here are four characteristics of the former:
1. Not understanding customer body language or voice inflection.
2. Stopping after the first or second “No.”
3. Being unfamiliar with the product.
4. Ignoring one of the buyers during the presentation or close.
Process: There are a lot of things we do behind the scenes on every deal that can be potentially profitable when done right or frustrating when done wrong. So, do these sound familiar?
• Overlooking a deal “stip” on the callback.
• Being too hasty when “spotting” a customer.
• Having to resign a customer at a higher rate. This is never fun and you run the risk of “yo-yo” financing.
• Taking the lender’s first callback and failing to rehash a borderline deal.
• Ignoring valuable info the salesperson has collected or that the customer is offering.
We’re often guilty of not learning from our mistakes. Life is a tough teacher, and the consequences of bad habits or rushing the process can create more work and gobble up precious time. I often tell our staff, “If you keep on doing things the way you’ve been doing them, you’re going to keep on getting the same results.” It’s insanity to expect your department to improve if you’re not analyzing what’s happening and making changes as a result.
How can you know what to improve upon if you don’t know where the deficiencies lie? Is it in your presentation, your body language or your voice inflection? Does your office look sloppy, unorganized and unkempt? Do you appear to be unprepared when the customer arrives, or are you stumbling for the right things to say? Are you still using canned word-tracks after five years in the business? Would your presentation keep you interested if you were on the other side of the desk? How about personal grooming? I’m talking about fingernails, wardrobe and hair. What about your overall attitude? Are you mentally and emotionally at your best when the customer enters your office?
I know I’m guilty of fighting change sometimes, but I eventually get there. For instance, I never believed in meeting and greeting customers in the showroom. But I’m doing it now, and I like the results. So, be part of the solution, not the root of the problem. Good luck and good selling!
Marv Eleazer is a finance manager at Langdale Ford in Valdosta, Ga. E-mail him at [email protected]