Selling F&I the Right Way

If you want to be in the powersports business tomorrow, you must evaluate your F&I performance today. Reviewing your department isn’t just about the profits it generates. You need to know where those profits are coming from, how that profit is being made, which products are being offered, which products are not being offered, and, more importantly, how are those products really being sold?

As a successful powersports dealer, you already know F&I income is critical to your bottom line. Unfortunately, we can’t sell F&I products the way we did in the past. A salesperson or F&I manager can’t whip out a service contract brochure and launch into a sales pitch if the customer has no interest in the product. Quoting a monthly payment that includes F&I products a customer doesn’t know about or hasn’t agreed to purchase is simply not an option anymore. Remember, packing payments is a deceptive trade practice.

Let’s face it, if a customer has purchased a big screen TV, appliance, or computer in the last 10 years, someone has tried to sell him or her an extended warranty. If they’ve bought a car in the last 25 years, they’ve been through an F&I office. So they fully expect someone at your dealership to try and sell them loan insurance or a service contract on their new motorcycle. Those who had a bad experience with their last dealership may even expect products to be packed into their payment.

There are far too many powersports dealers who still have no idea how F&I products are really being sold at their dealerships. They don’t know what customers are being told to convince them to buy F&I products. They don’t have a process in place to ensure that every product is offered to every customer every time.

Is it possible to increase F&I income and improve the customer experience while protecting your dealership from potential liability and future litigation? The answer is yes. However, it will require you to make some changes in the F&I process at your dealership. It will also require your salesperson or F&I manager to possess the consultative selling skills required to handle today’s increasingly informed consumer.

Today’s consumer will not buy something they don’t want and don’t think they need. Increasing F&I income at your dealership depends upon your salesperson and F&I manager’s ability to find and fill customer needs. Remember, this is not about selling. The F&I process is about helping customers and adding value to their purchase experience.

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Menu Adoption: the First Step

How can you increase F&I income, increase customer satisfaction, ensure compliance with applicable laws and regulations, and protect your dealership from potential liability and future litigation? Easy. By using a menu to present F&I products. Requiring the use of a menu (also known as a financial services overview) to sell F&I products helps ensure every customer is offered every product every time.

If your dealership is not using a menu to present F&I products, I guarantee it’s costing you thousands of dollars a month in lost profits. There are customers who will buy every F&I product, but they won’t buy them if they’re not given the opportunity. Whether your salesperson or F&I manager sells F&I products, they have a responsibility to the customer to review all of his or her repayment, risk management and equity protection options.

A menu doesn’t sell anything. It’s just a piece of paper that displays all of the customer’s options. It also allows your salesperson or F&I manager to provide valid reasons why each product is important to him or her. The use of a menu can dramatically reduce the amount of time your customer spends discussing F&I products. A menu allows the customer to select the products he or she wants, and ask questions or voice concerns about the ones he or she doesn’t want. This allows the salesperson or F&I manager to focus on why certain products are important to the customer.

A menu works because the customer is expecting to hear another sales pitch. Rather than selling, a menu allows your salesperson or F&I manager to simply review the customer’s options, allowing him or her to make a decision based on their situation. Remember, every product presentation and recommendation is based on the needs of your customers. When customers feel we’re trying to help them, they will buy more products than we can possibly sell. What’s the trick? There is no trick. The way to sell more products is to stop selling customers and start helping customers.

5 Keys to Menu Selling

Our experience has shown there are five keys to using a menu. First, your salesperson or F&I manager has to discover why a customer needs a product before attempting to sell it. The essence of F&I is matching the unique needs of each customer to a specific benefit of the product being discussed. If the customer doesn’t want the product and you can’t explain why he or she needs it, how can you expect to sell the product. Your salesperson or F&I manager must be trained on how to find a customer’s needs through a credit application, credit bureau report, buyer’s order, and open-ended questions. This allows the F&I manager to give every customer at least two or three specific products that apply to his or her circumstances.

The second way to use a menu is to use it with every customer, so he or she is aware of all the products available in connection with the purchase. The use of a menu provides you with proof that all F&I products were offered and explained to the customer. It also discourages your salesperson or F&I manager from only presenting products they believe make the most money.

The third key to using a menu is to simply present the products to customers without pushing the hard sell. When the customer doesn’t get the expected sales pitch, he or she will start asking questions and volunteer reasons about why he or she doesn’t need a particular product. This opens up dialogue about the product and allows your salesperson or F&I manager to focus on what is important to the customer. Since the salesperson is simply reviewing and explaining the options, he or she doesn’t come across as selling. Instead, the salesperson is trying to help the customer make the right decision based upon his or her needs.

The fourth key is to give the customer ownership of his or her options. Instead of pitching products the dealership offers or recommends, the salesperson or F&I manager must pitch products as if they are his or hers to offer. Remember, it’s the F&I manager’s job to review the customer’s options and answer any questions the customer may have, so why not take ownership of the products being offered.

The fifth key to using a menu is that your salesperson or F&I manager must always sell his or her products by concentrating on what is truly best for the customer. Customers want to do business with someone who listens to them, who understands their needs, and who cares enough to help them identify solutions to those needs. They do not want to do business with someone who is more interested in selling rather them than helping them.

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Time-Saving Protection

As a powersports dealer, what does the use of a menu in the F&I office mean to you? First, the use of a menu in the F&I office will help ensure compliance with applicable laws and regulations. It also protects your dealership from potential liability and future litigation. Every customer is entitled to know all of the options available to them in connection with their purchase. A menu provides proof that all F&I products were offered, the coverage explained, and the customer selected items he or she wanted.

A menu also provides documentation that the customer requested the F&I products and understood the products would be included in the payment.

The use of a menu also greatly reduces the amount of time customers spend in the F&I sales process. Rather than selling one product at a time, customers can select an option package. Most customers are already familiar with many of the F&I products available. They don’t need every detail of the coverage explained; they need someone to help them see why the protection is so important.

A menu doesn’t just increase income, it increases income across all products. It also helps reduce chargebacks, which occur when customers don’t know what they’ve purchased or don’t want what they were sold.

A menu also ensures full disclosure. It is critical that customers know what they’re buying, and want what they’ve been sold. Using a menu and having customers sign it ensures there are no surprises when they sign the installment loan agreement.

Customer satisfaction is another benefit of using a menu, as it allows your salesperson or F&I manager to review all of the customer’s options in a minimum amount of time. A menu also takes the pressure out of the process. This is what customers want and what they deserve. Reviewing a customer’s options will ensure the F&I process really adds value to his or her purchase experience.

Every business succeeds by helping people. The key to maximizing F&I income is an unwavering commitment to help as many people as possible. To increase your F&I income, customer satisfaction and protect your dealership, you must focus on improving your dealership’s ability to help customers by having a process that makes sure that happens. The best way to do that is through the use of a menu to sell F&I products.

Ron Reahard is president of Reahard & Associates Inc., an F&I training company providing F&I certification classes, ongoing in-dealership and online F&I training. He can be reached at [email protected].