The powersports industry, like most retail markets lately, has gone through some challenging times. Some observers look at this environment negatively, and others see this as an opportunity to change by applying some entrepreneurial spirit and creativity.

If you evaluate powersports revenue sources for 2007, one area stands out as being the department that can change the bottom line income of the typical powersports dealership — the F&I department. In 2007, a powersport dealership’s F&I income accounted for between 1 and 3 percent of total sales, according to Powersports Business’ “Market Data Book 2007.” The percentage of sales varied depending on the size of the dealership. Smaller stores put less emphasis on F&I income, while the mega stores put more emphasis on F&I. This gave mega stores 3 percent of income toward total sales.


I think it is safe to say the F&I department is one area that offers tremendous profit potential for powersports dealers, regardless of the size of the dealership. There is no department that can add as much to the bottom line of an income statement than F&I. It doesn’t require the capital investment other departments require to increase exponentially. All it takes is doing things right.

In the spirit of 8-8-08 that the Beijing Olympics brought us, I give you the eight factors that will maximize sales in the F&I department without using a large capital investment. And yes, these factors apply to every dealership, whether small, medium, or mega.

1. Get the right commitment from the dealer

Understanding that F&I can be a profit center starts with the dealer. That means the dealer must make it very clear to employees that the products offered in the F&I department bring a tremendous benefit to their customers, and that not giving customers an opportunity to have those benefits is a disservice to them. If the dealer isn’t committed to maximizing F&I income, then it’s simply not going to happen.

2. Use the right F&I selling system

Whether or not you use a menu, a planned presentation is the selling system that works best. I understand you can’t use a planned presentation for all customers, but they generally fall into one of five buying personality types. There are people who never buy, people who buy everything, people who evaluate their decision, people who buy because of how the product will affect others in their life, and people who want you to just get to the point of your presentation.

People may have different needs, but that doesn’t mean you don’t use the same presentation. The only difference is how you respond to objections and transition back to your presentation. You need to learn how to handle or deflect the objection so you can get back to closing the deal.

I recommend an electronic F&I menu because six years ago I realized that menu selling was the best way to get customers to make a decision. I prefer an electronic version because of the flexibility it provides, as it allows the F&I manager to give a professional presentation, achieve compliance, change options on the fly, and give the customer a natural alternative close, “Would you like option A, B, C, or D?”


3. Hire the right person and provide them with the right play plan

A good finance manager sees the vision of the dealer and then makes it happen. He or she should put customer satisfaction first and be committed to meeting every customer at the point of sale. The manager should present each product with enthusiasm, and should make sure the customer is taken care of promptly and efficiently.

The manager also needs to use the right F&I pay plan to emphasize product sales. The biggest emphasis is placed on the products the dealer wants sold first. These are the products that appear in the most prominent place on the menu and are shown the most frequently.

4. Sell the right F&I products

To maximize F&I income you first need to have enough products to offer your customers. A good start is to have a vehicle service contract, GAP, theft deterrent, tire and wheel, and credit insurance. Having one or two F&I products available limits your customers’ options and your potential income. Having too many products can overwhelm customers. The question is how many is too many, and at what point does adding more products become counter-productive?

If you asked representatives selling the products to the dealership what they think is a good product count, most will say more products means more income. Some dealers might say the same thing. However, your F&I manager would most likely tell you more products doesn’t necessarily equal more income.

Within the 20 to 25 minutes we have to sign the customer up, 10 minutes of that time is spent building rapport. That doesn’t leave a lot of time for product presentations, especially if you consider the paperwork that needs to be completed. So what’s the ideal number of products to present? I would say a minimum of five, but no more than seven. Any more products than that and there’s no way you can give adequate attention to each product. You also risk having the customer check out from your presentation with too many products.

5. Set the deal up right

Setting up the deal right starts with desking the deal. This prevents the customer from having unrealistic expectations of what it costs to buy the powersports vehicle. The best way to do this is by using an average interest rate for all customers.

When a rate is quoted, the salesperson needs to explain to the customer that the rate is used for initially quoted payments. So a customer’s final payment will depend on his or her credit information and the bank’s approval. The finance manager will be able to determine the exact payment the customer qualifies for once he or she agrees to purchase the vehicle and has the bank’s approval.

It’s also important customers are turned over at the point of sale, whether at the dealership, outside the dealership, or on the telephone. To ensure that happens, the finance manager needs to be available to greet customers in person or on the telephone. If you’re not willing to take turnovers on the phone you have created two problems. First, you’re missing out on sales that are closed on the phone. Second, you have just given the salesperson an excuse not to turn the customer over to F&I.



6. Find the right training program

An aggressive training program is an essential part of a high performing F&I department. The training should be a combination of classroom, online, reading, or on-the-job education. Each type has a unique function and will compliment each other. Classroom training is a great way to motivate or recharge the batteries. But a person will only retain about 20 percent of what they learn in a classroom environment, so online training or reading can consistently keep what’s learned fresh. And there’s nothing better than seeing someone else show you how to do the job effectively while you’re on the job.

7. Evaluate performance the right way

The right pay plan should be complimented with goal setting and performance evaluation. The goals should be daily, weekly, monthly, quarterly, and yearly. Each product category should be assigned a penetration rate, as well as a dollars-per-finance-deal average and dollars-per-retail-deal average. The actual goal vs. forecast should be monitored daily. If you have multiple finance managers, you can compare their performances and rank their results. The best way to evaluate performance is by using an electronic report that maintains daily statistics. Don’t wait until the end of the month to find out the dealership’s monthly goals aren’t going to be met.

8. Use sales meetings the right way

A dealership’s daily or weekly sales meeting is one of the best opportunities you have to inspire your staff. I often hear salespeople say meetings are just a reason to come in early and are a waste of time. Problem is, most sales meetings are a waste of time.

Why do we need to get together just to tell the sales manager how many sales we have and what customers we are currently working with? A sales manager should already have that information. An effective daily or weekly sales meeting should involve the entire sales department. It should also involve the business manager. Everyone should participate in a conversation centered on improving processes to sell and service customers. Each meeting should allow success and failure stories to be shared, whether it has to do with a sales technique, product knowledge, promotions, or to provide recognition when deserved.

Ron Martin is the president of Vision Menu Inc. and The Vision of F&I Inc. He can be reached at [email protected].

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