What Happens When You Combine F&I and Desking?

Over the past few years, our industry has been dealing with slimmer front-end profit margins, shorter customer attention spans, and customers who are less tolerant of the time it takes to complete a transaction.

With all these issues in mind, our industry has set out in search of a 60-minute, turnkey transaction that will provide an opportunity to maximize each deal and perhaps recapture lost front-end profit opportunities. Basically, sales and F&I are being asked to make more money in half the time. Exactly how are we supposed to manage that?

Many dealers have adopted a blended F&I approach, which means the desk assumes some of the F&I responsibilities. The idea is that by bringing some of those duties to the front of a deal, they will reduce transaction times, allowing for a better customer experience while still retaining maximum profits.

So is that a good plan or only good enough? Sadly, in some cases, it is only good enough!

In some stores, the desk is established with seasoned F&I professionals that have a lot of experience with getting deals bought. In those instances, they complete the approval process and allow F&I an opportunity to consult and help the customer after the deal parameters are established. If this is the process at your store, then the rules have already been established, and it’s just a matter of everyone knowing those rules.

However, in other stores, it seems that the desk is hunting the red “X” rather than seeking the green checkmark. This is a symptom of the “shotgun” approach: Throw it against the wall and see if it sticks. Granted, everyone involved can agree and understand the need to try all avenues to get a deal approved. However, the shotgun approach is often unproductive and a little frustrating to the F&I professional. The issue is that shotgunning generally submits an unacceptable deal structure from the beginning. This creates a rehash situation when it could have been an approval at initial contact.

The good news is that with a little understanding, teamwork, and establishing some ground rules, this can all be avoided. Here are five proven strategies:

1. Get F&I Involved Early.

F&I professionals must be engaged and take part in deals early and often. Those who are proactive in their business will spend time at the desk when they have it available. In fact, some F&I professionals are stationed at the desk and only use the business office for contracting and whenever else privacy is required.

Taking this type of proactive approach eliminates issues before they begin, allows for proper deal structure before it is submitted, and shows the sales team a willingness to help and be a big part of their success. I would highly recommend early involvement — if and when time allows.

2. Establish the Rules of Initial Engagement.

How many different sources should the desk send the deal to before getting F&I involved? This answer may depend on who has the most experience with getting deals bought, whether the desk has any F&I background, or whether workload prohibits timely collaboration on deals. Finally, how will it affect the customer’s experience?

If the answers to these questions do not allow for flexibility when establishing a solid procedure, then here are three suggestions:

• How many sources do you use on a regular basis? For example, if you have five main sources, then maybe the desk would need to contact two sources before reaching out to F&I.

• Have the desk only submit to the captive initially and consult with F&I on the additional sources.

• The desk has autonomy to send to all sources, provided they follow agreed-upon parameters.

The correct approach will be the one that creates a great experience for the customer, is mutually agreed upon by the management team, and helps speed up the process while still allowing F&I the opportunity to do what they do best.

3. Structure Deals Effectively.

Whose responsibility is it to keep everyone up-to-date on current trends and deal structure? That would be the F&I professional. It is part of product knowledge. F&I professionals should keep the desk updated on the appetites of your various finance sources. This especially holds true if you have managers that have been newly promoted from the sales floor.

You should know which book values and bureau each bank or finance company uses. You should know the stips the require, their current advance, who offers the lowest fees for subprime buyers, the vehicles they are most likely to approve, and which ones are cosigner-friendly. Finally, you should know which sources are “hot.” After all, sometimes riding the hot hand can make the difference between an average or an exceptional month.

Much of this may seem obvious to an F&I pro, but for sales managers who have never had F&I experience or hasn’t worked in the box for some time, they may not know or have just forgotten some of the details.

4. Enhance Your Situational Awareness.

Situational awareness is the responsibility of the sales team. F&I professionals frequently find that, when receiving a deal, they have not been given any critical details or, worse yet, are given bad information before the customer arrives.

For example, the salesperson may indicate that the customer is closed and ready for delivery, only for the business manager to learn the customer is not ready to sign due to a missing spouse. The salesperson either did not know that or chose to ignore it. This lack of effective communication could lead to a bad customer experience and lost F&I opportunities.

The good news is that communication issues can be fixed in two easy steps.

• Establish the top five pieces of information you want the sales team to deliver to the F&I office on every deal and type those questions up. “What are they buying, why did they choose it, how’s their trade-in, did they give you two key fobs, and did they do anything to prepare the trade for the evaluation?”

• Teach the sales team the lost art of conversation with purpose. Have them practice gathering the needed information. Then focus on getting next-level information through follow-up questions. This will help guarantee the information you receive will be more accurate. As an added bonus, their sharpened skills will help in initial vehicle selection.

Make everyone aware of the information F&I needs and ask for it on a consistent basis. This will provide lost information that will make an extreme difference to our F&I success. Fluid communication between all departments is essential for a seamless customer experience.

5. Insist on Proper Endorsement and Process Assistance.

A little help from your friends can go a long way! No, that does not mean include all the products upfront. Payment packing is never a good idea. In fact, it ultimately limits a true F&I professional’s opportunity. However, understanding that everyone is involved in the F&I process can ensure the finance team has the best opportunity by guaranteeing the sales team makes a positive contribution to the end goal.

Here are some ways that the sales team can contribute to F&I’s success:

• Start the delivery process to familiarize the customer with the vehicle’s technology and equipment while they wait to get into F&I. Detailed information about vehicle systems can help encourage good decisions on how to protect it. This will also fill that dead time during the transition that often puts the customer on the defensive.

• Give the customer a dealership tour while they wait. This can either be in a virtual setting or by physically walking them around the dealership.

• Ensure the customer has a good understanding of the manufacturer’s limited warranty coverage prior to arriving in the business office.

• Ask the customer a few strategic questions while evaluating their trade-in and deliver the answers to F&I with the deal.

Using a blended F&I process in your dealership can result in a smooth and time-saving process — or it can result in a jumbled-up, customer-unfriendly experience. By following the simple steps above, you will reduce transaction times, increase back-end profitability, and improve your CSI scores.

Dwayne Wiggins is a trainer at American Financial & Automotive Services’ F&I University. Contact him at [email protected].