When Ron Marhofer Auto Family drove into 2021 after the pandemic first laid siege to the auto industry, its F&I sales sat at a solid $1,300 profit per car. But through focused training, better forecasting/action plans, and by involving F&I managers in strategy, this automotive dealership group pushed F&I sales to $1,800 per car.
“Our performance increased rapidly,” says James Berger, variable operations director for the auto group, as a semiconductor chip shortage and supply chain issues shackled the auto industry and sunk U.S. dealership inventory levels.
Their impressive performance during turbulent times netted the Ohio-based dealership group a 2021 F&I Pacesetters award. The honor, one of five awards given by F&I and Showroom magazine and sponsored by Spectrum Automotive Holdings, recognizes dealerships with highly profitable F&I departments that demonstrate a commitment to regulatory compliance.
President and COO Chris Marhofer ties 2021’s F&I results to changes made to the company’s F&I strategy earlier in the year. He explains expanding their partnership with EFG Companies helped them beef up training to optimize performance.
“We identified higher level performers [to provide additional training], so that they could grow their direct reports to achieve better performance overall,” Marhofer says. “This improved our talent pool and our results.”
Boosting Training Efforts
The company sent F&I managers to EFG’s F&I Development Training school in Texas to develop core fundamentals and processes they could pass on to newer staff. An EFG trainer also visits each store for group trainings.
The education, which Marhofer calls “stronger and more focused,” puts greater emphasis on 90-day action plans for individual employees versus blanket training. The 90-day plans let F&I personnel set achievable goals that focus on two or three action items. EFG and F&I managers guide employees toward their personal goals and track their progress.
“At the end of 90 days, it’s not a surprise what happened. They’ve been progressing toward that goal,” Berger says.
Group training also gets personal. Berger explains one store might zero in on Paint & Dent Repair sales while another may want to freshen their skills selling Tire & Wheel products.
Berger adds “EFG works with sales consultants, F&I managers, and sales teams to take a focused approach with the group instead of solely focusing on training for F&I managers to improve individual performance.”
Ron Marhofer Auto Family also increased its Walk Around Competitions at the store level and added an online training portal for sales consultants. These efforts ensure sales consultants understand the Ron Marhofer Auto Family sales and appraisal process.
The total package is one that ups the customer's experience with F&I. Marhofer explains, “Having sales managers actively working on strategy, not only with F&I managers but with sales consultants, helped us improve our expertise to build value for customers and improve our performance.”
Ron Marhofer Auto Family requires all finance managers to achieve AFIP certification. This accreditation from the Association of Finance and Insurance Professionals equips F&I managers with skills that help them be efficient and ethical.
Berger cites the finance manager and trainer position held by Rhonda Wiggins as pivotal in the automotive group’s ability to remain in compliance. “It’s vital to have a point person who focuses on compliance,” he says.
Wiggins attends orientation for every new hire and puts them through compliance training before they work in the store. “By the time they work, they understand compliance and the importance of safeguarding it,” Marhofer says.
Ron Marhofer Auto Family also partners with EFG to audit its compliance measures. The most recent examination found their processes solid and in compliance.
The auto group also invested in SmartEye F&I Witness service to make sure F&I managers follow proper disclosure and compliance steps with every transaction. Though many dealerships only record some transactions, Ron Marhofer Auto Family records all of them.
“We use it for training and to randomly audit stores,” Berger says. “EFG also randomly looks at transactions to make sure there is a video, proper paperwork, etc. These are extra layers of protection.”
He adds, “We are looking for 100% recording and everyone has adapted to the change. Most employees do not have a problem recording interviews because they always do business transparently.”
F&I managers also record interviews with home deliveries. Ron Marhofer Auto Family began home deliveries in 2018; well before COVID-19 became a concern in March 2020. The auto group uses the DARWIN Platform to present F&I products to customers. This system automates the interview and helps F&I managers personalize the sales process. The company also relies on DARWIN e-contracting and digital signing to complete the sale.
“The final process is as close to normal as possible in a digital setting,” says Berger. “We find it works well.”
Marhofer adds the shift to digital sales and home deliveries left the automotive group well prepared to manage the pandemic.
“There were a lot of dealers having to make new plans and adapt, but it was already part of our business,” he explains. “We saw the volume of home deliveries shoot up, but we were already doing home deliveries, so it was a pretty smooth transition.”
Ron Marhofer Auto Family comprises six Ohio dealerships in Canton, Stow, Akron, and Cuyahoga Falls, Ohio, representing Buick, Chevrolet, GMC, Nissan, Hyundai and Genesis. Each dealership strives to give back to the communities that support their business.
The company wrapped up its annual food drive in November. Its employees donated $20,000 in monetary donations and food, covering up to 11,000 meals. In December, it hosts an annual toy drive for less fortunate children. And each store holds Red Cross blood drives every quarter.
“We are a partner in the community,” says Marhofer. “I feel it’s our obligation to do our part to help those in need and we have the means to do it.”
The company also supports individual team members’ volunteer efforts. “Our team members are always engaged in the community,” Berger says. “A manager at our Nissan store recently worked to put a couple thousand wreaths and flowers at grave sites for local veterans.”
Commitment to Company Culture
Ron Marhofer Auto Family promises to abide by five core values in its mission statement. The company strives to create a world-class experience for guests and team members through:
- Respect for the individual,
- Commitment to continuous improvement, and
- Commitment to excellence.
“These are the priorities that we keep among all team members,” says Marhofer. “It’s part of our language and something we really focus on. We ingrain them in our teams and company culture.”
Marhofer and his father, Ron, present a Cultures & Values class to every new hire. “It’s very personal to us,” says Marhofer. “We want our culture to have a high level of caring.”
When team members care well for each other, it builds employee retention, adds Marhofer. Where turnover in the automotive industry averages 50%, Ron Marhofer Auto Family Auto Group’s turnover is just shy of 30%.
Ron Marhofer Auto Family also hires people who fit the culture. This begins in the interview process where Berger says he asks people about their childhood. “We cannot control how someone was raised,” he says. “When they talk about their family and things they really enjoy, you get a sense of their real personality. We can teach them what they need to know, but we cannot teach them to care for others. We are incredibly careful about who joins our team.”
Marhofer adds, “We try to bring in the right person, with the right cultural fit and right mindset. Then we put them in an environment with good leadership. We try to grow our dealership with a leadership development program. Then we provide training that allows every employee to progress.”
Happy employees provide a world-class experience for every customer. “We expect team leaders to perform at a level above the manufacturer's standard,” Marhofer says. “This is something we measure daily. We also watch our online reviews closely. We celebrate the good and address the subpar immediately.”
What Lies Ahead
The automotive group trains a close eye on industry trends and technology innovations designed to elevate dealerships to the next level. Home deliveries and online sales are the auto group’s current emphasis.
“We are figuring out how to get full online delivery, where the customer can do everything online without needing to sign physical paperwork,” Berger says. “We can do most of it over the phone or computer. But we are not at 100%, yet.”
Marhofer adds, “The competition is constantly changing. Most companies benchmark themselves against traditional competitors. We’re constantly looking at the competition, and saying, ‘Maybe our competition isn’t brick-and-mortar stores anymore.’ Maybe it’s Carvana. How do we deconstruct what they are doing? Our goal is to compress transaction times and create a frictionless sales environment for a world-class guest experience.”