When we consider how to have unequivocal success with F&I, it all starts with absolute dealer support. In other words, the dealer must want the income that a strong F&I department can generate. It’s incumbent on dealers, as business owners, to create a climate where their finance department can flourish. Enforcement of the ‘Sales to F&I’ process is critical. Ensuring that each customer is afforded the opportunity to learn about value added products designed to enhance the ownership experience for the consumer, is indispensable. If dealerships that don’t have strong owner support, there could be a breakdown between sales and F&I departments and low finance department revenue.
Goals need to be established and set for the F&I department right up front. Support services need clear direction on what a dealerships ambitions are and where you need to be. Use a top-down approach, everyone’s buy in to the direction needed to move forward with. When a dealer stands behind policies and established parameters, everyone can understand what is expected of them.
Choosing or having the right person(s) in the F&I office is imperative. An ideal candidate is a process driven individual that understands how vital good relationships are with the sales staff and has the fortitude to continually coach and strive for perfection. The right person believes that their products offer a true value proposition to the customer, and can persist thru several objections, because they know it’s the right product for the customer. The right person is critical for success.
You need process. People are not able to function well in an environment without processes and procedures. The sink or swim approach doesn’t work anymore. Look for individuals who want to succeed, have the drive and determination, and then provide them with the right onboarding. Review and update your policies and procedures and make them readily available. Sometimes it’s necessary to re-evaluate employees and shift roles. It’s important to monitor existing and new employees to make certain the right people are in the right jobs.
The current labor shortage is compounding high turnover rates. Some candidates may be unwilling to meet the expectations and demands of certain dealerships. F&I personnel work long hours, long days, weekends, and if they see an opportunity with a better work life balance they may leave. A good fix is to create a culture within your dealership with clear processes, commonality of goals, and a great onboarding experience where new employees understand the position and what is required of them. For employees, being able to meet priorities provides a sense of accomplishment and control.
A Good Pay Plan Matters
Since your pay plan is generally your job description in the Finance office, it makes sense to tailor the pay plan to desired outcomes. Too often, pay plans are complicated and challenging to understand. An F&I professional should be able to take one look at their pay plan and understand the desired outcome. Penetration based pay plans can come down to one deal that can make or break a paycheck. It can lead to resentment and fear of certain types of deals. Straight percentages on overall gross can lead the F&I Manager to relying on reserve income instead of product sales. In our experience, the production-based pay plan is best, i.e. 10% of net reserve income and 20% of net product income. Every deal becomes an opportunity, and it doesn’t take long for the F&I Manager to notice that most of their income comes from product sales, benefitting the customer. Employees need to know at any given time during the month exactly where they are at.
Anytime a pay plan becomes too complicated for an employee to understand it’s not a good pay plan.
Overly complicated pay plans can make employees leave.
Provide Proper Training
Learning is a lifelong endeavor. The F&I Professional must understand that proper training is an investment in their careers and fortunes. A strong mix of in-house role playing with qualified F&I training specialists, web training, as well as attending training events and seminars is essential to the long-term success of any F&I professional.
Without training an F&I Manager’s presentation can become stagnant and often predictable to the consumer. Learning the latest sales techniques will benefit everyone. Employees need to be encouraged to attend training, even making it mandatory for them to do so. Some are reluctant to leave the dealership (for example) for three days, but those three days spent in training is an investment on the other 362 days in the year.
Training should be peer driven, peer focused, where dialog is open and valid. When individuals are aiming to advance their careers to higher levels there are GUILD programs available to them. Recognition of employees goes a long way, and those certifications and plaques mean a lot.
Having Systems and Controls
You can’t manage, what you can’t measure. Never truer words spoken. Every great F&I manager knows exactly where they are after every deal submitted. Keeping track of their progress digitally in real time is preferred, and every modern menu program can track that progress. Finding out that we are struggling on the fifth day of the month instead of the last day of the month makes it much easier to make the necessary adjustments to get back on the right path. Comparing one month and one year to the next gives clear proof as to our progress as an individual on a successful team.
Collaboration with your agent partners is critical in developing your successful, customer centric, sales through F&I experience. Utilize your agency partnership to its fullest potential. Agents worry about dealership numbers as much or even more than dealers. It’s the agent’s job to review historical numbers and check the current numbers. Have them meet regularly with your F&I department and then recap those visits with management. A value add that an independent agent can bring to the table are recommendations to drive more success. Knowing that your agent is collecting numbers will certainly inspire your F&I managers to do well. Let your agent partners help you in achieving your goals.
Rob Miller and Chris Hochstein are co-owners of the Cyclone Agency, a Vanguard Dealer Services Company.