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F&I Training Basics for New Agents

F&I Training Basics for New Agents

So you’ve started a new agency. Congratulations! Now, as a trainer, I have to ask: What does your F&I development program look like? If your answer is “I don’t have one,” well, don’t worry. I’ve met agents who have been in business for years and still don’t have the basics covered. And that’s a shame, because the best way to solidify your value to dealership performance is to show an increase in production.

The training curriculum should support your dealers’ overall objectives, reinforce the procedures each dealer plans to use to accomplish those objectives, and provide your dealers with the most up-to-date methods, skills and knowledge necessary to flourish. Recognizing training opportunities along with specific subject matter to train on is an important element in reaching new heights for your agency and your clients.

At some point you will have to decide whether you’re going to train your dealers’ F&I managers yourself, hire an outside trainer, or partner with a training provider. No matter which path you choose or how big your agency grows, the foundation of F&I training remains: You have to put your F&I managers in a position to deliver an effective presentation to every customer.

To do that, you have to teach them how to deliver the car, maintain high levels of customer satisfaction, minimize the number of contracts in transit (CIT), remain legally and ethically compliant, and maximize product sales. Let’s take a closer look at each component and how they combine to create an effective F&I training program.

  1. Deliver the Car

The No. 1 priority for every F&I manager should be to deliver the car in an upfront, honest and ethical manner — as well as by the most practical means. It takes more than just being able to pitch products and hand-pick the best call off the finance portal.

The keyword here is “transparency.” You can’t fake transparency. You can try, but people shut down when they feel they’re being taken. You have to present every product and service with no smoke and mirrors. I often tell my trainees they have to build a bridge from sales to F&I. “You’re here, you bought the car, now let me give you the blueprint for taking delivery.”

Without that bridge, there is no sense of urgency and no foundation for trust, and trust is what we’re selling in the finance office. Our products are intangible. They are highly valuable, but the customer derives no instant gratification from buying them. That’s why it’s so important to build and maintain a process that gives the F&I manager an opportunity to deliver on ever deal. There should be no whining about cash deals and lease deals. The F&I manager’s mindset is “I’m here to deliver the car.”

  1. CSI and ESI

Maintaining a high customer satisfaction index (CSI) and employee satisfaction index (ESI) is one of the most challenging tasks for F&I managers. They are expected to deliver a world-class customer experience while navigating the dealership culture and communicating with the sales staff.

As an agent, the best advice you can give to an F&I team is to set customer expectations on the showroom floor. If you asked 100 F&I professionals whether they would have better results if they could set expectations for F&I while the customer is still on the show floor, not one would say “No.” They know customers like it when they’re asked questions about their needs — particularly after they just spend $45,000 on a new car. But when the sales guy tells the customer it’s only going to take another 10 minutes, can you blame them for losing patience after 20?

Teach your F&I managers to be good communicators. I’m not talking about building rapport and making every customer smile and laugh. I’m talking about setting realistic expectations — including an accurate timeline — and then do it, period.

The first thing that happens is CSI goes through the roof. The second thing that happens is the sales department is influenced to set reasonable expectations themselves.

  1. Contracts in Transit

CIT are often silent but always lethal. They weigh on the F&I manager’s mind and have a huge influence on their production. Between all the minutiae they know they have to fix and all the pressure coming from the GM and the accounting office, some F&I managers would rather get a deal funded than take the next turn. You might as well put coffins in their offices, because they are constantly in panic mode.

Your agency’s training program should include a module on CIT and how to prevent them. As with CSI and ESI, it all comes down to setting expectations. Use your time with the customer effectively, making sure all their information is correct before it’s printed on any form and you are going through all the proper disclosures. Get all the signatures the first time. “This is your payment and term, this is the vehicle service contract you agreed to buy, this is the 1-800 number, sign here, here and here.” Use a checklist. It helps!

When you can control your CIT, there is a powerful residual effect. The F&I manager is making money and focused on the next customer, not chasing numbers and signatures all day long.

  1. Ethics and Compliance

When it comes to ethics and compliance at the dealership, ignorance is no excuse. Each of your stores has to have a culture of transparency, and depending on the dealer, you may have to take the lead on that initiative. Are you going to manage the business or will the business manage you? You need to know what’s right and what’s wrong so you can protect the dealer’s assets.

Industry knowledge is critical. It amazes me that, to this day, some F&I managers don’t know what the Consumer Financial Protection Bureau is or even what “FTC” stands for. They don’t know because they don’t seek that knowledge.

It’s your job as an agent to bring it to them. Subscribe to the industry journals and keep yourself informed. Remember, there is a target painted on every rooftop. Government agencies, state attorneys general and private attorneys are fielding complaints and taking action. Ignorance is no excuse.

  1. Additional Profit

Whether in paper or electronic form, F&I menu/option disclosure procedures and processes should be outlined in a manner that promotes its full profit and compliance potential without sacrificing CSI or the F&I manager’s ability to deliver the car.

You have got to maintain a process that promotes maximum product sales. It should be consumer-friendly. It should not be designed to “wear the customer down” — in fact, it should have the opposite effect. It should get the customer involved. It should be so transparent that the customer feels completely engaged.

All we’re asking of the customer is that they make a smart decision. Give them the opportunity and do so consistently. That’s how you sell F&I products.

Are you capable of providing your client the resources necessary to achieve optimum success? Constant training is one of the most valuable resources you can provide. If you can’t do it on your own, invest in outside training. Every dime you spend will come back twofold. Every minute you spend with an F&I team improves their production.

So once again, congratulations on your new agency. It’s a great time to be in our business. Now let’s get to work.

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Don’t Get Bitter, Get Better

Don’t Get Bitter, Get Better

The meetings all went well, the dealer and GM were present, all the sales and F&I managers seemed to agree with the plan and the coffee and doughnuts were fresh. What more can you ask for? Now it’s off to the races! … Or is it? Everyone agreed with the plan, but are they actually committed it?

In the agency space, when it comes to implementing change, there is a big difference between agreement and commitment. Whether it’s the rollout of a new account or the installation of a new product, the process for account development can take a sharp turn if the dealership’s staff is not fully committed.

Getting to know the difference between a commitment and an agreement before you trust the rollout or installation went as planned is vital to the overall success and development of the account. It’s also the only way to ensure all those meetings make you, the dealer and their team better, not bitter.

Fear of Commitment

Typically, all you have accomplished when the dealership’s staff displays a lack of engagement during meetings is an agreement. It’s the meeting in which the dealership’s staff engages in meaningful discussions, dialogue and debate that a true commitment is formed. Agreement happens when people sit in meetings, nod their heads and then, afterward, either fail to take action or deliver on time.

Commitment, on the other hand, occurs when people take responsibility and then follow through to completion. Agreement results in head nods. Commitment results in action. There is something about progress and improvement that gets a dealer’s attention. No progress or improvement and you may find yourself swimming with the sharks. No amount of coffee and doughnuts will save you.

One of the greatest obstacles impeding your ability to development and progress with a dealership is its staff’s commitment to make the shift. Just because they say they’ll do it doesn’t mean they will. How many times have you found yourself shaking your head in wonderment after learning that the F&I and sales management staff had not begun executing a specific procedure, policy or process that they all agreed would make a positive impact? Does your stomach turn while listening to the list of excuses they provide for not following through with the plan? Do you find yourself disappointed and discouraged with their lack of motivation and discipline? Do you find yourself on the edge of that slippery slope known as mediocrity?

Don’t give in to their shortcomings. Don’t allow the dealership’s staff to control your destiny. Sometimes you will work your tail off, do all you can do, and still not get the results you want. Sometimes there will be obstacles that get in the way of your progress and you will feel defeated. Sometimes you will simply give in to all the mediocrity that surrounds you. That’s life! When things simply don’t go as planned you have two options: get better or get bitter.

Personal Standards

When you feel you gave it your all or put in a great effort and fell short of the objective, the important thing when evaluating the outcome is your viewpoint. It’s your viewpoint that matters the most when assessing the damage. Every now and then, you need to take a good look in the mirror and ask yourself, what is the real reason? Did you truly give it your all and what can you do to make the outcome better the next time you’re faced with a similar situation?

Reevaluate your drive and your knowledge. Be truthful with yourself. Once you evaluate the facts and assess whether or not you truly gave it your best, you can take comfort in the fact that you left it all on the line. Only then can you step back and realize you have bettered yourself by pouring your all into it. If your best effort wasn’t enough this time, you are better prepared to accomplish it next time.

Becoming the best agent you can be requires holding yourself to a high standard. If you fell short of your objectives because you failed to give your all during your preparation, that will become immediately apparent to you. Life is full of probabilities. If you can learn from your shortcomings, you will be better prepared to take on a new challenge in a meaningful way. Sometimes falling short and realizing that you did not provide the effort needed and working harder with your next chance can make you stronger in the long run.

The choice is always yours. When faced with defeat, you can get better by focusing on correcting past mistakes, providing necessary effort and working your tail off to ensure that you will be ready next time. Or you can get bitter by allowing yourself to slip into sulking self-doubt, failing to correct your mindset and ensuring you will be unsuccessful going forward. Get better at controlling your destiny. If you don’t, someone else will.

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Raiders of the Lost Profit

Raiders of the Lost Profit

There are a few ways dealerships lose profit, which they can fix right now. Here’s a look at some of the biggest offenders.

Monday Mornings
It’s the same every week: Monday morning you walk into the office, get your coffee and look at the stack of deals that are piled up on your desk from the weekend. By the end of the day on Saturday and Sunday, everyone just wanted to hurry up and get out of there, so this is how you start every week. The last thing you want to see on a Monday is a customer in the showroom when you have paperwork piled high from the weekend. Thank goodness there are only four Mondays in a month! You have to be more administratively sound so you can handle those deals quicker on Monday mornings, because you have a Monday every week. If we don’t deal with things quickly and efficiently on Mondays, then it can have a trickle-down effect into the rest of the week and can be a big way to lose profit.

Next we have CITs or Contracts in Transit – in other words, the money is not in the bank yet. And again Monday is just the start of it. CITs are like bananas: they start out nice and ripe, but then they just get riper, and then next thing you know you have to throw them away. It’s the same with CITs – the longer they sit on your desk before they get to the bank, the more the dealership is losing. That’s why at UDS, when we refer to a CIT, we call it a “Cash It Today.” If you can change your thinking on this, and get CITs cashed the same day, that will be one more way you won’t be losing profit.

There are several ways you can cash a contract today: self fund, eContracting, fax funding or overnight enveloping. If you want to get a deal cashed right away, utilize the most up to date processes, and use the checklists in deals. There are always checklists, but no one ever seems to utilize them – they just throw the list in there. That’s like flying without gas in the plane.

In F&I, you should be ironing out the most difficult challenges first. It’s human nature to have a tendency to save the worst for last, but that’s a terrible strategy in F&I because as those deals are waiting, the difficulties are getting worse. You have to go over the worst first, and only once they are handled can you move on to the easy ones. It’s the exact opposite of the way you did things in college when you would do the all the easy problems first on a test and then go back and save the hard ones for last.

Heat sheet meetings are important to ensure everyone is working for the same, common goal: to get the deal funded. This way, everything is not just riding on your shoulders; everyone has the same goal in mind. Depending on the size of the dealership, you should have meetings every day or every other day.

Internet, Credit Unions, Cash and Lease Deals
F&I managers have a tendency to work the deal if the customer is at the dealership, but if the customer is away from the dealership, an Internet or phone deal for example, the F&I manager will tend to take that deal and throw it on their credenza until the customer comes in. Unfortunately, what usually happens next is that when the customer does come in, they come in with pre-approved credit, a check or they may have already done their financing, leaving the F&I manager pretty much locked down. You have to be proactive, not just be reactive. You have to be out in the trenches, every day before you go to work, talking with management teams and sales consultants to find out what’s going on.

F&I has not really embraced the Internet shopper yet. Statistics have proven that in the last couple of years, 80-85% of customers are coming to us from the Internet. As a result, we’ve got to change our mindset. The Internet customer is probably more important to you than the ones on the floor. In fact the Internet customer has expressed an intention to come to you to buy that car, and the problem is we’re not ready to sell it to them. Instead we take them through this whole process and it just bogs them down. We are not Internet-savvy enough in F&I; we have to embrace those transactions. The biggest problem is that we don’t have a process for Internet customers – no one calls them and everyone waits for them to come into the dealership. That’s going to cost you tons of money. Get smart and use the phone, and be ready when they arrive; that’s what they want. Make it a big event when they arrive. You will sell more cars and make more money. It’s the same with credit union, cash and lease deals – we need to embrace those deals too.

We often ask the customers, “What’s the rate?” when we find out they are going to a credit union. Stop asking that question, and instead ask why they are going to the credit union in the first place. If they say it’s because that’s where they do all their business and they are loyal to them, then you’re not going to beat that, but if they say it’s because they are getting a great rate, then you’ve got something to work with. If you just ask them what the rate is, they aren’t going to tell you the truth; they are likely going to tell you they are getting a much lower rate than they actually are getting from the credit union.
Learn to embrace credit union, lease and cash deals the same as you would finance deals; they come with the territory. Remember, everyone faces the same perils of the road whether they are a lease, cash or finance deal. Slow down the deal and allow the process to drive your profits.

Attitude: YOU are the greatest challenge
Your attitude can make money or can displace money. If you have a really good attitude about every deal, then you’re going to make money. If you think you can, you probably will; if you think you can’t, you probably won’t. It’s all about attitude. Look in the mirror and ask yourself, “Am I part of the pitfalls of F&I? Am I a DO-er or a do NOT-er?”

Our attitude is usually dictated by the kind of deal we get in F&I. You have to look at every deal you have as an opportunity whether it’s a finance deal, cash or lease deal. We know that 80% of our money comes from a finance deal. So you have to set your menu up properly; I’ve witnessed F&I managers use the same menu whether it was finance, lease or cash and they will have products on their menu that the customer simply doesn’t qualify for. For example, they will have GAP on a menu where the customer is putting 50% down. Or they will have a service contract for 5 years or 75000 miles on a lease for only 3 years and it makes no sense! You have to tailor the presentation to the type of deal it is as well as the customer’s driving criteria, which you will find out during the introduction.

Lost Opportunities in the Service Drive
A lot of F&I managers are relying on the service managers to do their job for them. It is the F&I manager’s job to hold the service manager accountable to send them referrals. Instead of going in the front door, they should go in the service walk every morning and ask, “Hey, what’s going on? Have you got any deals today? Do you have any customers who are almost out of their factory warranties that I can talk to?” Instead of relying on the service manager to bring you the deal, you need to be proactive.

Mysteriously Appearing Deals, or Dude Where’s My Car?
Form an alliance with the sales staff. Go out and really talk with them and find out what kind of appointments they have going on. You have to have a willingness to manage deals, even if the customer isn’t at the dealership – that is the biggest challenge. Utilize your CRM, Customer Retention Tool. You have to have access to that tool and use it consistently, because it’s the eyes and ears of the sales and sales management staff, in order for you to be proactive and know what’s going on.

Multiple Product Sales
F&I managers don’t really follow a menu process that allows them to get multiple products. Often times they rely on the banks’ call back, and the banks frequently limit their callbacks to the number of products they can sell. They rely on how the deal was structured at the desk, and if the desk cuts them out then they feel that they can’t sell any more products. This is a lost profit opportunity because you can offer every product to every single customer – it’s in the manner in which you do that. Sometimes you may be locked out, but you can tell the customer, “Look, we are making these products available to you. Some of them we can finance and some of them we can’t. If you are interested, then we will find a means to get you into those products.” We should always tell them this because there are all sorts of ways you can do it, such as repayment plans. You can’t allow the call back or the sales desk to dictate your destiny in F&I.

Follow the 300 Rule, which is this: Present 100% of the products to 100% of the customers 100% of the time (assuming they qualify). Every customer must have the opportunity to at least know the products available to them. Consider the ABC’s of F&I: The A is always ask permission. When I was a kid, I was taught to say, “may I.” If you said, “can I,” then the adult would tell you that you couldn’t, but if you were polite they would respond, “Yes, you may.” So you learned to be polite and ask permission. The B is for break down the options. Instead of breaking down products on a menu, or any type of presentation you have, break down the options and narrow the choices. You have four columns on the menu – you might have six or seven products on the first column, that’s six or seven choices. You want to make that so that it’s one option. You break down the options, and therefore you only have four choices that the customer has now, instead of six or seven. C stands for close on the options, don’t close on individual products. When a customer says, “I’ll take GAP; I had it on my last car.” You respond with, “Great, which option would you like it in?” rather than just saying okay.

Utilize a final disclosure. The menu should be used as a disclosure, and the final disclosure should be your waiver. If you look at the F&I menu as a selling tool, then you are looking at it the wrong way. It’s nothing more than a disclosure after you give a presentation.

Finally, tell your story, don’t sell your story! Tell your story as you expose your products on the menu. Sell your story after you’ve exposed all your products on the menu. There’s a difference between a feature and a benefit. The feature is the tell, the benefit is the sell. You want the feature presentation initially, then after you do the feature presentation, you do the benefits presentation. That would be the sell.

Don’t let excuses get in the way of your strengths. The bottom line in avoiding lost profit opportunities is to consistently use effective processes, proper procedures and to always have a positive attitude. A bad attitude is like a flat tire; it will never get you anywhere. Remember these tips and soon you will be busy counting your profits and not thinking about your lost opportunities!

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F&I Sales Tools

F&I Sales Tools

Confidence and selling ability go hand in hand in the F&I office. The more confident an F&I manager is, the more convincing they become. Building confidence can be tricky though, given the overall spectrum and daily responsibilities today’s F&I managers are faced with.

Having a solid process they can rely on as well as a strong understanding of their products is a good start. On the other hand an efficient presentation along with effective closing techniques is the ultimate confidence booster. Providing F&I managers with the most up-to-date and clear-cut methods to present and close will build confidence and quickly take an average F&I manager into super star status.

There are countless tools we can provide to our clients that will enhance their F&I mangers’ business aptitude and confidence, from sharing specific word-tracks and closes to providing them with various props and point of sale material. I believe the single most effective tool we can craft for them, however, is an “Evidence Manual”. When filled with the proper content and used appropriately, an evidence manual is the game changer, by providing two very important and influential components that will certainly boost an F&I manager’s confidence in their process as well as their products:

1. It provides third party validation in the products that were offered; and
2. It provides a visual component to the intangible.

Each of these can create the comfort level customers need to make a favorable purchase decision.

Crafting the Tool
Filling an evidence manual with useful information is as easy as visiting the service department to gather information, such as ROs, replacement cost examples or even broken parts to display in the F&I office. Additionally, you can browse the Internet for relevant articles, such as a road condition problem in your area to support tire and wheel protection, vehicle theft statistics or how the environment can damage a vehicle’s appearance.

And as the saying goes, a picture is worth a thousand words. So, dust off your camera and snap a few shots of their service department, diagnostic equipment and toolboxes. You also want to get a few shots behind the parts counter, as this will help illustrate to the end consumer the investment the dealership has made to keep the shop running efficiently. Placing a list of the current month’s parts inventory in the binder substantiates the fact the shop does much more than oil changes. Pictures of vehicles that have been repaired by paintless dent repair technicians are also helpful.

Before-and-after photos of reconditioned vehicles treated with environmental protection are also good to include in their evidence manual. Photos of trade-ins being appraised by the used-car manager are another must. They help illustrate how a vehicle’s condition can affect its resale value. Copies of repair orders — particularly those showing the cost of a claim related to the products they offer — are also good additions to their evidence manual. You may also want to provide the F&I manager the current month VSC, GAP, theft, tire and wheel or any other product claims summary paid you receive from your provider to place in their binder. Just remember to make their evidence manual look neat and tidy.

Once you have taken the time to develop an evidence manual, now it’s time to teach the F&I manager how to use it properly. There is a time and a place for everything, assuming the F&I manager presents products and services off a menu. Utilizing the evidence manual any time before or during the initial menu presentation is not the right time or place, as it will most certainly create unnecessary sales resistance. The evidence manual should be nearby so that it is easily accessible when the time to present is right.

The time is right when the customer says “no” when asked to enroll or subscribe to product, plan or option. When the customer says “I’ll take my chances”, the F&I manager should respond by asking, “Do mind if I share something with you?” Since they sell intangibles, F&I managers will at times need to create additional ways to close on their offerings, ways that stimulate and initiate a buyer to take action. The evidence manual when structured and used properly will often provide the incentive the customer needs to say “yes I’ll take it.”

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Leasing Is Back

Leasing Is Back

Leasing is back with a vengeance. Attractive lease rates and high trade-in values are energizing its surge in popularity. As more and more of our clients’ customers see leasing as an attractive alternative for acquiring a new vehicle, our efforts in securing more products and profit on these transactions must intensify. If you want to stay ahead of the pack, it is critical that you find and relay creative methods to capitalize on the additional profit opportunities leasing presents for our clients’ F&I departments.

That being said, although leasing has become more popular with consumers, many F&I managers continue to overlook a lease’s potential — and, like cash deals, often put little or no effort in securing additional profit on them. We can attribute the lack of interest and enthusiasm F&I managers and sales managers have for leases to a lack of knowledge and understanding of how a lease really works. While there are many among us who do not know how a lease works, those who do embrace leasing with the same attitude and determination as finance deals and get great results.

Though certain parts of this article, such as how to calculate a lease payment, may seem elementary to some, the information is vital in developing the confidence and credibility necessary to go into a lease transaction and come out a winner. Information that will enhance their knowledge of leasing and provide them additional skills necessary to gain more commitments from their customers to purchase protection products and services on lease transactions. Learning how to perform basic lease calculations is the first step in understanding leasing and how it works.

Basic Lease Calculation
There are a few factors that need to be determined before you can calculate a lease payment. The first is the MSRP, which needs to include any dealer installed items (hard adds) that can be residualized; other items that cannot be residualized (soft adds) need to be rolled into the gross cap cost. The gross cap cost, otherwise known as the sale price, needs to be determined and must include any soft adds, upfront fees such as the acquisition fee, title and registration fees, dealer fee first payment or any other fees that will not be collected at the lease’s inception.

You must determine the cap reduction — better known as total money down — which can be in the form of a rebate, customer cash or trade equity (negative equity may be added to the net cap cost up to the lease companies maximum advance) that will be deducted from the gross cap cost to determine the net cap cost. The money factor needs to be determined; if the lease company provides you with an interest rate rather than a money factor, divide the interest rate by 2,400. For example, if the interest rate is 6%, 6 / 2,400 = 0.0025 money factor. All that’s left to select is the lease term, miles per year and residual percentage.

Once you have all the factors that will make up the structure of the lease, calculating the payment becomes a matter of basic arithmetic. Now, let’s put it all together and see exactly how a monthly lease payment is calculated.

Step 1: Determine the residual or future value portion of the lease that will be left at the end (MSRP x residual % = residual value).
Step 2: Determine the depreciation — that’s the portion of the lease which will be used (net cap cost – residual value = depreciation).
Step 3: Determine the monthly depreciation (depreciation / lease term = monthly depreciation).
Step 4: Determine the monthly rental charge (net cap cost + residual value x money factor).
Step 5: Determine the monthly sales tax (monthly depreciation + monthly rental charge = base payment x sales tax % = total monthly lease payment).

Now who needs a DMS to figure out a lease payment? I often say “knowledge is power,” and knowing how to calculate a lease using a simple calculator goes a long in projecting confidence and credibility all the while providing a solid foundation when explaining the concept of leasing to a customer. Here’s an example of how it all breaks down:

MSRP $35,000
Gross Cap Cost $33,000
Cap Reduction -$2,000
Fees +$1,260
Net Cap Cost =$32,260
Residual @ 52% $18,200
Lease Term 39 Months
Money Factor .00085
Miles Per Year 12,000
Sales Tax 6%
Step 1: Residual
$35,000 MSRP
x .52 Residual %
= $18,600 Residual
Step 2: Depreciation
$32,260 Net Cap Cost
-$18,200 Residual
= $14,060 Monthly Depreciation
Step 4: Monthly Rent Charge
$32,260 Net Cap Cost
+$18,200 Residual
= $50,460 Total
x .00085 Money Factor
= $42.89 Monthly Rent Charge
Step 5: Sales Tax
$360.51 Monthly Depreciation
+ $42.89 Monthly Rent Charge
= $403.40 Base Payment
x .06 Sales Tax %
= $24.20 Monthly Sales Tax
+ $403.40 Base Payment
= $427.60 Total Lease Payment

Start on the Right Foot
It is important to start the transition to F&I on the right foot, and perhaps more so during lease transactions, as they can be more of a challenge. Making a great first impression sets the tone for a better relationship with the customer. Meeting and greeting customers out in the showroom, in their comfort zone, rather than having them pulled along the dreaded walk to F&I is most important to setting a positive tone.

It is equally important that the F&I manager establish credibility right from the start. At the point of sale, customers are done with small talk and want to get right down to business. So teach your F&I managers to save the small talk for the sales consultants. F&I managers need to display confidence and credibility, and take on an advisory role. The more you know about your customer the better off you’ll be.

Albert Einstein once said “Know where to find the information and how to use it — That’s the secret of success.” So true; you will find indispensable information about your customer only if you ask, and that knowledge is the secret to F&I success. The information gathered by the F&I manager permits them to present products and gain commitments to purchase based on their customer’s criteria rather than theirs. Presenting based on a customer’s criteria is the game changer, as it makes better sense to the customer and is seen as much more valuable to them.

Of the most successful F&I managers, nearly all have one thing in common: They all adhere to a consistent method when making a presentation of F&I products and asking for the sale. Their willingness to remain consistent, along with their understanding that their process drives their performance, has permitted them to develop to the point that they are able to display confidence and credibility during every presentation. These attributes are essential in the F&I arena, and you can depend on them for consistently good results.

Starting on the right foot takes discipline and a willingness to let the process drive profits. It all starts with three key components; F&I managers need to “set the tone” they need to “establish credibility” from the start, and they must “gather information” they can use to form a presentation and gain commitment to enroll in F&I products and services based on their customers’ criteria.

Take it to the Next Level
Tell, don’t sell. Telling the features during your presentation, and selling the benefits when asking for the sale is the best advice anyone can offer. Telling allows the F&I manager to expose all the products in the shortest amount of time, all the while making it seem as though they are telling about one product with a whole lot of features. Selling during the presentation oftentimes will wear out the customer, causing the F&I manager to overlook a product that may have made better sense to their customer. Selling more products on leases is quite simple when the presentation makes sense. After making a telling presentation and the customer says “No”, try this:

“You really have only three responsibilities outside of making the payments on your leased vehicle: 1) maintain the vehicle, 2) provide insurance on it and 3) return it in satisfactory condition. That’s why I am surprised you didn’t select option three, which is the most popular option with our lease customers because it provides them with the most logical coverage. Excess wear and tear provides a remedy for unforeseen lease-end charges, the pre-paid maintenance program is set up to fulfill your requirement to maintain the vehicle and the tire-and-wheel program provides protection for the most vulnerable part of the vehicle. Now that I have restated the benefits of the programs, doesn’t it make sense to enroll?”

Though words speak volumes, utilizing all the tools F&I managers have at their disposal will significantly improve product sales as well. Tools such as evidence manuals, props, the lease-end “wear square” lease companies provide to the customer and the lease contract itself is a great selling tool. By showing customers the excess wear and tear portion of the terms on the contract and providing them with a remedy could be the difference in a sale or no sale of an environmental contract, paintless dent repair or excess wear-and-tear coverage. Hand them a set of keys with a price tag on them and remind them they will need both sets of keys at lease termination.

Do your clients’ F&I managers utilize an evidence manual that beholds information on the benefits of the products and services being offered, as well as proof of claims paid? That just might be the difference between a sale and a no sale. When all else fails, perhaps the F&I manager can rely on the “apartment” close:

Business Manager: “Do you mind if I share something with you?”
Customer: “No, not at all.”
Business Manager: “Leasing a vehicle is a lot like renting an apartment. May I explain?”
Customer: “Sure, go ahead.”
Business Manager: “There may be another way to look at it. Do you mind if I share something with you? Let’s say you’re renting an apartment and the air conditioner stops working. Are you going to pay for the repairs yourself? Or will you be relying on the landlord to pay for the repairs?”
Customer: “Why, the landlord, of course.”
Business Manager: “What if the roof begins to leak?”
Customer: “I’ll call the landlord.”
Business Manager: What happens when you leave the apartment? Are you going to patch and repaint the walls where you hung your paintings? Are you going to clean or replace the carpet that may have become stained while you were living in the apartment?”
Customer: “No, I would expect the landlord to take care that.”
Business Manager: “I couldn’t agree with you more. I would feel the same way. Leasing is a lot like renting an apartment. If something should go wrong mechanically with the vehicle, you can rely on the manufacturer’s warranty to make the repairs just like you would expect the landlord to make the repairs to the air conditioner and roof. When you turn the vehicle in to the lease company, like the landlord, you should expect some wear and tear. However, if the landlord determines excess wear and tear, they’re able to retain all or a portion of your deposit, right?”
Customer: “Yeah, I guess so.”
Business Manager: “Your vehicle lease works much the same way, but there is no security deposit for the leasing company to recover from. So if the lease company determines excess wear and tear they will send you a bill for the repairs, regardless if they make the repairs or not. Can you see how spending just a few dollars more per month now could protect you from the potential of spending hundreds or even thousands of dollars in unexpected lease end expenses down the road?”
Customer: “Yes. That makes sense!”

Sure that makes sense, and a sensible, no-nonsense presentation will make a world of difference. Leasing is a great choice for customers that are interested in attaining the lowest cost of driving. A lease allows customers to get a new vehicle every few years, it minimizes residual risk of purchasing and allows the driver to drive a vehicle that is (in most cases) under factory warranty throughout the term of the lease. However, specific responsibilities remain that go along with a lease. It is through our willingness to uphold a process regardless of a lease, finance or cash deal that we will yield the greatest result.

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Do You Feel Lucky?

Do You Feel Lucky?

While researching new training material I came across Gary Player’s (the golfer) famous quote; “the more I practice the luckier I get” and it got me thinking as to the importance of our role as trainers and consultants, more importantly the effect that “role playing” has on developing and improving our clients talent and skill levels. It is not uncommon during a typical visit or end of month review at our client’s dealership to limit the visit to a simple review of the “numbers” followed by a discussion over areas that need improvement and close the review by putting an incentive in place to move specific products in an effort to increase profits. Sound familiar? If so, it’s time to change it up a bit and get more creative and decisive. What better way do we have to ensure all our efforts to increase proficiency are paying off without inspecting what we expect? So what does “the more I practice the luckier I get” have to do with it?

When do most business managers practice? Unfortunately the answer is when they are in front of a customer! That is a big problem since the only critique a customer gives to a business manager is when they say “no, I don’t want any of that stuff” or they typify it by an “x” marked on a survey. You will you never see or hear about a customer telling the business manager “Now Johnny, that wasn’t so bad but if you just slowed it down a little bit and instead of saying ‘but’ say ‘and,’ I think it would have been much more effective on me. Now, let’s try it again Johnny.” If we continue to allow business managers to practice on their customers, it is like telling them to run five laps then hit the showers after they failed to sell anything, discipline with no resolve. The point is when practicing a shot, throw or swing in front of a coach – it is examined and a plan of action is determined to make it better. That’s how you develop talent (the aptitude) into skill (the ability). Without “role play” and the critique that accompanies it, the only time the business manager gets to develop his talent and improve his skill is in front of a customer and when they miss a shot, screw up a throw or strike out, the customer is not going to tell them what they did wrong or right for that matter. So do you feel lucky? Do you…?

As Agents, Regional Managers, Representatives or whatever title you may go by, you have a monetary stake in the business managers’ successes and failures, therefore when visiting you are with your clients’ managers you need to clearly affect the bottom line. You know how to get it done, now it is a matter of getting the managers to take action and adhere to your claim. For your ideas, techniques, tips and tactics to stick or word tracks to transform into natural responses, it is going to take practice, practice and a lot more practice. It’s been proven over and over again that one of the most effective ways to develop sales ability is through role play. Unfortunately, a lot of the managers as well as sales consultants I’ve worked with have had an intense aversion to role playing. Their reasons (excuses) have ranged from not having enough time to telling me they are not comfortable role playing but not to worry because they are more relaxed in front of their customers. My all-time favorite, the one excuse I hear the most is, “you caught me off guard.” YOU CAUGHT ME OFF GUARD? That’s ridiculous! It has been my experience that their reaction to role play and their performance during role play is pretty much the same thing that happens when they are in front of a customer. It is time to get serious; if they do not have the time for you they most likely will not have the time for their customers. If they feel uncomfortable in front of you they are undoubtedly uncomfortable in front of their customers and if you caught them off guard, well just think of how they handle a customer telling them “no.” The difference between them being good and great is in their willingness to role play, to practice amongst their peers. If they conquer their fears and overcome their resistance to role play with you, the better they’ll be in front of their customers. It is that simple.

The greatest challenge in front of us is our ability to get them to embrace role playing. My experience with role play is that is has to be creative and fun in order for the participants to engage willfully. There are many ways to make role playing a more enjoyable and even fun experience! It’s been proven that we learn and grasp techniques better when we are having fun. Just think back to the best training sessions you have attended or participated in and you will know it is true. So why wouldn’t you want your clients to have fun while they’re learning? The more they enjoy what they are doing, the more they are going to get out of it and the more you will benefit from it. There are three participants in an effective role play session. They are the Associate (the person trying the skill), the Customer (the person reacting to the skill), and the Coach (the person observing and giving feedback). Of the three, the most important by far is the Coach. The Coach can also be the Customer but it’s usually more effective when you have three or more people working and learning together. The more people you have participating, the more feedback you’ll get. Here are a few role play techniques I use which yield much success:

The Round Robin:
You have three or more participants who play the role of the Manager (associate) and you play the role of the Customer (coach). Create a scenario or select a variety of customer objections that you present one at a time. Have each manager follow along by keeping pace with the dialog as you select a manager at random to continue where the previous manager left off. Each time a manager fumbles, go back to the start of the scenario or objection until you go full circle without having to make any corrections.

Flash Cards:
Rather than having to make up scenarios or come up with objections on the spot, prepare a few flash cards in advance. If you write the scenarios or objections on index cards, they will provide a clear structure for the role play and help keep you and your participants focused on the objective of the role play.

Video or Tape Recording:
Nobody likes to see or hear themselves on tape, and the camera does add some pressure and opposition, but if you can get past those issues, being videotaped can be an invaluable part of role playing. When you’re done, you have the chance to watch the tape and make valuable critiques. The camera never lies; you’re going to see what is being done wrong as well as what is being done doing right. Want to eliminate pressure and resistance they may have to taping? Try lending them a cassette recorder or video camera so they can record or video tape while no one is hearing or watching them. Have them critique themselves and re-tape until they are satisfied with the results and proud to present the video or recording to you.

Catch Them Off Guard:
Rather than asking managers what they would do in certain situations or how they handle specific objections, out of the blue present the manager with a situation or objection and see how they respond to it. If you “just” ask them how they respond or act during certain situations they will always give you the answer they know you want to hear. You will be amazed at the responses catching the manager off guard by popping an objection on them without warning such as “Do I have to take it now?” will reveal.

Next time you visit with your client, try one of the techniques I have shared with you. These little suggestions will make role play more bearable, and who knows? You may even end up liking it! Perfect practice makes a perfect presentation – it’s not luck!

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