Author Archives | Rick

Think Like A Customer

Think Like A Customer

What do Starbucks, Apple, Fed-Ex and Dollar General all have in common? Each company had a crossroads moment when their business was in decline and the future was uncertain. Also each company had a turn-around that was based on an intentional effort to make changes that were based on what the customer thinks and wants.

Dollar General is a surprising company in the list above. However, their effort to adjust their business model, based on what their customers think, has led to 2800 new stores and 30,000 new jobs since 2004. All great company leaders have a clear understanding of their customers. It is the basis of why a company exists. It’s the foundation of an organization’s vision and strategy. Customers, if we listen to them, will tell us all we need to know to develop the right products and services to grow a viable business.

We all have an idea of what we think is the best way to present products. Should we talk about products immediately after meeting the customer, or after we have discovered why the customer needs them? When should we present the menu? Should we conduct a customer interview at the salesperson’s desk or in the F&I office? Should we use an iPad in our presentation or the traditional paper menu? The plain answer is: it really doesn’t matter what I think or what you think. What the customer thinks is what really matters! We should filter everything we do in the F&I office through the concept of “What does the customer think?” Customer behavior and preferences are changing frequently, and the same manner utilized effectively to present products several years ago is obsolete today. While the principles of selling are timeless, the manner in which they are carried out does change.

When the video rental market welcomed a new player called Red Box, there were others that said, “It will never work.” You see companies that refuse to change and adapt to customer behavior and preference and get left behind. F&I professionals who refuse to change do too! Let’s look at two important ways we need to adjust our presentation that matches what customers think and like.

Customers are interested in what they do and what they like.
If we stop talking about ourselves and listen and learn more about each customer, we will have the clues to what will lead them to buy. The most important tool in the F&I office is “you told me earlier.” When we repeat something a customer told us, they know they have been heard. Then the chances they will buy our products go up dramatically. Customers are not likely to buy our products because of what they hear, but because they feel they have been heard! There is a direct correlation between your ability to listen effectively and the level of your success. I have yet to find a top-producing F&I professional who doesn’t have superior listening skills.

Use the 70/30 rule.
Customers should be talking 70% of the time and we should be talking 30% during the time leading up to the menu presentation. That demands that we use open-ended questions to get them talking.
Recently while reviewing a video of an F&I transaction, I counted the facts that I learned from the conversation. I learned 12 facts about the F&I manager, including where they grew up, what they drive, what F&I products they buy and how long they have been in F&I. I learned five facts about the customer. I also watched the customer respond to the question “What brought you in to buy a car today?” She responded, “My husband has been given 12 months to live and he wants me to have a new car.” The F&I manager responded, “That is great. So what are you trading today?” Really! She wanted to talk about her husband and her family. Guess how many products they sold to that customer? You guessed correctly. Zero!

Getting customers to talk about themselves is not a trick to get customers to buy. It’s what they like to do. So let them! If we let them talk about what they do and what they like, they are more likely to be comfortable with the process and listen to what we have to say. That’s the goal. So stop talking and start listening more intentionally. Customers love to talk about themselves. Let them!

Customers want to know what their options are.
Customers like to review their options. They like a process without being pressured to buy a product that someone else thinks they need. They simply will not buy a product they don’t want and don’t think they need. Our effort to lead the customer to buy should only happen after we have established that they need the product in their eyes, not ours. Customers expect someone is going to pressure them to buy products they don’t want or need. What a relief when they find a different experience. You see, if we want to change the outcome of our F&I presentations, we must change the experience.

Remove the pressure from your presentation. When pressure goes down, customer resistance does too! When a customer says “No”, welcome it and agree with their decision. “Absolutely, the last thing you want to do is increase your payment. If you thought you were going to have problems with your new Lexus, you would buy something else. Am I right?” The pressure to buy just went out of the sales balloon and you now have the opportunity to follow up with, “You certainly don’t have to buy anything you don’t see value in. However you said something a minute ago that really got my attention.”

Use the menu as it was intended: to be a non-threatening disclosure of the customer’s options, not an effort to sell. Do not sell the first time through the menu. Just simply tell them what each product is and what it does. Even something as simple as the layout of the menu can put a customer at ease. They expect us to try and sell them an “extended warranty.” So if it is listed first on the menu immediately they think, “I knew they were going to try and sell me that,” and they stop listening to anything else we say. Why not list a product they are not familiar with first and list the service agreement further down the list? Customers might like it. And remember: it doesn’t matter what we like, it only matters what they like.

Starbucks didn’t offer free Wi-Fi or breakfast items until they listened to their customers. Fed-Ex didn’t develop the “total office experience” until their customers told them what they wanted. And Dollar General didn’t offer grocery items or new, clean and convenient locations until their customers told them what they expected. Customers have something to say. The question is: are we listening? And even more, are we willing to change to think like our customers and give them the experience they want? The answer to that question holds the keys to our future success!

Posted in F&I, Training Articles1 Comment

Tire and Wheel is Strong and Getting Stronger

Tire and Wheel is Strong and Getting Stronger

Tire and wheel road-hazard protection has become one of the fastest-growing products provided in the F&I office. While there are a few isolated areas of the country that have endured high increases in the cost of this product, for most it is a great profit opportunity for the dealer, and a great value for the customer. That’s a recipe for success.

There are three trends fueling this growth.

1. The evolution of the type of tires and wheels on today’s vehicles.
Customers are demanding wheels that enhance the look of the vehicle. The manufacturers have responded with alloy wheels that are bigger and more costly to replace if damaged. The larger wheels are complemented by low-profile tires. Both factors have produced a tire and wheel that are more susceptible to damage. Tires are the contact point of the vehicle with the road and are purposely excluded from almost all manufacturers’ warranty coverage. This provides for a level of risk to the customer and genuine need for protection.

2. The bundle.
Many providers are bundling products that are attractive to customers, which is driving acceptance levels. An example would be tire and wheel together with paintless dent repair, windshield protection, key replacement and roadside assistance on import vehicles that do not provide this, along with the other factory coverages. We live in a “bundle” retail environment and there is a perceived value with customers when they are presented products in this manner, as opposed to a long list of individual products. It’s how they buy fast food, cell phone service, Internet and cable/satellite television service — and it is a preferred way to buy protection on their vehicle.

3. Training, training and more training.
Technology has provided fast menu options that are integrated with DMS systems. Many come with pre-loaded videos to illustrate the value of the coverage. However, these offerings have not driven acceptance levels. Today’s F&I manager must be prepared to provide the cost to replace a tire and/or wheel on the vehicle the customer is buying to show the level of exposure. F&I managers lose credibility if they tell a customer the cost of replacing a tire and wheel on the vehicle they are buying is “around $600.” However, if they are told “the cost would be $183 for the tire and $378 for the wheel for a total of $561,” that tells the customer you know what you are talking about and makes the likelihood of selling the product go up dramatically.

An interactive process that discovers why that particular customer needs the coverage — and the ability to match that to the benefit provided — will always lead to more sales. Does the vehicle being purchased have a full-size spare? Does the vehicle have run-flat tires, and how does that affect the cost of replacement? What is the series of the tire? All these are questions the F&I manager must know the answer to for the vehicles they offer. This requires consistent training and follow-up to assure that a fact-filled, needs-based process is being used to sell the product. Technology, menus and videos do not sell F&I products — well-trained F&I professionals do.

All products have life cycles, and tire and wheel road-hazard protection is still young by comparison. It provides needed coverage at a value-based price to the customer and is providing good profit levels for dealers. Bottom line, it is a great product that is a strong performer and is still growing stronger everyday. The key is to train the F&I manager to utilize a needs-based sales process and have a level of product knowledge that will drive sales. Now let’s get busy helping customers make good buying decisions!

Posted in Industry0 Comments

Insights From the Front Lines

Insights From the Front Lines

At the 2012 Agent Summit, I had the opportunity to serve as moderator of a panel called “Five Ways to Take Your Agency From Provider Rep to Partner.” Our goal was to provide a discussion that would highlight effective ways to become a true partner with today’s dealer — and lead them to record profits.

I was joined by Tim Blochowiak of Protective Asset Protection, David Duncan of Safe-Guard Products International, Garrett Lacour of RoadVantage, John Luckett of First Extended Service Corp. and Ricky Wolfe of Interstate National Corp. These five strong voices in the agent arena shared how they are working through a changing market and providing innovative products and creative ways to maximize dealer profitability.

Let’s take a look at some of the many insights they provided:

Agents must offer new ways to present products.

In the F&I office, the presentation must match the changing behavior of customers. As an agent, bringing that kind of creative change will differentiate you from the competition.

The recent recession has made dramatic change in how consumers view their money. They are more resistant than ever to what they perceive as “extras.” Most customers who have bought a vehicle before have already experienced an F&I presentation. If the products and the way they are presented is the same as their last experience, they’re more likely to be resistant.

Great companies have used a changing environment as an opportunity to examine the way they do business and make creative changes that move more customers to buy.
Take Apple Computer, for example. In 1997, everyone was writing the company’s obituary. Then they re-launched their company with creative ideas and products and have since become a leader, and not just in home computing. Apple has become a new standard bearer for designing and marketing products that customers are motivated to buy.

On the flip side, companies like Kodak are going under because of their lack of urgency to change. Kodak introduced us to film photography and remained a market leader for decades. However when the market demanded digital photography, Kodak stalled. Now, they’re in bankruptcy. The message was clearly defined: Change and innovation today will lead to record profits tomorrow.

Adding underperforming dealerships to your roster will not lead to long-term and sustainable growth.

Successful agents have learned that it’s not about adding dealerships; it’s about selling products. Dealers need and demand income development. A well-trained and focused F&I team can change to meet the new perspective of customers and provide record profits in a challenging market. The bad news is that most dealerships cut or even eliminated their training budgets during the recent recession. The good news is that they’re turning to their agents to provide new training.

You have the opportunity to take a hands-on approach to growing the overall skill level of your dealers’ F&I teams. Your toolkit should include role-playing exercises, benchmarking and accountability. Certification through off-site training also will be valued and sought after by dealers.

The next step is establishing a new F&I process that utilizes the finer points of your training. Customers have already seen the high pressure, memorized sales pitch many F&I managers still swear by. Introduce your dealers to a customer-focused process that will provide an environment where customers feel someone is trying to help them make good decisions, rather than just trying to sell them something they don’t want or need.

Also, there is real opportunity to sell service contracts in the service drive. Many dealers have tried and failed in the past. But there are better approaches out there than there were 10 years ago, and it may be worth another shot. Providing your dealers with a new revenue stream will definitely help set you apart.

“How are you different than other agents? What can you provide that they don’t?”

Agents that are in a growth mode today have heard those questions from dealers more than once. Those who have the answer will see their stock soar.

Dealers are possibly the most sophisticated consumer in the market today. They have heard every sales pitch for just about every product on the market. What they really need is a true partner who can provide training, processes and the ability to bring the change needed to their organization to sell those products in today’s market.

There is a shift taking place in the dealerships that survived the downturn. Dealers can no longer afford to have an untrained and unfocused F&I team presenting the products at their stores. Why not take a leadership role? The gentlemen who provided the insights listed above know that the agent segement will see record growth in 2012 and beyond. In other words, our best days are still ahead of us. Let’s help our industry change to see unprecedented growth and profits!

Posted in F&I, Training Articles0 Comments

The Anatomy of the Deal

The Anatomy of the Deal

“All the functions of the General Agent are interdependent of each other just as the parts of our body.”

One of the privileges I have enjoyed has been the opportunity to work with some of the finest dealers and general agents across the country. Every where these two entities cooperate effectively it creates success. Simply put, they need each other. Just as the human body cannot function at optimum levels unless the different parts are working in sync with each other, neither can the dealer without being in sync with an effective general agent. The day of looking to a general agent as just a product provider is past. Dealers need a true partner that has a forward-looking plan for growing their business.

There are several major functions of the human body that if they fail the body cannot survive. The anatomy of the relationship between the dealer and the general agent will only produce success if several functions are working properly. Let’s take a look at the major functions of the agent that will create healthy success.


Just as the body must take breath in and out consistently or it will die, there must be a consistent intake of information gathered by the agent, which is then exhaled by the implementation of an effective plan to create success in the dealership. The agent has to effectively analyze where the true strengths and weaknesses are in the dealership and must drill down and take in not only the numbers that need addressing but also the attitudes and concepts that may be blocking success.

Once you have inhaled the information to identify the dealers’ needs you can produce an effective strategy that is uniquely suited to them. A general template approach of how to drive production in a dealership will not work. Each market is unique as is each dealership within that market. When a unique profit plan is created the dealer knows they have a true partner on their team and the opportunity to maximize success is created.


The human body has approximately 100,000,000,000 cells. Each cell can independently take in nutrients, convert them into energy, carry out specialized functions, and reproduce as necessary. If cells stop dividing and growing then disease sets in and cancerous cells may form. The agents that are distinguishing themselves in the marketplace are those that provide ongoing growth opportunities. As customers become more resistant to F&I products, dealers must have F&I managers that are growing in their skills and abilities.

Providing cutting edge training that goes beyond the one time class model and provides an ongoing growth track will produce amazing results. The challenge of how to provide effective training and how to justify the cost has puzzled agents for years. However in today’s economy it simply is not possible to enable dealers to reach their maximum potential in profitability without it. Dealers consistently rank training as a top priority to grow their business and the agent that provides it will be top on their list. When F&I managers are not growing they will see the overall health of the department and profits decline. The profits on the outside will never be stronger than the growth that is going on inside the members of the dealership team.


One of the challenges with an illness is the person’s appetite may diminish and make it even more severe. One of the most important functions of the agent is to make the F&I mangers hungry for success. We know F&I managers are driven by the rewards of reaching top levels of performance. I have found they are driven by both an effective pay plan and also by being the best and excelling in light of their peers. Clearly communicating to an F&I manager their potential so that they can see themselves performing more effectively is a key to creating the hunger needed to drive performance.

The effectiveness of an F&I manager is multiplied when growth opportunities and motivation are both present. Giving people the means to grow without the motivation needed is unhealthy and tragic. Everyone at some point will have the inner fire go out. The day-to-day struggle to consistently produce results can cause the energy that produced last month’s results to wane. The only way to motivate a team consistently is to be in regular face to face contact with them. These motivating encounters can challenge and produce the hunger needed to turn performance around and be a game changer. All dealers are looking for results and the key to making that happen month after month is to assure that the structure from pay plan to work schedules is accompanied by the motivation that creates the hunger that produces results.


In the words of the famous film the Lion King “It’s the Circle of Life, and it moves us all.” Our bodies are made to provide for the perpetuation of our families. An agent’s offering is not complete without creating a perpetuation plan within the dealership that will properly identify potential in current team members and where they might function more effectively in the days ahead. A dealership that provides consistent success will need to replace, promote or add members to their team. The first place they look for help is the agent. Many times moving the best F&I manager to a sales manager’s position can only assure that you just lost your best F&I manager! The perspective that the agent has is invaluable in this process and can avoid personnel moves that are counter productive and create positive ones that will fuel more growth.

A consistent analysis of the dealership to develop a strategic plan to maximize profits coupled with consistent growth opportunities and the motivation to produce at optimum levels is what dealers need and expect. Agents that provide a well-balanced effort with all the parts functioning effectively will create a healthy dealership team and long-term partners and success.

One of the main reasons for the great success of Apple Computers has been their ability to stay one step ahead of the customer and identify what they will need and want before they even know they need it. Knowing what product, change in process or personnel move is needed even before the dealer knows they need it will enable an agent to assure the dealer that they will always be on the cutting edge of sales and profitability and that they have a partner that is not only getting their business, but growing their business.

Posted in F&I, Training Articles0 Comments

Training, Monitoring  and Motivating F&I Managers

Training, Monitoring and Motivating F&I Managers

To build the value of your Agency and dominate the competition, you must be an Agent of change!

The recent downturn in the economy has created an entirely different focus in the mind of the customers who show up in automobile dealerships today. Their mantra is “nothing extra” and they are more budget conscious than ever.

A recent medical survey tracked individuals for two years who had major heart surgery and had been counseled to make major lifestyle changes or they would die prematurely. The results showed that 90% had made no changes at all. They would rather die than change! And many F&I Mangers are just as slow to change. The role of the General Agent is to provide the “Training, Monitoring and Motivation” to make the changes needed to see record production in an ever-changing environment.

Providing innovative products in a value building Protection Package is more appealing to a customer than multiple products presented individually, and customers respond more positively when they are presented in that manner. Sometimes simply changing a name, such as a Warranty Compliance Program as opposed to Pre-Paid Maintenance can change the perception of the value of a product. Few want to pre-pay for services; however, everyone wants to stay in compliance with their Factory Warranty.

Today’s selling environment requires not only a change in the way we approach products, but the actual process used to sell them. A major area for change is the time waiting to get into the F&I office. F&I Managers are using the “wait time” to create the perfect menu and get all the paperwork pre-printed.

Every minute a customer waits to get into the F&I office is equal to 10 minutes in that office. Customers should be brought in immediately. This allows the F&I Manager to “diagnose” what that particular customer needs before they “prescribe” the solution.

I recently heard from a close relative who had discovered a stack of lottery tickets on his desk and one of them was a winning ticket worth $486,000. He also discovered it was 92 days old and the money had to be claimed within 90 days. He missed a great opportunity because he put off checking the numbers! We will lose great opportunities for record profits if we refuse to lead our dealerships to profitable change.

Training a new generation of F&I Managers requires the training must be consistent, challenging and provide solutions. The training effort must be a process and not a one-time event. An F&I Manager’s success is hidden in their daily activities and they must be challenged to spend a minimum of 30 minutes each day practicing their skills. The F&I experience must be an interactive one and one that enables the customer to self-discover their needs.

There are three (3) levels of F&I Performance.

Level one (1) Telling them: This will have the F&I Manager talking 70% of the time and all the customer does is listen. This is the lowest level of performance and while F&I Managers can sell products by just talking about them, they will never reach the levels of which they are capable.

Level two (2) Showing them: This level uses visual aids that enables a customer to see the benefits of a product and might include a repair order to illustrate the high cost of simple repairs, a hand drawn visual or a brochure. When two of the five senses are engaged the likelihood of selling products goes up.

Level three (3) Involving them: This is the most successful presentation. Handing a customer a part covered by the VSC makes the products come alive and customers are now holding the problem the product will solve.

Training must be challenging! An unchallenged F&I Manager will crumble when they are challenged by the objections and questions of customers. Good F&I Managers determine what to “say next” while a well-trained and challenged one works on what to “ask next.”

Asking intentional questions will enable customers to open up and F&I Managers to uncover the reasons why each customer needs the products that are offered. The challenge every day in the F&I office is to turn a ‘No’ into a ‘Yes’ and three things must happen in every presentation to make that happen consistently.

  1. Every customer must learn something they didn’t know if they are going to do something they have never done.
  2. Every customer must feel something. Buying intangible products is an emotional decision. You can’t reason most customers into buying products. However, you can paint a picture and place them in it so they can feel what it would be like to need a particular product and it’s benefits and not have it.
  3. Every customer must be motivated to do something about what they have learned and felt. Use the “you told me earlier” facts to move them to buy.

Training is the gas that drives performance; while monitoring activity and production will keep everyone on course. When you monitor performance it goes up! Training activity precedes an increase in production so we should monitor and reward training activity. Providing specific training activities for the F&I Manager to complete and tracking their completion will encourage them to continually improve their skills.

There are three levels of F&I professionals and monitoring their commitment to consistent improvement will ensure they are moving upward in their abilities.

  1. Risk Takers – They are always searching for more product knowledge and will work consistently to improve their skills so they will provide a customer focused and value building presentation.
  2. Care Takers – They avoid the pressure to improve. If they can just keep the status quo and stay at their current level of production they are happy. All of their energy is focused on making sure numbers don’t go down, not working to see them go up!
  3. Under Takers – Their desire to learn and improve died a long time ago. They look for a position where little is expected of them. They just complete paperwork and sell whatever customers ask for and have lost the desire to improve.

What each F&I Manager needs is a navigation system, a turn-by-turn approach to get them on the path to improvement and keep them on the road to increased profits. F&I performance does not improve because someone wants it to. It improves because you have a plan. Have your F&I Team project short-term goals that are specific, measurable and attainable and then hold them accountable for the results.

A well trained F&I professional that has been challenged and their production levels monitored to ensure maximum results will only reach those goals if they are motivated to do so! F&I Mangers are motivated to excel because of a competitive spirit, recognition and the income they produce. Compensation is a large part of what will drive performance. A forward-looking pay plan will include a $PRU, Training and CSI component.

Compensation should also be based on individual performance and not a pool of money produced by an entire team. You can help create an environment that produces the results you desire by rewarding the activities you would most like to see. Encourage creative ideas and include F&I Managers in discussions concerning product mix and process adjustments. Then they will take ownership of the plan to succeed.

Agents of change will produce the next level of F&I Champions. Those managers will be well trained by those who are committed to their success and will monitor their progress as they watch them produce at record levels in the days ahead.

Posted in F&I, Training Articles1 Comment

Page 6 of 6« First...23456