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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.

Breathing

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.

Growth

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.

Appetite

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.

Reproduction

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.

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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.

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