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Compliance Keeps Pace with Technology

Compliance Keeps Pace with Technology

Attendees of the eighth annual Agent Summit found a friend in Gil Van Over III, who pulled double duty for the second year in a row: In his role as the executive director of Automotive Compliance Education (ACE), Van Over led the five-hour review and exam for Automotive Compliance Specialist certification — which was open to any registered Agent Summit attendee — on Sunday, May 20. He then presented “Compliance Jeopardy,” a featured presentation, the following day.

Agent Entrepreneur caught up with Van Over on the eve of Agent Summit to learn more about the origins of ACE and how its directors keep up with an increasingly digital industry.

AE: Gil, most people are familiar with you as the founder of compliance consulting firm gvo3 & Associates. How did you come to establish ACE?

Van Over: As a long-time compliance consultant, I’ve had a front-row seat to observe where compliance efforts fell short in the real world of dealerships. It was easy to see why. How can people be expected to follow laws they don’t even know exist? And while I was aware of certification programs on the market, they tended to be “one and done.” Once you got certified, that was it. But in real life, people forget things, and laws change. We sensed a desire for someone to build a better certification mousetrap. We just didn’t think it would be us.

Then, in the summer of 2016, one of our large dealership groups asked if we could put together a certification program that addressed what they saw as shortcomings in the program they were then using. That same week, Agent Summit contacted me with the same question, as that show was committed to providing a certification session in connection with the event, and the original certification partner dropped out on short notice. So, it was that alignment of the stars that really got the ball rolling.

AE: You say you wanted to “build a better certification mousetrap.” How does ACE differ from other certifications?

Van Over: ACE was built to address the evolving digital world in the automotive space. Back when I was a college student, I made a quarterly trek to the bookstore and amped up my parents’ credit cards by hundreds of dollars to purchase required textbooks. I’d study the textbooks, attend lectures, then take a final exam. Today’s college students study online or with ebooks, take validating quizzes throughout the learning experience to confirm comprehension, then test.

The ACE model is like today’s college model. All our training is provided online in modules lasting 10 to 15 minutes. The student must pass a quiz on the short module before moving on. Once all modules are completed, the student takes an online certification test.

ACE requires an annual recertification. The compliance world is ever-changing. Consider the Military Lending Act as the latest challenge. We have also taken on some recent clients who did not realize they were required to have a Safeguards policy in place. ACE looked at other professional industries and their required continuing education. Four of the top five trusted occupations in the United States require periodic continuing education and testing. The lone exception is the military, and being a military brat, I can confirm the military highly encourages furthering education of its members.

ACE also recognizes that compliance in the variable operations process has mistakenly been saddled with the “F&I compliance” moniker. Many of the issues we note in our compliance reviews either occurred or germinated in the sales process. We decided that each of the participants in the variable process deserved its own curriculum. There are seven different curricula, from sales and BDC to accounting. For F&I, sales, and BDC managers, “Compliance Officer Certification” is the comprehensive course. And, of course, agents have a dedicated curriculum.

Another big issue to address was cost. There was a general feeling that certification cost too much, so we priced the core F&I certification at around half the price of the best-known existing certification program. We deliver the content in the dealership, so training can be accessed during normal business hours at the candidate’s convenience.

AE: Can you give an example of new topics that have cropped up since ACE was founded?

Van Over: Sure. Last year’s “new” topic was the revised “Used Car Buyer’s Guide” that dealers had to migrate to before January of 2018. And this year’s update module will address the impact of U.S. Department of Defense’s reinterpretation of the Military Lending Act.

AE: How does ACE deliver its content?

Van Over: We deliver the video-based content over the Internet, using a learning management system that tracks candidates’ progress and test results.

AE: Other certifications require examinations to be taken in person, with proof of identity. ACE does not. Why?

Van Over: The only reason we could think of to require in-person testing was that you don’t trust the candidates not to cheat. We believe that 99% of those who take the time to learn the material and take the exam are honest people. We have faith in our members. Testing centers are expensive. Why penalize 99% of the candidates for the 1% who might want to take a shortcut? It just didn’t make sense. Besides, we know from our participating dealer groups that they generally proctor the exam in-house anyway to demonstrate the seriousness of their commitment.

AE: How long does the ACE certification program take?

Van Over: That depends on the certification a candidate signs up for. The sales associate program shouldn’t take much more than 90 minutes. The compliance officer training could take 10 to 12 hours.

AE: How long does the certification exam take?

Van Over: Most people who sit for the “F&I Specialist” exam, our most popular certification, finish the test in about an hour and a half. There are always some stragglers who take almost two hours.

AE: What do successful candidates receive?

Van Over: We offer a framed diploma that is really nice. Seriously — it’s nicer than most college diplomas I’ve seen! We also have heavy magnetic lapel pins that we distribute to those who successfully complete the exam when it’s offered at the Agent Summit or Industry Summit. And over the past year, those who took the exam at the Summits got an autographed copy of Jim Ganther’s book, “Compliance for Green Peas (and Old Dogs Who Think They Know It All),” on the way out the door, whether they passed or not.

AE: About that book. Does ACE plan on regularly publishing compliance-related books?

Van Over: Yes, and thank you for bringing that up! Another benefit we wanted to provide to the automotive segment was a source of high-quality books and other resources that support compliance. Jim had a book in the works, so we signed him as our first author. ACE just released its second book in conjunction with the NADA convention in Las Vegas, which I authored: “Automotive Compliance in a Digital World.” Jim has a sequel in the works, “Compliance for Old Dogs (and Green Peas Who Want to Keep Learning),” which we expect to publish later this year. And Randy Henrick has one in the pipeline as well, so we are rapidly building up a solid list.

AE: How much does ACE certification cost?

Van Over: Prices range from $95 for the sales associate certification to $695 for the compliance officer certification. F&I specialist certification costs $495.

AE: How much does recertification cost?

Van Over: Recertification costs 10% of the original certification. So if you earned the sales associate certification, the recertification would cost you $9.50.

AE: Have any major dealer groups adopted ACE certification as their standard?

Van Over: Yes, and more are coming on board every month as news of our value proposition gets out. Although several of our publicly traded dealer group supporters have asked that we not use their names, we can say that the John Elway Group and Phil Long Group in Colorado are on board, as well as the Atlantic Auto Group in New York.

In addition to dealer groups, F&I providers and administrators are getting behind ACE as well. American Financial & Automotive Services, for example, has incorporated ACE certification into the curriculum of their F&I University, and requires all their field force to become ACE-certified. And independent F&I agencies are following suit.

AE: How does ACE fit into an overall compliance strategy?

Van Over: The Consumer Financial Protection Bureau requires the industries it regulates to have a documented compliance management system, or “CMS,” in place. Although the CFPB does not have oversight of franchised automotive retailers like the Federal Trade Commission does, many expect the FTC to follow suit in requiring a CMS before we retire. At gvo3, we started implementing a CMS with each of our clients as part of the client’s overall risk management strategy almost 17 years ago. A critical component of a CMS is to train employees on policies and procedures to ensure compliance with applicable state laws.

It’s important not to confuse ACE — or any other certification program — with a compliance program. A true compliance program includes several key components, and a minimum would demonstrate written policies and procedures, verifiable training on those policies and the laws they address, and an annual audit to confirm its effectiveness. ACE fits in as part of the training component, with the added benefit of the professional designation.

AE: Did ACE develop its own content and delivery software?

Van Over: No, we saw no need to reinvent the wheel. We license both the content and the LMS delivery system from Mosaic Compliance Services. They are far and away the leader in wholesale compliance services, so our respective business models meshed perfectly.

AE: Who came up with the acronym “ACE”?

Van Over: I’d like to take credit for that one, but it was the marketing people at Mosaic who came up with it. The logo was based on the nib of a fountain pen, because F&I personnel love their Montblanc pens! But that looked like an ace of spades, which led to the name Automotive Compliance Education for the entity. That’s what we set out to do, and its acronym — ACE — fit the logo like a glove. Besides, “ACE” has positive connotations that other terms lack. Finally, you’ll note the logo has a little bow tie at the bottom. Draw your own conclusions about who came up with that.

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Agent Reporting for a New Era

Agent Reporting for a New Era

Agents provide a unique and invaluable service to automotive dealers as income development drivers, compliance consultants and training providers. In order to play this vital role, agents need information from disparate sources that paint a picture of sales and profitability at each dealership they service. It starts with reports based on DMS data to understand the highest level KPIs, such as unit count, per vehicle retail and product penetration. There are many solutions in the marketplace that do provide this level of reporting.

But that is only one piece of the puzzle. The agent then has to correlate sales performance of individual sales personnel with menu usage data to identify training opportunities for personnel. They then further need to correlate this sales data with information from product providers such as loss experience and reinsurance cessions to paint a full income and loss portfolio analysis to their dealer customers. Information, therefore, is the lifeblood of the independent agent.

“Agents are looking for every opportunity to show finance managers and general managers how they can improve their own and the dealers’ performance in the F&I office,” says Kumar Kathinokkula, COO of F&I Administration Solutions. “In addition, many agents have developed their own refinements to the analysis and KPIs that provide unique insights into developing F&I income and delivering value to their dealers.

However, gathering this information from DMS systems, menus and the product providers is a logistical challenge. Keeping track of all the different URLs and credentials is only the beginning of the challenge. Most agents find that they need to significantly “massage” the DMS reports to make them consumable and meaningful to dealers. In addition, the agent needs to correlate DMS data with the product providers’ data, which forces the agent to present to dealers using various reports which often show conflicting data and which therefore don’t always add positively to their discussions.

If the way agents and dealers access data can be streamlined and improved, Kathinokkula says, the savings in time and enhanced value of the data will have a profound impact on an agent’s ability to act as an agent of positive change — and therefore the success of their mission, which is the profitability of their dealers. “In fact, it is remarkable how expert and comfortable some agents have become with Excel so that they can deliver their reports in a timely fashion each month,” Kathinokkula notes. “And therein lies the other challenge: Because so much effort is required to adapt the reporting, it is not possible to produce the necessary reports and information as frequently as the agent needs. In many cases, the information is only updated once a month.

“This is extremely restricting to an agency,” he adds, “since each month starts with frantic data manipulation followed by pressurized visits to all key dealerships to discuss the data before it is out of date. Moreover, all this manual transformation of data compromises accuracy. So agents find themselves reacting, and usually reacting late.”

Escaping the Excel Scramble

Depending on their approach and style, an agent may fulfill many roles. But nearly every agent provides, at the very least, a suite of F&I products for dealers and the necessary training and sales support to ensure the greatest success of each dealership’s F&I professionals. Dealers rely on agents to recommend the best products for their stores with the ultimate goal of providing the best possible value for their customers, and the highest profitability opportunity for the dealer.

To be able to help deliver the best performance and profitability, however, agents need to analyze the DMS data as well as the data from each of the F&I product providers their dealers partner with. Kathinokkula believes this presents many challenges in addition to the issue of the month-end “Excel scramble”:

  • Understanding DMS data requires experience and skill, and not all agents have the time or expertise to do the necessary analysis
  • Correlating DMS data with product provider data is extremely challenging and few have been able to do this effectively

Enabling the agent to see all this information in one place would significantly enhance an agent’s ability to support a dealer. “Time spent gathering all this data and correlating it could be better spent on more value-added services,” Kathinokkula says. To that end, he believes agents need:

  • Dynamic reporting that displays data in a fashion that supports an agent’s (often unique) analysis and approach to help with dealer profitability.
  • To deliver targeted intelligence specifically designed with the end consumer in mind — reports for an F&I manager for example would be different to reports for the general manager, since each is looking at performance from a different point of view.
  • The ability to look at more current and real-time analysis on an ongoing basis — not just after month-end — to spread discussions through the month while always discussing the latest performance data.
  • Combined DMS data with a product providers’ data to enable easier, more accurate accounting and profitability analysis

“In short, to really focus on dealer performance and increase dealership profits, agents need to have the accurate, timely data from all information sources in one place so that they can focus on sales performance and training needs and not on Excel management,” Kathinokkula says.

Combining and creating relationships between DMS and product administrator data will improve the value of reporting, he adds, and it will have a ripple effect that will improve the value of conversations with dealers. In addition to reviewing a dealer’s performance as a whole, agents also could talk to the performance of administrators’ products that the dealer is selling.

To truly empower and free up the agent, software solutions need to go well beyond simply providing passive reporting. Rather, agents need an information delivery solution that would be the single source of truth — accurate, complete, easy to read and timely — without the need for massaging to make it relevant, useful, accurate and actionable.

Next-Level F&I Training

With the above criteria met, Kathinokkula says, agents could focus on training — and improve the quantity and quality of indicators that tell them which F&I managers need coaching, and in which areas.

“A well-designed dashboard can be extremely powerful. If, as an agent, your dashboard displays the top 10 and bottom 10 producers, in terms of performance and profitability, what would you do with that today? Which dealers would you call on next?” he asks. “Raw information in your DMS and administrator reports cannot give you a course of action — but targeted analysis should produce actionable intelligence.”

Since different dealers and different personnel have differing needs, such actionable intelligence should be targeted. So don’t just show the F&I manager what their penetration rates are, but show them where the opportunities were missed. Don’t just show the menu presentation rates, but directly present a menu training link with relevant content to the F&I manager who has low penetration rates and a low menu presentation rate.

Taken a step further, improved reporting could feed a predictive analytics model that could help F&I managers get a better understanding of the best products to sell in certain circumstances.

In time, predictive analytics could help agents forecast which products or product types a dealership should consider adding. A more immediate benefit could be an enhanced ability to match customers and vehicles to the appropriate term and coverage of a vehicle service contract.

“If the customer has purchased a Jeep Cherokee with 30,000 miles on the odometer, predictive analytics could help you determine the best VSC for their budget,” Kathinokkula says. “But that is not possible unless all the necessary data exists in one place.”

Ultimately, Kathinokkula predicts, improved reporting will improve agents’ ability to support their dealer clients. It should offer more layers of insight and help customize training to the needs and performance of individual F&I managers.

“Training should be proactive, and better reporting will make that possible,” Kathinokkula says. “If you are an agent, and you are training 30 different dealers, you must address 30 different sets of needs. Without the ability to tailor KPIs to the specific needs of each dealership and producer, you are limited to reactive training, and it can take weeks or months to see and understand the results.”

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An Interview with Rich Moore

An Interview with Rich Moore

After more than 30 years in the automotive industry, Protective Asset Protection’s Rich Moore has reached the upper echelon of F&I trainers. He maintains a full training schedule while contributing articles to industry publications and speaking at events such as Industry Summit, Agent Summit and, most recently, Compliance Summit in his native Texas. AE caught up with Moore to learn how he broke into the industry and what the future holds.

How did you get your start in the auto industry and how did you become a trainer?

I got started in the industry in 1984 at Rod East Volkswagen in San Antonio, Texas, which really had nothing to do with my background and education in professional photography. I had a brother-in-law who was a wholesaler, and he suggested that car sales would be a good place for me. I was reasonably fresh out of the Navy, and it seemed like a good challenge.

I found I was a good salesperson but a better sales manager. I really liked teaching and seeing my team succeed with the techniques on which they had been trained. Moving into training was a natural step for me since my last duty station in the Navy had been as a senior trainer in the Navy Leadership and Development Program.

What areas in F&I do you focus on with your training?

Our courses pretty much run the gamut from why F&I is important to the dealership to how to build a great relationship with sales and, most importantly, the F&I sales process. In fact, we created an accelerated course based on input from the field that is nothing but two-and-a-half days of interview, menu, objection handling and closing.

Why should an agent call you for a training assignment?

Our team trainers are still active in the dealerships they service and will sub for vacationing F&I managers. That means they are current on what is really happening in dealerships across the nation. So when we train for an agent or dealership, they get real-world tools and techniques, not theories.

What are the top three messages you try to give at each of your training sessions?

First and foremost for me is to practice, drill and rehearse! F&I managers and salespeople in general tend to practice on their customers. That’s too late. Imagine if any major sports team waited until the game started to practice! It would be a disaster.

Second, learn to tell great stories — real ones — about the value of your products and how your customers have benefited in the past. People can relate to real-world situations that have happened to others, and people buy on emotions and justify with logic.

Third, don’t be greedy. Listen to your customers. If you present what will benefit them, you’ll have a much better chance of selling at least one product with every deal. Over the long run, when added to the sales from the folks who buy everything, that extra product per deal produces more sales than you would think. It’s a much better way to make your numbers than being greedy and trying to force a home run from every customer.

What changes in the industry do you foresee that will impact your training the most over the next few years?

Not so much changes in the industry as changes in how our customers will interact with our industry. Millennials and the generation after them, now being tagged “iGen,” won’t take time or have the tolerance for our traditional sales processes. They want it now and on their devices. That means that, as trainers, we need to stay on top of customers’ habits so we can train F&I managers to be responsive rather than reactive.

The other change I see on the horizon is the need for F&I managers to move away from relying on making money on rate and instead learning how to build irresistible value in their products. If our customers see great value first, price becomes less of an objection.

Tell us about yourself and the kind of activities, hobbies, interests you pursue outside of training.

As I mentioned earlier, photography has always been and still is a passion. Internet marketing — specifically, using live, interactive webcasting — is a major interest now. I think it’s the future of online marketing. And we can’t forget getting on the Harley with my wife and taking a long weekend ride somewhere.

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An Interview with John Pappanastos

An Interview with John Pappanastos

When he joined EFG Companies’ board of directors in 2006, John Pappanastos found a willing partner in his quest to drive innovation in an industry that rewards hard work and creative thinking. Today, as the company’s chief executive, he continues that mission with the help of his coworkers and partners — including a dedicated group of agents.

Tell me a little bit about your company and its place in the industry.

EFG is a 40-year-old national innovator and administrator of F&I products. Our portfolio ranges from repair and maintenance to debt protection, aftermarket, security and traffic-driving programs, with more than 2,200 accounts selling our products last month.

Our most powerful asset is EFG’s engagement model that requires uniquely qualified and motivated professionals. I truly believe it is unmatched in terms of sales and servicing support in the field, agile product innovation and customization, and a suite of technology capabilities that improve agents’ productivity and ability to service their clients.

Our professionals literally operate as an extension of our agents’ teams to target, profile and win new business, and we offer a highly collaborative contract administration model that places our agents in a position of control and importance with their clients.

We thrive on measurement, and we compete to win.

Are there any recent or future developments within your company that you would like to tell us about?

I’m especially proud of the fact that EFG has received nine national awards in 12 months, including being named to the Dallas Top 100 most recently. It is one thing for a company to talk about itself. It is entirely another when an industry recognizes them for excellence and vision. The Top 100 recognition, in particular, is meaningful because it indicates that our people understand their individual roles in creating a customer engagement model that is incredibly difficult to replicate. We operate in a “culture of initiative” that focuses entirely on the interests of our partners and their customers in a values-driven manner.

I’m also very proud of our product innovation, which is actually led by a council of our top agents who meet twice a year to discuss industry trends, dealer challenges, and building profitable businesses while keeping an eye on the horizon.

In terms of products, we offer some of the most effective powertrain contracts in the market. We recently launched the market’s first mileage-only (i.e., no monthly term) vehicle service contract. In terms of technological innovation, we’ve built highly dynamic client portals that provide our partners with access to contract production by account and allow them to review, reconcile and pay bills, to cancel contracts or simply receive a cancelation quote, to review underwriting results and reinsurance cession statements, and to review claims status 24 hours a day, 365 days a year.

How did you (personally) get started? What caused you to choose this career path?

I worked for two and a half decades in the telecom industry prior to joining EFG’s board of directors in 2006. I was asked to join the board to provide strategic and financial planning based on the changing dynamic of the retail automotive industry — and the need for dealers to increase focus and investment in business planning and analytics. After working closely with EFG’s executive team, clients and business partners for a year, I accepted the position of president and CEO.

In EFG, I found a values-driven company bringing expertise to a function within the dealership that generates about 40% of the average dealership’s gross profit. It was a company with a proven operating platform and a rich heritage of customer service. All we had to do to create something very special was invest in our people and instill process execution discipline.

What are your outside interests / what do you like to do on your days off? What activities / sports are you passionate about?

Although all of my five children are grown and out of the house, my kids remain the highest priority in my personal life. I also enjoy weightlifting and cardio workouts, personal investing, skiing and traveling. And I love football, especially Crimson Tide football.

What are the biggest issues you see facing the industry today and in the future?

Most people are concerned about continued dealership consolidation, about the potential demise of the franchise model, about increasing regulatory oversight that is disconnected from market demand, and about the challenges associated with employing and selling to Millennials.

While all of these issues are very real, I believe that the biggest challenge facing today’s auto dealer relates to building customer loyalty. While this is not a new problem, it has clearly been exacerbated by the proliferation of the Internet and the growth of the Millennial segment.

The fact is that customers do business with companies that they trust, with companies that share similar values, with companies that transact business the way they want to transact. At a minimum, the industry’s employee and customer engagement models must become more flexible and more transparent (or at least more respectful and direct). We have to learn to engage with employees and customers in the way they want to be engaged with. And the key will lie in building the right team and managing a disciplined model to build relationships with customers over the life of their vehicle ownership.

The industry is in serious need of new employee talent. The best dealers spend an inordinate amount of time identifying, hiring, developing and retaining personnel. They avoid industry “retreads” and instead focus their energy on bringing in young talent that they can develop organically into future leadership. By doing so, they create a team with shared values, especially with respect to integrity, work ethic and a customer-first mindset.

What advice would you give to someone new to this industry?

I think the auto industry provides a great place to make a living and build personal wealth. Few industries reward entrepreneurial initiative and hard work as well as our industry, and the career path to grow in terms of personal responsibility and compensation is almost codified. As employees grow and mature, they learn to manage all elements of a P&L, from employees to suppliers to inventory to customers. Few industries offer such an opportunity so quickly.

So, my advice would be fourfold: Believe in yourself, be willing to pay your dues, embrace technology and develop a thirst for learning.

Is there anything else you would like to add?

I think few business people actually take the time to calculate what an underperforming partner is costing them. While they may be able to quantify the amount of money they are literally paying their partner for service, they fail to quantify the true costs associated with the partner’s underperformance in terms of market share and margin per retail unit sold, and also in terms of employee development and morale.

Long-term relationships with people you like are wonderful things and often merit a premium price. However, I would encourage business leaders to fully understand the premium being paid as a result of long-term relationships. Strategic partners are those that engage as if they have an ownership interest in your business to help you grow your business and execute at your highest level.

 

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Meet the Trainer: Rick McCormick

Meet the Trainer: Rick McCormick

From his days as a full-time, ordained minister to a second career as one of the nation’s leading F&I trainers, Rick McCormick has succeeded by always doing “the right thing the right way.” Agent Entrepreneur sat down with McCormick to learn more about his life and career and the moment he fell in love with the automotive industry.

How did you get your start in the auto industry and why did you specialize as a trainer?

I came from a diverse background and entered the auto industry almost 16 years ago. I served as an ordained minister full-time for 20 years, and for most of those years, I worked another “full-time” job to afford to be able to do that! I always gravitated to selling and/or training in each position. After multiple family moves, we determined in order to stay in one place long-term and I would serve in ministry part time and then find stable employment.

So I walked into a car dealership to find a temporary position. I fell in love with the challenge of helping customers. Then I was provided the opportunity to move into the F&I office. This story resonates with so many others I have met around the country. It’s easy to get into this business. And once you do, you fall in love with helping people and knowing the more you do, the more money you make! So I have been on this “temporary” job for 16 years now.

After spending five years in the F&I office, the only thing I could think of that would be more enjoyable would be helping others develop their skills and being part of their success. After a timely meeting with Ron Reahard, I knew not only that training was a place I wanted to serve but the core principles of his perspective on this business were aligned with mine. Simply put, always do the right thing the right way. I have had the privilege of working across the country with F&I managers to assist them in growing their skills and abilities, and I have seen many grow to places of influence and income levels they never thought possible. Nothing could be more fun than that!

What areas in F&I do you focus on with your training?

The focus is on results and growth. In the results arena, all a dealer has to do is look at the financial statement each month to see if the training is having an effect. However, placing the emphasis on results alone is not conducive to a long-term growth trend. The month-to-month activities of an F&I manager putting forth consistent efforts to increase skill sets and abilities will determine the results.

Focusing our efforts on their growth as a professional increases their product knowledge and confidence levels. Those are the roots that deliver a flourishing professional who offers a customer focused and comfortable process, making it easy for customers to buy the products available. The F&I process must add value to the customer’s purchase experience. It should be based on a needs-based approach that positions the F&I manager as a trusted advisor who provides consistent results. We work extensively to build that kind of process and that kind of F&I manager.

Why should an agent call you for a training assignment?

We become a trusted partner in the agent’s success. We are uniquely positioned in the industry because we don’t sell any F&I products. So we have the same agenda as our clients: to help F&I managers help more customers. This has allowed Reahard & Associates to work with agents, finance companies, product vendors, vehicle manufacturers, dealer associations and individual dealers, as well as some of the largest dealer groups in the country. We provide cutting-edge techniques and a growth-based effort that will make each F&I professional more effective.

What are the top three messages you try to give at each of your training sessions?

First, we challenge F&I professionals to work on developing and improving their individual skills. Great F&I professionals consistently look for areas where they can improve. You never graduate from the school of growth. My goal is to ensure that every training session is a growth session.

Second, we work to ensure a consistent process is used that builds trust with every customer. Techniques that don’t build trust must be altered. The level of profit and customer satisfaction rise and fall on the level of trust built with each customer.

Finally, each F&I professional should be a team builder. F&I managers are in a strategic position and have been entrusted with the opportunity to interact with almost every part of the dealership experience. We work on their interaction with other departments and how to positively impact the overall process in the store. Great F&I managers help build great teams!

What changes in the industry do you foresee that will impact your training the most over the next few years?

A huge shift will come from more of the selling process moving to an online format. We must embrace the technology that can provide a quicker and more efficient process. Embracing technology necessitates we engage the customer online with F&I information concerning financing, products, and pricing. We are developing tools to enable this transition as we speak.

However, the products must still be sold and the customer’s need for them must still be uncovered. As a result, the focus will continue to be helping the customer get the products they need and the financing that is most beneficial for them. Customers have always driven change in our methods. We will lead F&I managers to embrace the change and continue growing their skills.

Tell us about yourself and the kind of activities, hobbies, interests you pursue outside of training.

My free time is spent with my family. From the patient wife who embraces my frequent travel to pursue my passion to the five grandchildren who challenge me for more ways to have fun with them. Whatever interests them, interests me! My most enduring memories have come from time with them. I also enjoy reading autobiographies and personal growth books. And if the Atlanta Braves are televised or the Tennessee Volunteers football team is winning, I can probably be found in front of the big screen watching.

This industry has been good to me and provides great opportunities daily. And when I come home, I have a great family to spend time with. What else could a man ask for? Here’s to a great finish to the year!

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An Interview with Mike Melby

An Interview with Mike Melby

Mike Melby wears his passion for the vehicle service contract segment on his sleeve. Read on to learn how Melby strives to fulfill his company’s mission to protect car buyers and be a true partner to agents and dealers.

Tell me a little bit about your company and its place in the industry.

Here at GWC, we view ourselves as the best-in-class vehicle service contract provider for used cars in the automotive industry. We’ve been in business for 20 years, paid over $350 million in claims and helped protect more than 1.5 million drivers during that time. We’re A+ rated by the BBB and all our products are backed by American Bankers Insurance Company, an Assurant Solutions company, which is rated A “Excellent” by AM Best.

I tell you all this because these numbers and accolades are the results of a simple mission to help dealers sell more cars by giving car shoppers the confidence to become car buyers. We firmly believe that, when a customer has a great experience with GWC, they improve the dealer’s CSI, generate strong referrals and become repeat buyers for dealers — all of which equates to added vehicle service contract business for agents. And while we do maintain an employee-based sales force, we remain respectful of the businesses our agents operate and have a history of safely and successfully coexisting in markets across the country.

How do we do it? Simply put, it’s the only thing we do. We’re not like some F&I product or warranty providers that dabble in several different industries with a wide array of products. At GWC, we specialize only in the service contract space and only on used vehicles. It’s a conscious decision to focus on this niche, and one that has benefited us and our dealer and agent partners greatly.

Specifically for our agents, it starts with personalized attention. I am hands-on with every one of our agents to make sure their needs are addressed in a timely and effective manner. It’s important to note, too, that we understand the needs of agents vary from business to business. We stay flexible to ensure we’re providing solutions tailored to each agent’s business.

Are there any recent or future developments within your company that you would like to tell us about?

In today’s marketplace, it’s all about service and technology. We’re constantly looking at ways to improve the way we work with agents, dealers and drivers to make sure we’re creating a best-in-class experience. In terms of service, we employ ASE-certified claims adjusters who have decades of experience in keeping drivers on the road.

When it comes to technology, the industry is quickly moving to more and more paperwork being done electronically. Because 60% of service contract business is now filed electronically, we are working with DMS providers all over the country to integrate our products onto their systems, and we’ve even created our own econtracting tool in the past year: the Dealer Portal.

We’ve been busy with even more technology offerings in 2015 too. We just introduced GWC Virtual Training — a free online, interactive training tool with content for every employee in a dealership — as well Covideo, which integrates video into a customized email template to help streamline walkarounds, lead conversion and post-sale follow-up. GWC is sharing the cost of Covideo with dealers and agents to offer an exclusive rate unavailable anywhere else.

How did you (personally) get started? What caused you to choose this career path?

I’ve known nothing but the auto industry throughout my entire career. I’ve spent almost 30 years in the automotive industry. I started at GMAC, working throughout the company in sales, credit and operations. After that, I moved on to AutoNation, where I was the director of F&I product development. Working for some of the biggest players in the automotive industry was the perfect way for me to blend my passion for business with what’s now a deeply rooted connection to the auto industry.

What are your outside interests / what do you like to do on your days off? What activities/sports are you passionate about?

I work a lot and travel often, but when I’m home, family is first. I try to spend as much time with my wife and kids as possible. Come wintertime, I enjoy lacing up the skates in a local ice hockey league. In the summer, I try to get on the golf course when I can fit in the time for 18 holes — which is far less often than when I lived in South Florida!

What are the biggest issues you see facing the industry today and in the future?

For VSC providers, it’s always a matter of protecting our reputation. Unfortunately, the VSC industry is an easy one to break into and a difficult one in which to sustain success. One thing we see contribute to this far too often is the mispricing of contracts. At GWC, we have 20 years of underwriting data to draw from so we know exactly how each make and model will perform, what will break down and when. This allows us to price the risk on each vehicle accordingly.

How does this benefit agents and their dealers? First of all, companies without such a history can sometimes charge prices that are insufficient to cover the required reserves. While unsustainably low prices may be appealing to a dealer in the short term, a series of much less pleasing events usually follow: First comes frequent and substantial price increases to correct an under-reserved portfolio, then comes stricter claims approvals. And once all these belt-tightening measures are exhausted, those companies that seemed like a good low-price alternative at the beginning exit the service contract space altogether.

With GWC, those fears don’t exist. Our rock-solid reputation is one that will help an agent or dealer maintain theirs. We have a long history of doing something simple: keeping our promises. It sounds basic, but we pay claims. Aside from that, we invest in talent, training and technology to make sure we’re delivering the best-in-class experience we commit to providing.

By maintaining these principles as a priority throughout our organization, it’s our hope to attract likeminded agents who are looking to join us.

What advice would you give to someone new to this industry?

Simply put, do things the right way. Sometimes we see companies and individuals in this industry looking to get rich overnight. But if you do things the right way and catch on with a company with strong leadership, you can be part of something special that helps consumers hit the road worry-free and businesses continually improve upon themselves.

Is there anything else you would like to add?

For me personally, I have such a strong passion for GWC Warranty. It’s what gets me out of bed each morning. I’m here each day to make this a great company. I would encourage agents and dealers to give us a look to see how this same passion is shared by every GWC employee. Everyone at GWC takes pride in helping our partners succeed, and it’s something that is clearly evident from your first conversation with us.

If I could give any advice to agents and dealers, I would tell them it’s imperative they do their due diligence before selecting a partner. Not all VSC providers are created equally. If you make a decision solely based on price, the consequences could be disastrous. Agents and dealers work too hard to put their reputations and customer satisfaction at risk by partnering with the wrong VSC provider.

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