Author Archives | Ron

Menu Selling the Electronic Way

Menu Selling the Electronic Way

There are a variety of software programs and software providers, in the market, that offer profit-making solutions for Agents to help their dealer-clients manage their business successfully. But what is the best menu systems comprised of, how can an Agent ensure that his or her dealer-client is going to use the program?

Around 2002, the concept called Menu Selling caught my attention. It was clear to me, from my F&I Sales and Compliance training experience, that the concept of closing F&I products on a menu could only be effectively done with the ability to change and adjust for customer preferences and choices on the fly. It had to be electronic.

Yes, menu selling is gaining traction in dealerships but what should an agent or dealer look for “most” in an electronic solution. Simplicity in design should be something that every software designer should keep in mind because the normal user does not have the technical background or know-how to act as a programmer. Simplicity in design requires that the user can easily function within the software, and that the software will give the user the ability to capitalize on profit opportunities

It’s important that the F&I manager can promote their products in the most positive light. Having also been a general agent myself, it has provided me with the insight of what an agent really looks for in a product and with the knowledge of what the dealers are looking for. Agents are very busy, and with business being so highly competitive, they need software that they and their dealer-clients can count on. They need products to do what they are supposed to do, and from a company that is responsive to their needs, as well as those of their dealers.

Where have menus been and where are they going?

It’s very interesting how far menu programs have come. The first menu systems were excel programs. Along came the internet. The internet made the menu business possible as a third-party web-based solution. Then .net solutions enabled menu to be managed at a centralized location and be distributed anywhere in the world. Once web solutions were available, integration to the Dealer Management Systems (DMS) had to happen. The integration to the DMS was at first hostile in nature and that didn’t allow for a seamless process. Today most DMSs are making it possible to integrate much easier. Integration will continue to become friendlier in the near future. Friendly integration will give menu companies the ability to focus on making their sales solution more efficient and flexible.

The next big challenge and greatest area of growth for technology in our industry is belonging to the concept of E-rating and E-Contracting. It may not have been so clear in prior years, but this is an area in which Menus can play a very important role. This is because menus are becoming the hub between the DMS and vendor when it comes to rating and processing product contracts. As rating becomes more efficient, menus will make it easier to sell products and process them. Then everyone wins! Sure every menu company says they E-rate and E-Contract but why isn’t everyone using it? They aren’t, because for the most part it isn’t very efficient to rate and enroll all of the F&I products. Stay tuned, I think we are going to see significant improvements.

Reporting Tools are a Great Enhancement to Your Menu

Reporting tools are another product that is very important to agents and dealers, and they are often sold hand-in-hand with menu software. Reports evaluate a dealer’s front and back-end profits and do so in a unique way. Independent agents should be the dealers’ primary consultant when it comes to F&I profitability. Therefore, the agent needs to know daily where the dealer’s profit picture stands. When they walk in the dealership they should not have to ask how many F&I products have been sold. They should already know. Web-based F&I reports give the agent the ability to check their iPad, via 4G, before they walk in the door, so they have this information.

The best reporting software package designs will allow the users the ability to create a page of widgets that include ranking charts, reports and other personal controls. It is also important for an agent to provide their dealers with customized reports. Anyone can add up numbers and compare data, but what makes a reporting company different is their ability to see the data in a way that wasn’t quite evident. The focus should be on drawing comparisons from all the data, so an agent may deliver something to their dealer that sets them aside from their competitors yet gives our dealers the information they need to motivate their employees.

What’s the Agent’s Role?

Can an agent just have Menu and Reporting installed in a dealership and then walk away? Not if they want to get the most out of it. The agent’s primary goal to begin with is to get dealership personnel comfortable and confident enough to use the software on a consistent basis.

What can the agent do to help the dealer in this process? After a dealership has incorporated a menu, reporting and possibly other tools into its F&I process, there are a few additional ways an agent can stay involved so that the dealer is successful in learning and using the software programs.

The first thing they can do is make sure the tools are installed and kicked off properly. That starts with preparation. If necessary, make sure the reporting company gets the sales and F&I logs so it’s certain that all fields are mapped over correctly. The important thing is for the agent to stay active in the process. They should expect the menu/reporting company to do the heavy lifting, but if the agent is not involved, the dealer doesn’t always fully comply with what’s necessary for accurate menus and reports.

The agent needs to make sure the dealer starts using the tools from the very beginning. If the company has the right reporting in place, such as a menu usage report, it’s easy for the agent to stay on top of it from their office. If they aren’t using the products, find out why and fix the problem.

It’s very important that the agent has a company working with them as a software partner in their accounts. They need to trust that they will always do what’s in the agent’s best interest and be highly responsible to their agency and dealer’s needs. If the company they are doing menu/reporting with is uninterested or doesn’t answer the phone or return calls, its time to get a new partner.

Posted in Product & Technology0 Comments

Web-Based Reporting: An Excellent Goal Setting Tool

Web-Based Reporting: An Excellent Goal Setting Tool

If a sharpshooter is given the task of hitting a target from 50 feet away, how many times would he or she hit the bull’s eye? Now take the same sharpshooter and put a blindfold on them, and have them turn around in a circle. How many times would he or she hit the target with the blind fold on? My point is, you can’t hit a target you don’t see. If an agent doesn’t regularly set goals for their dealers and then hold them accountable to the goals, then it is just like managing that relationship with a blindfold on.

The independent agent should set monthly goals for the dealer. They should also install the tools to regularly access and hold the dealer accountable to the results. The goals should be clearly defined. A time frame should be set to achieve these goals, and they should be measurable. That means the goals must be statistically proven. They should also be documented and have a plan of action. Finally, they need to have the tools in place so everyone involved can quickly track the results, and compare whether what has been accomplished measures up to the goal that was set.

The tool that many agents use to accomplish this is a web-based reporting tool. A web-based Dealer Reporting tool can extract data daily, or in some cases real time, and provides the Agent with a tool to supply the dealer with that monitors on a daily basis the progress toward accomplishing the monthly goals.

What are the Focal points of Dealer Reporting? (ACT): Accountability, Competition, Tracking

Accountability: Dealer personnel need to be held accountable to the goals that are set. A dealer typically sets goals for the personnel to reach on a monthly basis, but by the time the end of the month rolls around it is too late to make the adjustments to ensure the goals are met.

Web-based Dealer Reporting gives the Dealer and Agent the tool to make sure the dealer personnel are held accountable daily, rather than monthly, to the goals that are set. This way, action may be taken to correct any deficiencies when they occur rather than when it is too late. That corrective action may be in the form of additional training or consulting with the dealership personnel to get them on track.

Competition: Everything in business starts with a sale. The Front end of a dealership is all about sales, beginning with the vehicle that is sold and ending with the aftermarket items that are presented to the customer. A good sales organization is one that is highly competitive. We want the personnel to strive to be the best at what they do. We want them to aim to outperform their peer group.

A Dealer reporting tools allow the dealership personnel to regularly be ranked against their counterparts in the dealership. This creates the daily competition necessary to maximize the profitability at the dealership in all areas. Sales personnel can be ranked against others, as it relates to front end sales profit or back end F&I profit. Sales Managers and F&I Managers can also be compared to promote competition and increase profitability.

Tracking: Pay Plans are an excellent way to ensure that the dealership personnel are maximizing profit opportunities and selling the products that are in the best interest of the company. This way, a dealer and agent can control the types of products that the F&I people or sales people focus on. Tracking the result regularly can easily be done with web-based Dealer reporting. The result is keeping the F&I person or Sales personnel on track during the month to make it more likely that they will hit the goals that are set.

Types of Reports

The Dealer/Agent needs a library of Reports to choose from. The reports should provide snapshots of a range of profit opportunities in the dealership. For example, report snapshots may address the dealers financing sources, the aftermarket profits options, and their sales and F&I profits.

Reports should also highlight unit sales and income totals, averages, and penetrations. Here are some examples of some of the types of Reports in a dealer’s customer reporting library:

Lender Analysis Report: This report should evaluate the totals that a lender is advancing, the income that the dealer is paid directly from the lender, and the income that is typically generated from the contracts that are approved by that lender. Web-based reporting allows these totals to be displayed and sorted by category or sub-category.

  • Advance Analysis: Number of Contracts, Volume of Contracts, Average Contract written, and the percentage advanced (amount financed / sales price)
  • Reserve Analysis: Average Reserve, Term, and Rate
  • Profit Analysis: Gross profit, Sales Profit, F&I profit

F&I Manager Column Comparison Report: This report may highlight the following: Dollars per Retail unit, Cash units, Finance units, and Lease units. It also displays Units sold, Products sold, Penetrations, Income, and Averages.

Menu Usage Report: This type of report evaluates when an F&I Manager is using a menu or disclosure, and when they aren’t. It will tally the percentage of menus and disclosures printed, and the dollars per retail unit earned with and without a Menu. This holds the Manager accountable to using the menu and shows the dealer how much money they are losing when one is not used during the sale.

F&I Analyzer: This is a traditional F&I report that breaks out all F&I Income by New, Used, and Total. The report will also include product penetrations, and product profit averages by individual, dealership, or group.

Salesperson or Sales Manager Recap report: This report should breakout Gross profit earned on the deal including sales price, invoice or amount that the dealership has the unit in inventory for, trade value and actual cash value of trade. This should be just one of several that evaluate the Front End or sales profit.

Advantages to Web-Based Reporting

The internet has brought numerous technology efficiencies to the automotive business. Web-based reporting is one of those services that wouldn’t be possible if it were not for the power of the internet. Trying to share reporting information wasn’t practical when it was stored on individual computer hard drives.

Web-based Dealer reporting allows for a central place to store, evaluate, and share the data. This way the report can be accessed anywhere that a user has internet access. The software provider can store and access data from numerous dealers and then update and share to other dealers or agents from a central point. There is also flexibility of generating and saving the output. It can be generated as HTML, Word, Excel, or by PDF. This allows the user flexibility in how they print and use the data. Saving the information in excel, for example, allows the user the ability to form and shape the reporting data.

It is customary in the automotive industry for users to expect a simple PDF that they don’t personally have to adjust and align the report. That is usually easily done by the software provider, but sometimes it’s a little tricky since the report size can vary based on the size of the dealer group and number of products they display.

The ability to choose input variables, time periods, data sorting criteria, and output variables adds to the flexibility of Web-based dealer reporting. The user can select exactly how they want to filter the data. Whether it be by Group, Dealer, or Manager, time period, deal type, sale type, vehicle type, retail type, or product type.

Agent/Dealer involvement in ensuring data is correct

Custom reporting is not something that agents and dealers can have turned on and just walk away from without having some involvement in keeping the information current. Things change from month to month that can affect the report results. New users may be added, or new products might be added.

Of course, an agent or dealer should be able to count on the mapping process to populate to the correct field if the information doesn’t change, but there are certain items that only the dealer or user will know with certainty, as to where that piece of information should be mapped to. For example, if there is an aftermarket product added, only the Dealership will know where that product should go, whether it is a front end or back end profit item, and whether it is taxed.

Dealer reporting has come a long way with the institution of Web-based reporting. It has allowed the agent the ability to monitor the progress of their stores to create accountability, competition and tracking. An agent/dealer should expect accurate information from their provider, but not without some effort on the agent’s part.

There is much more to be gained from this tool, for the agency, as providers enhance their reporting application. The future of this product will bring better use of email, mobile, and custom applications. It will give the agent that embraces the tool consistent access to their dealers results, comparisons and analysis.

Posted in Product & Technology0 Comments

How an Agent Can be a Serious Adviser to a Dealer and Not Just a Product Sales Person

How an Agent Can be a Serious Adviser to a Dealer and Not Just a Product Sales Person

If I was starting up an automobile dealership today and I could only afford to hire one superstar Manager, I would select the F&I Manager as that superstar. You could make an argument for the General Manager, Sales Manager, Service Manager, and Office Manager being the superstar selection but I would select the F&I Manager hands down. There are a few reasons for this.

  • First, 80 percent of customers are either financing or leasing their automobile, and getting bank approval many times is the difference between selling the vehicle or not selling it. The Finance Manager is the key person in ensuring that this happens.
  • Second, the Finance and Insurance department are key to the Sales and F&I Process. The Finance person is integral to the management of the payment on the sales floor and the transition from Sales to Finance.
  • Third, the Finance person has close ties with the Service Department through the sale of Service Contracts as well as with the office by ensuring the deals are funded.

I like to call the F&I Department the hub of the dealership. He or she touches every department of the dealership and can affect the profitability of each. The independent agent is many times the dealer’s key consultant in order to ensure the Finance Department is profitable. Their knowledge of how the Finance Department interrelates to the other areas of the dealership is crucial to them consulting the dealer and maintaining an active role within the dealership. Simply put, an independent agent needs to be more than a product sales person – he needs to be a serious advisor to the dealer.

So how can good agents assist to improve profitability in their dealership? The Sales meeting is probably the best opportunity that an agent has to gain maximum exposure in a dealership. It is a highly leveraged opportunity to train the F&I and sales department on product benefits and procedures that the agency provides them with. It is also the time to describe processes that will make the sales and F&I departments more successful.

I recommend that all agency sales people should perfect their skills in doing effective sales meetings. It would serve them well if they could make a minimum commitment of two sales meetings per month. That means 24 times a year your agency can have maximum exposure in your accounts. A 30-minute motivational/informational meeting makes you different than other agents who only focus on pushing the F&I manager to sell their products. The approach of just hounding the finance person to sell more of their products does nothing but turn the F&I person against the agent.

Sales meetings should focus on topics that perfect the sales and F&I process. It’s okay to mix in your products as well during your presentation, but you don’t want to come off as a “what are you doing for me” sales person.

In preparation for a sales meeting, always ask yourself the following questions:

  1. What do I want my audience to know?
  2. What do I want my audience to do?
  3. What do I want my audience to feel?

The answers to these questions are the building blocks to getting results from your meeting. You want the audience to have the information they need to be successful in accomplishing the subject matter, taking action to get results, and feeling that they are doing the right thing for the dealership and the customer.

Some excellent sales meeting topics include:

  • Why is the dealership the best place to finance an automobile? Discuss the reasons that it’s in the customer’s best interest to finance or lease at the dealership.
  • F&I Product Sales Presentation: Show them a typical customer pitch for Service Contracts, GAP, Tire and Wheel. You can take away the unknown of what is said to the sales staff’s customers if you pitch the product to them the way it is the customer.
  • What’s the proper turnover process of the customer from the sales department to the F&I office to ensure maximum sales and F&I profits as well as customer satisfaction?
  • How do you effectively manage the customer’s payment options to sell more vehicles and increase profit?

Payment Management Sales Meeting
When the salesperson discusses the payment options with the customer, there is an impact on the front-end profits, back-end profits, and customer satisfaction. How and when the payment is served to the customer needs to be clearly defined to the entire sales department. Therefore, when an independent agent conducts a sales meeting on payment management, they can create a great deal of credibility with the dealer, as well as, increase the agencies product sales at the dealership. So how do you approach this meeting with the sales staff?

I often hear sales managers say, “My job is not to sell F&I, it is to sell cars.” They further point out that in order to sell cars the customer needs a payment to buy an automobile. My answer to this is yes they do need a payment, but they don’t necessarily need an exact payment. Since 70 to 80 percent of vehicle purchasers will finance or lease their automobile, I believe that 70 to 80 percent of customers are payment buyers. They are not though exact-payment buyers, we make them that when they are actually budget-buyers. A customer does not come into the showroom floor with a specific payment in mind – they have a budget in mind or a maximum they can afford.

Some key components of this sales meeting are:

  • Describe how the Back End, Front End, and CSI are affected by quoting exact payments. Yes, the finance and insurance profits are typically affected first when a customer is quoted an exact payment, but sales gross and CSI follow. Why would CSI be affected? When a customer is quoted an exact payment using an A-tier, later to find out that they are a C- or D-tier, not only does their payment go up, but now the finance person needs to share with them that they are C-or D-tier. No one likes to be labeled as such, even if they knew that to be the case in the first place.
  • Payment-Buyers vs. Budget-Buyers: It’s important to distinguish the difference between, needing a payment to buy a car, since 70 to 80 percent of buyers are financing or leasing their automobile, and having a budget or range that they need to stay in.
  • Who Calculates vs. Serves: Does it really matter if it’s the Sales Manager, F&I Manager, or the Sales person calculating the payment? I think most of us would agree that it is best if a manager calculates the payment. And, it really doesn’t matter who calculates the payment, just how it is calculated. The most important key here is how the payment is served to the customer and it is important the sales person does that. Here is an example of how this is presented: “Mr. and Mrs. Customer, I think the vehicle that you have chosen fits you very well, and I think you’ll be very happy with it. I’m going to get some pricing and payment options from my Sales Manager to help you make your decision. I’d like you to know, that when I bring you a payment it will be based on an average interest rate. That is an initial estimate to provide you until we have your credit information. The reason that is, is that the lenders have a tiered system of credit. They rate customer’s credit A, B, C, or D. Since we don’t know what your credit score is, or what tier you will fall into, we’ll quote payments based on an average interest rate, that way you can choose a payment that’s within your budget. Once you decide on your purchase and we have your credit information we will be able to get you exact payment based on what you qualify for.” If the customer says they have “A” credit, and require the payment prior to making their purchase the sales person should request a credit application. The credit score can then be verified and a payment can be quoted accordingly.
  • Qualification Process: During the buying process it’s important to evaluate the customer’s credit and payment needs.

Some key questions are:

  1. Do you intend to finance or pay cash?
  2. Where did you finance your last car? Who was the Leinholder? This is an indication of what tier they are likely to fall in, based on, if the leinholder was a prime or sub-prime lender.
  3. Do you want us to take care of your financing?
  4. Would you categorize your credit as A, B, C, or D? If they say anything but “A” tier, request a credit application so you can get them pre-approved.

Electronic Payment Management

Mike Jackson, the President and CEO of Auto Nation, recently said they have a 5-7 year project in place whose goal is to have everyday low prices, limited negotiations, and third-party validations for customers. He says, “The customer, who today has more choices and ever-growing reams of internet data are demanding the change.” In addition to Auto Nation, Sonic, Asbury, and Lithia are also in varying stages of experimenting with limited negotiation or value pricing models.

Transparency is what customers want and is the direction of payment management in automobile dealerships. The good news is that a transparent sales and F&I sales system not only translates to a happier customer, but results in more sales and higher profits.

An electronic pricing and payment Desking system is an excellent way of producing that transparency to the customer. It works very similar to an electronic menu system, that we use to present F&I products to give the customer options to choose from in order to make their buying decision. It is a transparent and comfortable alternative close, and gives the customer choices of lease, finance, and cash options in order to take them smoothly through the close, or buying decision. Presenting them a variety of finance, lease and cash options empowers the sales person and the customer with the information they need to evaluate the purchase together. The result is a happier customer, more vehicle sales, and higher sales and F&I profits.

Posted in Industry0 Comments

Three Keys to an Agent’s Menu Selection

Three Keys to an Agent’s Menu Selection

I recently read a survey published in a leading weekly industry publication that discussed an issue well worth taking note of. The publication surveyed over 200 dealerships asking for their opinion of how and why a Menu should be incorporated in their F&I selling system. Of those surveyed, approximately 85% said using a menu was important to consistently sell F&I products. Though all of the respondents agreed that a menu should be part of the sales process, they didn’t agree on the type of sales system or methods that should be utilized.

So what should an agent take from this survey? An agent would like to think that he (or she) can always control the selling process within a dealership, but the fact is that even though most of the time he implements his particular F&I selling process within a dealership, he can’t always expect it to be embraced by all dealership personnel.

An agent could even lose an account by trying to force a specific sales process in the dealership – especially if certain decision-making personnel don’t completely support the process. Simply put, an independent agent needs a menu system flexible enough to account for a variety of dealer needs.

The survey also suggested that menu selling has been a key component in the increase in F&I income for a dealership, and since the adoption of menu selling, vehicle service contract penetrations have risen and maintained penetrations of approximately 30-40%, peaking at 39% in 2010.

The National Automobile Dealers Association’s 2011 Data report also supported the idea that F&I income is increasing as menu selling becomes more popular when it reported an increase of aftermarket income in 2010 of 15% (in F&I dollars) and an increase of 7% in service contract dollars from 2009.

It is clear that menu selling is not only the future of F&I product sales, but is the best practices standard as well. So what do I need to know as an agent when selecting the appropriate menu system that will both meet these best practices standards and provide the tool that can be used with the F&I selling process of a dealers choice?

Although, it is important to keep these two concepts at the forefront of each electronic menu implementation, there are three other essential features that I believe should be incorporated into the menu system:

  1. Base Payment must be shown
  2. Menu Product Positioning
  3. Ability to Provide Multiple Templates for the Menu

The Menu Must Show a Base Payment

Sure, I’ve heard the argument, “there is no legal precedent that has made the base payment on the menu a necessity,” and though no one has been sued for not including the appropriate base payment on their menu, common sense tells us that by not disclosing it, the dealer may be exposed to potential litigation. I personally would not be comfortable recommending a sales system to my dealers that didn’t include an accurate base payment.

The fact is: the menu is front and center in the purchasing process and contributes a major part of the financial decision making process for the customer. It is admittedly my un-legal opinion, that it is only a matter of time before it will be scrutinized as such.

As a result of the FTC’s recent roundtable event touted as the ‘listening tour’, the Federal Reserve Board (FRB) has temporarily exempted dealers from certain requirements under the Dodd-Frank Act. The FRB also announced that it still maintains the authority to issue rules for certain motor vehicle dealers.

If we as an industry are scrutinized, and part of that scrutiny is focused on the menu process that is implemented in most automobile dealerships and an increasing number of powersports dealerships, I certainly hope that the commission sees that menu systems provide a transparent selling process – and providing an accurate base payment on a menu would certainly be a part of that.

Potential legal exposure aside, if looked at from a sheer selling strategy point of view, I’d like to hear the answer when the customer poses the question, “where is the payment without any of the products?”

Menu Product Positioning

The implementation of electronic menus has given us a tremendous amount of flexibility in our F&I sales process. We can select different product closing options on the fly, as well as change the options so that we can display the different options to our customers.

With all this added flexibility, how do we choose our package options that are displayed on the menu, in what order do we display them, and how often should they appear? This is what is considered product positioning within the menu, and I like to look at menu product positioning the way merchandisers look at how they display products for us to choose at retail facilities or grocery stores.

Merchandisers place products strategically so they are marketed and displayed for buyers’ specific choices. The optimal placement is at eye level at the front of the store. For a menu, it’s at the top of each column and according to what appears most frequently. So how does the finance manager make the choices of where to display the products on the menu? I suggest you focus on five key areas when evaluating your menu set up.

  1. Which products do you believe in most? The products that you have the most enthusiasm for will be the ones that you are most successful selling.
  2. Which products have the most benefit to the customer? This can differ by customer. For example a construction worker who could be injured on the job most likely sees more value in disability insurance than a white collar worker such as an attorney. Someone who keeps their vehicle for 5 or 6 years probably would buy a service contract before someone who trades every 2 or 3 years.
  3. Which products fit best within the loan terms? GAP protection fits very well with a person who is financing for 6 years, or a 5 year 100,000 mile wrap contract fits well for a customer financing for 5 years.
  4. Which products are soft-adds? That is, which products are okay to sell without asking for lender approval? And….
  5. Which products have the smallest increase in a customer’s monthly payment? The smaller the bump that you have to make to sell a product correlates to a product that is easier to persuade the customer to take.

The electronic menu must have the ability to provide multiple templates for the appropriate number of products and options

The best electronic menus allow the user to set up multiple templates so that you can change the menu product positioning quickly and easily. It should allow you to simply select the menu template that is set up for a particular situation.

For example, a default “Long-term Finance Menu” would have the service contract appear at the top or optimum positioning on the menu and also appear four times. The GAP could appear second and then appear 3 times. On the other hand, a “Tire and Wheel” focused menu might have good product placement for a luxury car with high performance rims and tires. I would also recommend having templates that allow for just three (3) options instead of four (4). These might be used for people who don’t qualify for certain products, so you don’t have as many potential products to sell.

Finally, the survey mentioned that there is a move many finance managers to limit the number of products displayed on a menu. The reasoning behind this idea is that fewer options give the F&I person less to focus on. Therefore, they are more effective selling those carefully selected products for a particular customer. This doesn’t come as a surprise to me.

I am often asked how many products should appear on a menu. This is a tough one, because it can vary immensely depending on the finance person’s ability to handle numerous options. If you put a gun to my head and ask me to choose I’ll go with 5-7 products presented in 2-3 product presentation packages.

What I mean by product packages is since the customer will only endure so many product presentations, present them in packages, such as a service contract presentation with the option of a tire and wheel upgrade, or loan protection which has 3-option benefits of credit life, disability and GAP protection that all protect the loan.

These keys work for any F&I sales process

Is there only one sales process that works? Of course not! We at The Vision of F&I have always promoted a sales system that uses the menu as a closing tool, rather than a spreadsheet to sell from, but we also understand our method might not be the preferred method to be used by all agents and dealers.

Therefore, the electronic menu tool needs to be flexible enough to account for many types of sales presentations. It should be transparent, which includes showing the accurate base payment and it should be flexible enough to allow the F&I manager the ability to mix and match their product options based on the customer’s needs. That is what they are telling us they want!

Posted in Product & Technology0 Comments

Should Your Agency Diversify into the Powersports Niche?

Should Your Agency Diversify into the Powersports Niche?

Whenever a new product is introduced to an independent agent, they ask themselves, “Should I take this product to my dealers?” An example of such a decision occurred when the “Combination Package” was introduced by several ancillary product companies recently. The combination package is a mixture of Tire and Wheel, Dent and Ding, Windshield Repair, and Key Fob Replacement. Sometimes these new product offerings become a staple in the F&I office, like the Tire and Wheel product has; other times they just fade away only to be replaced by the next new product.

An agency may take the new opportunity to their dealer for a variety of reasons:

  • The dealer expects them to bring exciting new profit ideas.
  • To diversify product/income opportunities for the dealership & agency.

An agents decision to promote the new product is really a decision to “break the paradigm” of the status quo and change the way the agency does business. This can sometimes be subtle but many times it requires a significant shift in agency practices. Introducing a new product may dilute existing product offerings or cause the agency bad will with the dealer if it isn’t successful or the company doesn’t follow through with such promises as paying claims efficiently.

Breaking the paradigm is necessary for the proactive independent agent if they want to lead people in a new direction but is something few can do because as much as we say we want change, it is natural to resist it.
In addition to breaking the paradigm by bringing a new product to a dealer, an agent may also diversify into another related business. The skills that an independent agent has in consulting the dealership with their F&I Department for Automotive dealers can be effectively transferred to the F&I Department for the Power Sports dealership but his/her approach needs to be different.

How does an Independent Agent break the paradigm and diversify into PowerSports?

Just as there are many similarities between Automobile and Powersports dealerships, there are also many differences. Their similarities provide for the appearance that an independent agent can easily transition from automobile F&I into Powersports F&I. This appearance has led several agents to try their hand at Powersports, all to often returning to their comfort zone because they were unsuccessful. If you take the exact same approach that you do in Automotive and try to duplicate it in Powersports, you’re almost certain to fail. To provide you success with Powersports dealers I suggest you take the “Best Practices” that have made you successful in the Automotive sector and tailor them to the Powersports sector.

I have heard many people in the both industries say the Powersport’s industry is 10 years behind the automotive industry when it comes to Sales and F&I but that’s not really the case. They are just very different industries. One difference is that the PowerSports industry is filled with enthusiasts who are both selling and purchasing the product. Another difference is it is more difficult to get the customer financed because there are less lending options available. Powersports customers are also more likely to pay cash for their purchase.
In the end, both industries need a front-end sales and an F&I sales process which results in providing the customer various options and products to choose from.

Which dealers should you focus on?

Under most circumstances, when calling on an automotive dealer, you know if you sign the business you’re going to get paid. This does not necessarily hold true when you sign a Powersports dealer. When calling on Powersports dealerships you must qualify the dealer just to evaluate their income potential. These are the dealers that have the potential to be the most profitable accounts. They are low maintenance and often aren’t being serviced by their existing agents. These dealers most likely aren’t realizing their true income potential.

  • Focus on Medium to Large Dealers: Medium to large dealerships typically sell more units and often employ an F&I Manager which usually translates into more product sales. How do you know which dealers these are? You could scan the dealership to see how many units are on the lot and in the showroom but this may not reveal the entire story. Powerports Business Magazine is a great resource for this kind of information. They produce a market data book annually that lists most dealerships annual revenue and publishes whether or not they have an F&I Department.
  • Focus on Dealers that have an F&I Manager: We have learned that automotive dealerships having a dedicated F&I Department translate to the highest profitability. Powersports dealers aren’t any different. If an F&I Manager is employed, it is usually worth your while to pursue the account. Unfortunately, many powersports dealers haven’t made the transition to a dedicated F&I Manager. So, the only way you’ll know is to go in and talk to the people who work there. You may just find that dealer who isn’t reaching their true potential.
  • Focus on Dealers that will install process tools like Menu and Reporting software which will increase the chances they sell F&I products. If a dealer is willing to install an F&I selling system that promotes product sales, you can be moderately successful even if only the salesforce is selling the F&I products. I suggest you offer a turnkey system to the dealership that includes an electronic menu system to ensure products are offered 100% of the time and a reporting system to hold them accountable to the set goals and desired results. If the dealer isn’t willing to install a system to ensure the dealerships success, then they most likely won’t hold employees accountable for presenting the necessary products to ensure dealer and agency profitability.

What is your unique sales proposition?

Brand your agency as one that specializes in Powersports F&I consulting
You shouldn’t just act like you’re in the Powersports business, you should look like it. Start by having a Powersports specific area at your website. Describe your agency as one that services motorcycle dealers with:

  • A Mission Statement that is specific as to what you do.
  • An Intuitive Navigation System that makes it very easy to get there by simply pointing and clicking to where you want to go.
  • A great visual experience coming into the Powersports area of your website.
  • A description of your services which differentiate you from your competitors.
  • Logins to your Technology tools (i.e. Menu, Reporting, Desking, On -Line Training).

You need to create a business card with a logo and headline specific for Powersports dealers. When you present or leave your card behind, you will have an edge if it spells Power sports. You should be versed in the industry just as you are in automotive. That means keeping up on the latest Powersports news, especially as it relates to F&I. For example, the lenders in this niche are different than in Automotive. You should know who those lenders are as well as their lending practices.

Align your agency with the right vendors
The right vendor may or may not be the same as those you use for your Automotive Aftermarket products. Be sure and chose a company that understands the Powersports business, not just someone offering a product line.

Position yourself as a reinsurance expert
Many agents have become very successful in the automotive niche by positioning themselves as the reinsurance expert alternative. You can use this same strategy for Powersports. You’ll find that many times the dealer has never been given an option to start a reinsurance position with their existing provider. Providing reinsurance to the dealer not only gives them an excellent profit opportunity, it allows you a potentially long lasting partnership with the dealer.

Use Technology to enhance your offering
In order to set yourself and the dealership up for success, you need to insist from the start which policies and procedures will get you there. One such policy is to require that the F&I Department use an electronic menu and report as part of your unique sales proposition. It will separate you from your competitors and install the tools necessary for the dealer to be profitable. The electronic menu should be designed specifically for Powersports. It should not be a menu that was designed for the automotive F&I department. A Menu designed for Powersports means it has the flexibility to handle things like promotional options, fewer package options, and when necessary, breaking out accessories and applying taxes, or capping payments when the lender restricts the payment or amount financed. I suggest you offer it for free to the dealer as long as they achieve a minimum level of production. You can always prorate the fee to them based upon them achieving lower levels of production. This way you don’t end up losing money or not making a reasonable profit with the account.

Sell them on using a Menu
Automotive agents who have experienced the evolution of menu selling know that it hasn’t just served as a compliance tool, it has enhanced F&I income since its inception. Most auto dealers see the value of using an electronic menu and are probably already using one. This is not the case with the Powersport’s dealer. Only about 10-20% of Powersports dealers use an electronic menu much like it was in Automotive five years ago. This makes your first order of business to sell the dealer on why an electronic menu will make them profitable. The use of a menu should be a requirement to do business with you, and part of your unique sales proposition.

Should you break the paradigm?

I am not suggesting that all agents should “break the paradigm” and diversify into the Powersports area, anymore than every new product that comes out should be placed in your briefcase. Simply signing a few dealers and transferring the same message that you use in Automotive is likely to cost you time and money.

What I am suggesting is you recognize the differences between the two businesses and focus your skills on their similarities. Instead of visiting the dealership each week to train the F&I staff, use online training and monthly meetings to leverage your position with the dealer.

Posted in Product & Technology0 Comments

Should Your Agency Diversify into the Powersports Niche?

Should Your Agency Diversify into the Powersports Niche?

Whenever a new product is introduced to an independent agent, they ask themselves, “Should I take this product to my dealers?” An example of such a decision occurred when the “Combination Package” was introduced by several ancillary product companies recently. The combination package is a mixture of Tire and Wheel, Dent and Ding, Windshield Repair, and Key Fob Replacement. Sometimes these new product offerings become a staple in the F&I office, like the Tire and Wheel product has; other times they just fade away only to be replaced by the next new product.

An agency may take the new opportunity to their dealer for a variety of reasons:

  • The dealer expects them to bring exciting new profit ideas.
  • To diversify product/income opportunities for the dealership & agency.

An agents decision to promote the new product is really a decision to “break the paradigm” of the status quo and change the way the agency does business. This can sometimes be subtle but many times it requires a significant shift in agency practices. Introducing a new product may dilute existing product offerings or cause the agency bad will with the dealer if it isn’t successful or the company doesn’t follow through with such promises as paying claims efficiently.

Breaking the paradigm is necessary for the proactive independent agent if they want to lead people in a new direction but is something few can do because as much as we say we want change, it is natural to resist it.
In addition to breaking the paradigm by bringing a new product to a dealer, an agent may also diversify into another related business. The skills that an independent agent has in consulting the dealership with their F&I Department for Automotive dealers can be effectively transferred to the F&I Department for the Power Sports dealership but his/her approach needs to be different.

How does an Independent Agent break the paradigm and diversify into PowerSports?

Just as there are many similarities between Automobile and Powersports dealerships, there are also many differences. Their similarities provide for the appearance that an independent agent can easily transition from automobile F&I into Powersports F&I. This appearance has led several agents to try their hand at Powersports, all to often returning to their comfort zone because they were unsuccessful. If you take the exact same approach that you do in Automotive and try to duplicate it in Powersports, you’re almost certain to fail. To provide you success with Powersports dealers I suggest you take the “Best Practices” that have made you successful in the Automotive sector and tailor them to the Powersports sector.

I have heard many people in the both industries say the Powersport’s industry is 10 years behind the automotive industry when it comes to Sales and F&I but that’s not really the case. They are just very different industries. One difference is that the PowerSports industry is filled with enthusiasts who are both selling and purchasing the product. Another difference is it is more difficult to get the customer financed because there are less lending options available. Powersports customers are also more likely to pay cash for their purchase.
In the end, both industries need a front-end sales and an F&I sales process which results in providing the customer various options and products to choose from.

Which dealers should you focus on?

Under most circumstances, when calling on an automotive dealer, you know if you sign the business you’re going to get paid. This does not necessarily hold true when you sign a Powersports dealer. When calling on Powersports dealerships you must qualify the dealer just to evaluate their income potential. These are the dealers that have the potential to be the most profitable accounts. They are low maintenance and often aren’t being serviced by their existing agents. These dealers most likely aren’t realizing their true income potential.

  • Focus on Medium to Large Dealers: Medium to large dealerships typically sell more units and often employ an F&I Manager which usually translates into more product sales. How do you know which dealers these are? You could scan the dealership to see how many units are on the lot and in the showroom but this may not reveal the entire story. Powerports Business Magazine is a great resource for this kind of information. They produce a market data book annually that lists most dealerships annual revenue and publishes whether or not they have an F&I Department.
  • Focus on Dealers that have an F&I Manager: We have learned that automotive dealerships having a dedicated F&I Department translate to the highest profitability. Powersports dealers aren’t any different. If an F&I Manager is employed, it is usually worth your while to pursue the account. Unfortunately, many powersports dealers haven’t made the transition to a dedicated F&I Manager. So, the only way you’ll know is to go in and talk to the people who work there. You may just find that dealer who isn’t reaching their true potential.
  • Focus on Dealers that will install process tools like Menu and Reporting software which will increase the chances they sell F&I products. If a dealer is willing to install an F&I selling system that promotes product sales, you can be moderately successful even if only the salesforce is selling the F&I products. I suggest you offer a turnkey system to the dealership that includes an electronic menu system to ensure products are offered 100% of the time and a reporting system to hold them accountable to the set goals and desired results. If the dealer isn’t willing to install a system to ensure the dealerships success, then they most likely won’t hold employees accountable for presenting the necessary products to ensure dealer and agency profitability.

What is your unique sales proposition?

Brand your agency as one that specializes in Powersports F&I consulting
You shouldn’t just act like you’re in the Powersports business, you should look like it. Start by having a Powersports specific area at your website. Describe your agency as one that services motorcycle dealers with:

  • A Mission Statement that is specific as to what you do.
  • An Intuitive Navigation System that makes it very easy to get there by simply pointing and clicking to where you want to go.
  • A great visual experience coming into the Powersports area of your website.
  • A description of your services which differentiate you from your competitors.
  • Logins to your Technology tools (i.e. Menu, Reporting, Desking, On -Line Training).

You need to create a business card with a logo and headline specific for Powersports dealers. When you present or leave your card behind, you will have an edge if it spells Power sports. You should be versed in the industry just as you are in automotive. That means keeping up on the latest Powersports news, especially as it relates to F&I. For example, the lenders in this niche are different than in Automotive. You should know who those lenders are as well as their lending practices.

Align your agency with the right vendors
The right vendor may or may not be the same as those you use for your Automotive Aftermarket products. Be sure and chose a company that understands the Powersports business, not just someone offering a product line.

Position yourself as a reinsurance expert
Many agents have become very successful in the automotive niche by positioning themselves as the reinsurance expert alternative. You can use this same strategy for Powersports. You’ll find that many times the dealer has never been given an option to start a reinsurance position with their existing provider. Providing reinsurance to the dealer not only gives them an excellent profit opportunity, it allows you a potentially long lasting partnership with the dealer.

Use Technology to enhance your offering
In order to set yourself and the dealership up for success, you need to insist from the start which policies and procedures will get you there. One such policy is to require that the F&I Department use an electronic menu and report as part of your unique sales proposition. It will separate you from your competitors and install the tools necessary for the dealer to be profitable. The electronic menu should be designed specifically for Powersports. It should not be a menu that was designed for the automotive F&I department. A Menu designed for Powersports means it has the flexibility to handle things like promotional options, fewer package options, and when necessary, breaking out accessories and applying taxes, or capping payments when the lender restricts the payment or amount financed. I suggest you offer it for free to the dealer as long as they achieve a minimum level of production. You can always prorate the fee to them based upon them achieving lower levels of production. This way you don’t end up losing money or not making a reasonable profit with the account.

Sell them on using a Menu
Automotive agents who have experienced the evolution of menu selling know that it hasn’t just served as a compliance tool, it has enhanced F&I income since its inception. Most auto dealers see the value of using an electronic menu and are probably already using one. This is not the case with the Powersport’s dealer. Only about 10-20% of Powersports dealers use an electronic menu much like it was in Automotive five years ago. This makes your first order of business to sell the dealer on why an electronic menu will make them profitable. The use of a menu should be a requirement to do business with you, and part of your unique sales proposition.

Should you break the paradigm?

I am not suggesting that all agents should “break the paradigm” and diversify into the Powersports area, anymore than every new product that comes out should be placed in your briefcase. Simply signing a few dealers and transferring the same message that you use in Automotive is likely to cost you time and money.

What I am suggesting is you recognize the differences between the two businesses and focus your skills on their similarities. Instead of visiting the dealership each week to train the F&I staff, use online training and monthly meetings to leverage your position with the dealer.

Posted in PowerSports0 Comments

Page 1 of 212