Agents Wield the Power of Compliance

As headlines reporting dealer malfeasance continue to multiply, American Financial’s John Vecchioni joined Compliance Summit to urge those responsible for F&I development to take an active role in building a more transparent process.
By: Tariq Kamal

Agents Wield the Power of Compliance

On Monday, Sept. 11, 2017, agents, dealers, F&I professionals and other attendees of Industry Summit packed into a ballroom at the Gaylord Texan Hotel Resort & Convention Center for Compliance Summit, a one-day educational slate followed by the Automotive Compliance Specialist certification review and exam proffered by Automotive Compliance Education (ACE) the next morning.

After months of planning, the first half of the Compliance Summit agenda had to be rebuilt onsite. In the week leading up to the event, Hurricane Irma swept through the Caribbean, heading northwest and forcing attendees from Florida to cancel their trips to Dallas. The list of those affected included Compliance Summit’s first two speakers: keynoter and famed sales trainer Jim Ziegler and Terry O’Loughlin, the attorney and former regulator who now serves as director of compliance for Reynolds and Reynolds.

Enter John Vecchioni, director of sales training and business development for American Financial & Automotive Services. Also known as the “F&I Professor,” Vecchioni wasn’t scheduled to speak until the next day. But he was primed for action, having helped propel American Financial to its second consecutive first-place Diamond award for Compliance Training in the 2017 Dealers’ Choice Awards. (The company also was voted by dealers as the nation’s leading F&I and sales training provider in this year’s contest.)

With very little notice and no time to prepare, Vecchioni stepped up to deliver a rousing keynote address with a clear message for anyone involved in F&I training — agents included: Our industry is heavily regulated and facing stricter enforcement, and those who follow the rules will prosper — not just by staying out of trouble but by acknowledging that customers expect and deserve a transparent sales and finance process.

Be a Professional

“Some of those who have heard me speak before know that I’m a huge proponent of professionalism in our industry,” Vecchioni said. “We have a minority of people out there that just don’t seem to get it. This is a professional business.”

Meeting the standards of a professional requires those who are invested in F&I — including dealers and agents as well as finance directors and managers — to know exactly what their responsibilities are, he added.

“It’s not a question of what I think I can get away with,” Vecchioni said, adding he is constantly amazed by the number of industry members who are still looking for ways to get around longstanding rules. “We talk about Regulation Z like it’s something new. I mean, the Detroit Tigers won the World Series in 1968, and that’s when Reg Z came out. … We’ve been through four generations of people in the finance office and we’re still working on a 1968 regulation.”

The cure, he said, is effective training paired with a commitment to excellence. F&I pros who are new to the industry or just graduated from sales should know that doing things the wrong way leads to constant anxiety over getting busted — “a very difficult road,” as Vecchioni described it — and a lack of trust paired with a negative perception of the dealership on the customer’s part.

Agents, Trainers and Coaches

Vecchioni encouraged agents and F&I trainers in the audience to think of themselves more as coaches. Trainers teach by telling, he said. Coaches teach by doing.

“Coach your people up. Somebody somewhere saw some talent in them and thought they could be somebody. It’s our job to coach them to succeed in that position. … This is how we won the Diamond award. We coach by doing. We don’t coach by telling.”

Whether an agent visits a given F&I department on a daily, weekly or monthly basis, Vecchioni would advise them to focus on the task at hand. Conversations about anything other than performance in pursuit of personal and professional goals should be kept to a minimum. He said F&I coaches should strive to remain students themselves, mastering the art of learning and being open to new ideas and tools.

“You don’t necessarily have to agree with all the innovation that comes down the pike. I might be one of those old school guys who can do F&I on a legal pad — but only because I don’t know how to turn the computer on,” Vecchioni said. Customer satisfaction should come first, he added, and if new hardware or software can make the process more efficient, the benefits will be twofold: Customers will spend less time waiting to get into or out of the finance office, and they will get the sense the dealership is not stuck in the past.

After all, we live at the “pinnacle of information,” Vecchioni said, and car buyers who do research online are bombarded with negative messages about the dealership experience, particularly the F&I portion. This is true even of so-called consumer advocates who should realize the wise investment protection products represent.

“They don’t say, ‘When you go there, you’re going to meet some of the friendlier sales people in the industry. … And then they’re going to put you in this little white room, and in there, you’re definitely going to want to know these people, because on Sundays, they have a front-row seat,’” Vecchioni joked. “You know what they get? ‘Negotiate the trade separate from the sale. Come with your own financing. Never purchase that day. Don’t buy any of that stuff in the finance office, because, Lord forbid, they’re just making money on you.’”

Overcoming Objections

Vecchioni stressed that agents and F&I professionals must always remember that F&I products do, in fact, have merit and value. When customers don’t purchase, he said, it’s because they don’t understand how a given product works or the value it holds for them.

The cure is an approach Vecchioni calls “logical conversational selling.” Have a conversation with customers, not a sales pitch, and start that conversation not by telling but by learning.

“Let’s find out exactly what they’re trying to accomplish,” he said. “Once I know what you want to accomplish, it becomes much easier for me to attach my products to what could benefit you.” Needs-discovery word-tracks are essential, he added, but only if they further the discussion. “Once we learn our word-tracks, we’ve got to start internalizing and personalizing them so they become a part of the conversation we’re having with customers.”

Much has been made of the need to constantly shorten the financing process. Vecchioni said he sees the logic in not wasting customers’ time, but he reminded the audience that, considering the amount of money at stake and the finality of the paperwork customers sign, F&I-by-stopwatch benefits no one.

“I’d like to find the individual who said it’s got to be 20 or 25 minutes. Where’d you come up with that? We’re signing legal contracts here. We’re committing to thousands of dollars. But you’ve got 20 minutes to do it. Seriously?”

Vecchioni said that, in his experience, the only way to expedite the process while simultaneously acknowledging and overcoming objections is to “communicate with good information.” Few customers will buy on features and benefits alone, he said, and even fewer will respond positively to “Everybody buys this.” Each customer must believe it will benefit them and protect their investment, and to truly believe it, they have to say it themselves.

“If I say it, it’s disputable. If they say it, it’s the gospel. If I repeat it back to them, they’re going to quantify it with more information. … If I build enough value, they’ll rationalize the affordability.”

Compliance in the Digital Age

Vecchioni closed the session by reflecting on the progress of compliance training and his pride in American Financial’s new partnership with ACE, which relies on a challenging certification process that doesn’t end with the first exam. Automotive Compliance Specialists must recertify on an annual basis, ensuring they will be up to speed with changing legislation.

It’s a critical component of F&I success, Vecchioni said, and an empowering step for any producer.

“I don’t think anyone should sit in an F&I office unless they can pass compliance certification, quite frankly,” he said. “My experience has shown me that somebody is going to tell them how to do it. I want to be the coach that directs them where to go and how to do it. I want to make sure our finance people have the ability to rule it right or wrong if they have to.”

Compliance training can help keep dealerships out of the regulatory crosshairs, he added, but it also enhances the skill of every F&I professional, no matter how long they have been in the industry.

“The more compliant you are, the easier it is to close deals, believe it or not. I want to do business with someone who knows what they’re doing. I want them to be able to take the time to explain everything to me.”

Vecchioni said he has never shared the concerns some trainers and industry experts have about millennials, a group many believed would have no appetite for the time, pressure and intangibility of the F&I experience. Young car buyers are still human beings, he explained, and many of them are in the dealership to make the first major investment of their lives, often without the help of their parents.

“So how about we take a little more time to explain to them how it works?” Vecchioni asked. “One thing I’ve found out about millennials: They ain’t dumb. If it makes sense, they’ll move. If it makes no sense, they’re not moving.”

Whatever drove the customer the select their vehicle — and whatever their age — uncovering the trigger behind that selection is key. Whether it’s the value, the horsepower or the paint color, the ability to uncover and understand each customer’s motivation gives the F&I manager an edge. But that edge is hard-earned, Vecchioni stressed, and it won’t materialize out of thin air.

“Build a foundation, build the fundamentals, have a good process. Make sure we’re asking the right questions when we’re asking questions,” he said. “Walking out, I know what my objective is: I gotta find out why they would have any need for my product, and then I need to show them their ability to afford it.”

In conclusion, Vecchioni encouraged his audience to spread a message of positivity among trainees: Don’t let millennial customers scare you. Don’t let cash deals or outside financing discourage you or upset your rhythm. Success depends on the F&I professional’s ability to close the next customer, not the last one.

“The attitude I show up with that day is the attitude of a winner. I’m not going to let cash, credit union or lease deals mow me down,” Vecchioni said. “The next customer I face is the most important customer I’ll have that day. And that customer deserves the opportunity to have my best presentation.”

This article was written by:

- has written 30 posts on Agent Entrepreneur.

Tariq Kamal is an editor and contributor for a number of auto industry publications, including Agent Entrepreneur and P&A as well as Auto Dealer Today, F&I and Showroom and Business Fleet. He also serves as an organizer and speaker for Industry Summit, Agent Summit and Compliance Summit.

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