Tag Archive | "dealers"

J.D. Power: Speed No Longer Top Consideration When Selecting Finance Sources


DETROIT — When it comes to choosing lender partners, dealers value the type of relationship they have with their finance sources over the speed of their services, according to J.D. Power’s 2016 U.S. Dealer Financing Satisfaction Study.

Jim Houston, senior director of the automotive finance practice at J.D. Power, said finance sources need to shift from a transactional relationship with their dealers to a more consultative one.

“Speed has been king and the area lenders have traditionally focused on, but as the market gets tougher, lenders need to center their attention on their relationships with dealers, or they are going to lose business,” Houston said.

The first step to success, Houston noted, is communication. According to the study, fewer than half of dealers receive consistent sales rep calls or visits from their finance sources — both of which can boost overall satisfaction by as much as 6.8% and 7.5%, respectively. However, it’s not just about frequency, he added. The nature of the calls or visits is what really adds value to the relationship.

“Dealers value a lender that can help them handle the tough issues and solve those outside-the-box situations,” Houston said. “This is where having the right people focused on their dealers and helping them execute their strategic plan is essential.”

There are three things that dealers want from their lenders but aren’t necessarily getting on a consistent basis, Houston noted. Dealers want their lenders to maintain consistent performance among their dealer relationship managers, identify their best dealers and prioritize those relationships, and to focus on areas most important to dealers. Finance sources that are able to meet these expectations, he added, will reap a greater share of the business.

The study also found that there was a correlation between high satisfaction ratings among finance sources and how much business dealers send to those respective lenders over the next year.

Sixty-two percent of dealers who indicated they were 90% or more satisfied with a lender said they would likely increase the amount of business they would send to that lender over the next year. However, as soon as satisfaction with a lender begins to dip, the expected increase in business drops dramatically. As soon as a lender’s satisfaction rating drops below 90% to 80%-89%, according to the study, the amount of dealers who indicate they’d send more business toward that lender plummets to 37%. That amount drops to 22% when satisfaction ratings drop to 70%-79%.

While the study found that speed was no longer the leading factor for dealers deciding on a lender partner, it still plays a significant role. Dealer satisfaction increases by as much as 6.4% when lenders fund error-free contracts the same day they are submitted, the study found. If lenders notify dealers of contract issues within four hours of submission, satisfaction increases by as much as 6%. Additionally, a well-managed exception process can increase overall satisfaction by up to 7.9%.

When it came to satisfaction ratings, Mercedes-Benz Financial Services and BMW Financial Services were the clear winners of the study. Mercedes-Benz Financial Services placed first across all three of the segments the study looked at: prime retail credit, retail leasing and floor planning. BMW Financial Services placed second across all segments.

The 2016 U.S. Dealer Financing Satisfaction Study captured more than 20,000 finance provider evaluations across four segments. The evaluations were provided by 3,100 new-vehicle dealerships in the United States.

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AE to Honor Women in the Industry


TARPON SPRINGS, Fla. — The publishers of Agent Entrepreneur are accepting nominations for “Women in the Industry,” a cover story that will honor hardworking and successful women in the dealership, agency and F&I product provider and administrator segments.

“In what many still regard as a male-dominated industry, countless strong, smart, industrious women have reached the heights of success,” said Kate Spatafora, associate publisher of AE and P&A. “If you or someone you know fits that description, I encourage you to nominate them today.”

The deadline for nominations is August 28. Nominations should include:

  • The nominee and nominator’s name, title, company and contact information
  • 100 to 200 words explaining why the nominee is deserving of recognition, including any professional accomplishments, recent promotions, honors and awards

The magazine’s publishers and editorial board will carefully consider every nomination and select 20 honorees for inclusion in the story, which is scheduled to run in the September/October 2016 edition of AE.

 

Submit Your Nomination!

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A Month’s Work in Three Days


Over the many years I have spent working with agents and F&I product providers, I have gotten a pretty good insight as to the best time to call on your dealer accounts. I’ll share the benefit of my anecdotal observations here.

Narrowing the Field

First, it’s not good to call on dealers in a week that begins or ends the month. On the last few days of the month they are busy trying to get as many deals done as possible to “make” their month. The first few days of the month are bad because they are closing out the previous month and figuring out what the month’s first paycheck will look like.

That leaves the middle three weeks, but even then, you have to be strategic

First, it’s not good to call on them on Monday. They are finalizing the deals from the weekend and don’t have time to see you. Friday is also bad, because they are looking forward to the weekend and are, as you know, distracted. You like to start your weekend early anyway, so it works out.

That leaves Tuesday through Thursday, three weeks out of the month. That’s a nine-day window, folks, and we’re not done yet.

Because the managers you need to see work weekends, they will very likely take Tuesday or Wednesday off. It makes no sense to visit the dealer unless you can see all the managers, right? Thursday is a better day.

So that leaves just Thursdays, three weeks out of the month. That’s three short days a month.

However, dealers tell us that they expect their reps to spend Thursdays doing some training, spend some time with their people and maybe take them to lunch. That takes most of the day. When you add driving time, you really can only service one account per day if you do it properly.

So that leaves three days for three accounts. That’s all you can really expect to cover in a month.

However, the dealer would like to see you more than once a month. After all, he makes you a lot of money, right?

So it looks like you need to limit yourself to one dealer account. That way you can provide the level of training and service the dealer has every right to expect.

Of course, you’ll have to figure out how to pay for the gasoline to get there.

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AE to Honor Women in the Industry


TARPON SPRINGS, Fla. — The publishers of Agent Entrepreneur are accepting nominations for “Women in the Industry,” a cover story that will honor hardworking and successful women in the dealership, agency and F&I product provider and administrator segments.

“In what many still regard as a male-dominated industry, countless strong, smart, industrious women have reached the heights of success,” said Kate Spatafora, associate publisher of AE and P&A. “If you or someone you know fits that description, I encourage you to nominate them today.”

The deadline for nominations is August 28. Nominations should include:

  • The nominee and nominator’s name, title, company and contact information
  • 100 to 200 words explaining why the nominee is deserving of recognition, including any professional accomplishments, recent promotions, honors and awards

The magazine’s publishers and editorial board will carefully consider every nomination and select 20 honorees for inclusion in the story, which is scheduled to run in the September/October 2016 edition of AE.

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Compliance Summit Adds Certification Component


TAMPA, Fla. — Organizers of Compliance Summit have announced that attendees will have the opportunity to earn Certified Automotive Compliance Specialist status at the Las Vegas event, which will be held Aug. 29–30, 2016, at Paris Las Vegas, as part of the annual Industry Summit.

David Gesualdo, who serves as show chair and as publisher of Auto Dealer Today and F&I and Showroom, said the addition of a certification component was in response to demand from past attendees.

“I can’t tell you how many times we have heard, ‘I need something I can take back to the dealership,’” Gesualdo said. “That is a perfectly reasonable request and, with the help of our speakers, we are going to make it happen.”

Certification will require participation in a comprehensive, four-hour review session on Tuesday afternoon and successful completion of a written exam. The review will be given by Compliance Summit speakers and focus on the following topics:

Part 1:

  • Ethics
  • Reg Z
  • Reg M
  • Risk-Based Pricing Rule
  • Adverse Actions
  • ECOA
  • FCRA
  • Credit Applications
  • Signature Issues
  • Conditional Delivery
  • Monroney Labels
  • Addendum Stickers

Part 2:

  • Magnuson-Moss Warranty Act
  • Used Car Rule
  • Red Flags Rule
  • Safeguards Rule
  • FACT Act
  • Cash Reporting
  • OFAC
  • USA PATRIOT ACT
  • Discrimination
  • Fair Credit Policies
  • UDAP
  • EH&S Basics

Compliance Summit is a series of regional events that began in Miami in November 2014 and has made stops in Chicago, Austin and Tampa. Attendees are invited to take part in the rest of Industry Summit, which also includes two full days of sales and F&I training, at no additional cost.

To register for the Las Vegas event, visit www.dealercompliancesummit.com. Attendees who register by July 29 will enjoy a $100 discount. For more information about Compliance Summit, including sponsorship and exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or at 727-947-4027.

Posted in Auto Industry News, Summit UpdatesComments (0)

F&I Is Not About Menus


Everyone in our industry has their own vision of what our new, hyperconnected world, tomorrow’s vehicles and the F&I department of the future might look like. It seems every manufacturer, DMS provider and F&I menu software company has their own high-tech version of what the sales and F&I process needs to become. In this geekoid future of Snapchats, Instagrams, and Tweets, we’ll discover a glorious new world filled with cars that drive themselves and products that sell themselves, which are then delivered right to our doorstep via Amazon drones.

The ultimate fiction of this shiny new techie-world of virtual reality goggles, wall-size touchscreens and chat-bots is that somehow computers and menu software will soon be able to discover and fill customer needs, create customer interest, overcome objections and entice people to buy more stuff. And they’ll be able to pay for it all with digital money that rains down from a virtual cloud. Yeehaw!

Now I certainly don’t profess to know what the future holds. However, I do know that, while technology, computers and software can do a lot, there’s one thing they can’t do and won’t ever be able to do: care. Only a human being can care about another human being.

The Easy Button

Dealers, F&I managers and agents (and F&I trainers!) are always looking for an “easy” button — that new product, word-track or “close” that will magically get customers to buy F&I products with little or no effort. Whether it’s menu-selling software, a new closing technique or a video product pitch using a spokesmodel, hope springs eternal that someone has found a quick, easy and foolproof way for an F&I manager to sell more F&I products and make more money in less time with less work.

The latest easy buttons are the high-tech electronic F&I menus that have more bells and whistles than a $35,000 Tesla. The only difference being they’re actually available, and you don’t have to stand in line to buy ‘em. Some of these menu software companies now offer desktop or large tablet touchscreens or their menu on an iPad. Some even include computer-generated graphics and video product presentations. Most allow the customer or F&I manager to easily move products around to see how adding or removing them will change their payment.

Some of these menu software programs are truly impressive. They have the ability to combine previous purchase information and new customer data to determine which products they’re most likely to buy. These menu software programs mine the dealership’s own data to see what F&I products the customer bought last time, as well as the odds the customer will purchase a specific F&I product this time.

Even I have to admit this is a huge improvement. In prehistoric times, we actually had to get off our butts and walk down to the accounting office and pull the customer file out of the file cabinet to see what F&I products they bought for their last vehicle.

Many of these software programs include self-serving “customer surveys” that are designed to eliminate the needs discovery process. I put the term in quotes because these brief surveys include a few questions designed to replace the antiquated idea of having an actual conversation with a customer. Most software designers aren’t too keen on human conversation, so the assumption is that most consumers would prefer little or no conversation.

Once the customer completes the survey, the F&I software operator knows which products they should offer the customer. Apparently, knowing the answer to only six or eight questions allows a computer to know all of the products a customer is likely to buy. Here’s what the computer says you need, here’s what it covers and here’s your new payment. Now talk yourself into it.

All of these menu software programs can structure the deal and create a menu designed to ensure maximum profit. And all are promoted as a surefire way to increase F&I product sales and profits. On the surface, they are certainly pretty slick. And this futuristic dream of software that sells F&I products continues to be updated, upgraded and improved upon every year in an effort to move us all toward what they really desire, which is to get agents and dealers to buy their software.

But is a high-tech menu on a big screen what the customer wants?

Do you really believe most human beings desire less human interaction and more preprogrammed, premeditated, computer-generated digital sales presentations based on odds, algorithms and logic traps? Do you really think self-serving software created specifically to benefit the user, not the customer, is the way anyone wants to buy anything? No one who has ever been trapped in an automated phone system loop, those automated torture devices that misunderstand what you say or require an endless series of button pushes to complete even a simple task, wants to envision a future with more of that.

That’s not progress. That’s hell on earth!

Putting Technology in Its Place

We have cameras in hundreds of F&I offices and record thousands of F&I transactions every month, and I have yet to hear a customer request a better menu, complain because the options were offered on a paper menu or demand to see a touchscreen version. In reality, most customers couldn’t care less how F&I products are offered. While one generation may prefer viewing a menu on a computer screen to a paper version, they certainly aren’t going to buy any F&I products because of a pretty menu.

All a customer wants to do is get their paperwork completed as quickly as possible so they can take delivery of their new vehicle. The fact is, most customers do not walk into an F&I office wanting to buy additional products. Nor do they want to be forced to wait while an F&I manager creates a custom menu with those products. If customers are being forced to wait while a menu is being prepared, we’re wasting their time. Can you imagine a restaurant forcing every customer to wait while a custom menu is created just for them? That restaurant wouldn’t last a month.

What a customer is really buying is the F&I person presenting those products. Customers appreciate having someone take time to review the options, answer their questions and help them make an informed decision. They resent having to listen to a sales pitch. It doesn’t matter whether that sales pitch is made using a brochure, a paper menu or a 60-inch flat-screen monitor. It’s still a sales pitch.

Every customer asks themselves this question: “Is this person trying help me, or is this person trying to sell me?” How they answer that question in their own mind will determine whether or not we’re able to sell them. If they think that F&I person is trying to help them, they’re going to be very interested in what they have to say. If they think that F&I person is trying to sell them, they couldn’t care less what that person has to say.

Helping customers demands that an F&I professional seek out, with eagerness, reasons why the customer needs each and every one of their products, and helping them see how that product will benefit them. If a customer trusts that person, believes they know what they’re talking about, and feels like they’re genuinely trying to help them, they will value that individual’s knowledge, expertise and input. It doesn’t matter whether those products were offered on a high-tech menu or a bar napkin.

F&I is not about menus. It’s about helping customers make an informed decision about the options available in connection with their purchase. Customers don’t buy F&I products because they understand every nuance of the coverage. They buy them because they feel someone understands their unique situation and is trying to help them make the right decision for them and their family — in other words, an F&I professional.

In the F&I office, we have a responsibility to offer every customer every product every time. You don’t need a custom menu to do that. We don’t need F&I software operators spending more time customizing menus. We need F&I Professionals who are genuinely interested in helping customers, and care about people. Because customers don’t care how much you know, until they know how much you care. And no menu can do that.

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