Tag Archive | "Digital"

From the Boardroom: Digital F&I and the Millennial Boom


From their thoughts on what is an acceptable per-copy average to how their companies aim to address the online F&I push, four F&I product provider reps weighed in on a host of top-of-mind topics during Industry Summit 2016’s “From the Boardroom” discussion in late August. The main takeaway for general agents is they’ll play a key role in helping to close the digital divide.

The panel featured Tim Blochowiak, vice president of dealer sales for Protective Asset Protection; Greg Oltman, director of business development for Dent Zone; David Pryor, chief marketing officer for Safe-Guard Products International; and Matt Trudeau, director of national sales for Dent Wizard. Their diverse industry experience and roles within their companies offered attendees a unique perspective on the future of the F&I office. The following is an abridged version of that discussion.

Arroyo: We’ve seen public groups like AutoNation and Group 1 posting some impressive per-copy averages. Where do you think the national average sits?

Blochowiak: We’re typically seeing anywhere between $1,200 and $1,400. AutoNation and Group 1 typically are the bell cow and they seem to be leading the pack.

Oltman: I’ve seen it at $1,150, $1,200, but not quite $1,400.

Pryor: I would agree. We do see what AutoNation does. They’re a partner of ours, so we see what they do. They have a very strong process, and that’s what’s driving them to those numbers.

Arroyo: What about penetration rates?

Trudeau: For PDR [paintless dent removal], when people have a good process in place and they’re consistent with their offerings, we see it in the upper 20% range on new and at about 6% to 7% on pre-owned.

Oltman: I think penetrations for all ancillaries are probably 20%, service contracts at about 50%.

Arroyo: David, what about tire-and-wheel protection?

Pryor: Well, again, the mix out there has shifted toward leasing, which puts pressure on the service contract side. So we see tire-and-wheel penetration going up. In a highline store, you could see 30% to 40% penetration.

Arroyo: Without turning this into a commercial, Matt and Greg, can you get us caught up with what your companies have been up to lately? I’ve seen a lot of activity from you guys of late.

Oltman: Well, first of all, it’s our 25-year anniversary and, to Greg’s point, we’ve got a lot of things going on. We were the first PDR service contract and then the first company to have a nationwide technician network. Recently, we purchased a chemical company and a paint-and-fab company. We also just purchased a new odor eliminator that’s going to be added to our suite of products.

We also developed AutoBodyguard, a new division offering a complete line of appearance program and vehicle protection products. It’s where our new bundle is coming from. It has eight products, including PDR, paint-and-fab and an odor eliminator.

Trudeau: At Dent Wizard, one of our newest additions this year is Ding Shield One. It encompasses PDR with hail damage repair and unlimited cosmetic wheel coverage. It also comes with an option for bumper repair and interior protection. One of the things we take pride in is we service what we sell. We have over 2,400 employees now throughout the United States and Canada, which helps us be good stewards of our program in that we can manage our claims. But it’s adding those different things, especially with the amount of leasing we’re seeing right now.

Arroyo: Let’s move to the service drive, because it remains an untapped source of additional F&I product sales. Matt, Dent Wizard is doing something different in that area, correct?

Trudeau: We do a few different things. There’s the side of our company where we go out and consult with service departments on doing walkarounds and how to receive a customer. We come in and do some training clinics. And we have a program where you can sell dent-and-ding coverage, but it comes with preexisting damage so that advisors can sell it.

But it is like pushing a freight train uphill getting these advisors to sell product, especially if you approach it from that side. What we do is work with them on selling our service, where guys come out and repair a car. And they’re able to mark that up, so they’re interested in doing that. So we work with them on selling our service, not our service contract, and there’s definitely a revenue pickup there.

Arroyo: What about service contracts?

Blochowiak: Well, it’s definitely a challenge. A lot of that has to with the alignment of things. The service writer sells service, and they’re really trying to help the consumer. And when you get into service contracts on used cars, you’re talking several thousands of dollars, where the Dent Zone, Dent Wizard-type products are a lot more palatable for the consumer and a lot less expensive.

The problem with selling service contracts on cars that are already broke is it doesn’t do a whole lot from an underwriting perspective, because rates become so high that you have to price for that. So it’s been a real challenge selling service contracts in the service drive, but there are some dealers who have the right compensation plan in place for their service writers and have experienced success. But it’s minimal, to say the least.

Pryor: There just aren’t enough dealers who are really focused on it. We all see the opportunity, but it’s a process change, a pay plan change. And you have to have the right commitment at all levels of the dealership to make that work.

Oltman: You also need to consider whether there’s enough meat on the bone. I mean, after you pay a service writer and then you pay F&I, you can’t overprice that service contract to that customer if F&I is involved in the service drive. Next thing you know, there’s what? A $50 profit?

Blochowiak: And we may see those types of sales not so much in the service drive going forward, but through technology — apps, phone alerts. If consumers have an app on their phone from either the product provider or the dealership, that gives them opportunities to send out alerts to the consumers and, frankly, offers. And I think catching multiple consumers at the right time makes more sense, because you have a broader consumer base to hit in the course of the day as opposed to the one customer on the service drive at that given time.

Arroyo: Let’s shift to this digital F&I talk. At the magazine’s Dealer Summit this past May, we were having an open forum-type discussion when a compliance and F&I trainer said she didn’t believe much about vehicle sales and finance had changed over the course of her 35-year industry career. She felt that people still want to drive the vehicle, smell it, and be sold on the deal. Do you agree?

Pryor: I would disagree. I think the way consumers are buying cars has changed. They’re doing their research online or looking at social media. They’re looking at dealer reviews. I think they still want to touch and smell the car, but their decision is 90% made before they walk in the door. And I think the F&I industry hasn’t necessarily kept up with that. So I think there is a huge opportunity to start educating consumers earlier in the process by getting more information out there about the products, to focus on the social side and what people are saying about these products.

Oltman: One thing I’ll add to David’s comment is that when we get to that stage — and I’m going to go back to pay plans — you have to make sure that finance wants to get involved. You’re changing their world. So I think the pay plan is a big part of this.

Blochowiak: That’s a really good point. I also think we have to encourage dealers to diversify their interaction with the customer, because not everyone wants to buy a car or interact with the dealership folks in the exact same manner.

Arroyo: So what tech tools are you personally excited about?

Oltman: If you haven’t seen MakeMyDeal, you’ve got to go see it. It’s fabulous. Pearl Technologies’ ShowroomXpress is as good, but MakeMyDeal is here to stay.

Blochowiak: I agree with Greg. I had an opportunity to sit through a demonstration of the MakeMyDeal platform, and it’s nice, because, as I said earlier, it’s about interacting with the customer how they want to be interacted with. And that platform really allows the consumer to start and stop anywhere they want. They can go all the way through to F&I, or they can stop along the way and just use it to shop.

Pryor: I would echo those sentiments about the MakeMyDeal model. What’s interesting about it is it doesn’t take the dealer out of the equation, which I think was the problem with some of the other efforts to kind of push F&I online.

Arroyo: So there are no concerns about production declining?

Oltman: You’re selling a car. And anytime you do that, it’s an opportunity. So there should be no fear.

Arroyo: David, your title, chief marketing officer, is a little unique in this industry. Is it a reflection of this need to address this online push?

Pryor: That’s part of it. When we talk about educating consumers, it’s about generating content and it’s about creating ways for dealers and consumers to share their experiences with these products. And we’re just starting to kind of crack the surface on that, but it’s something we’re looking at. How do we enable it on our websites? How do we enable it in social media channels? And how do we enable it on dealer websites? These are all places customers are going before the purchase, and we want to lower as many barriers as we can so they walk into the F&I office and they’re educated, they’re knowledgeable, and so they’ll buy more.

Arroyo: I’ve always wondered why we’re not using some of these great objection-handling lines or techniques as the basis for some of this content. They’re all designed to build value, to make that product mean something to the customer’s situation. So, to the rest of the panel, what discussions are taking place in your offices about this online marketing stuff?

Blochowiak: We’re really making a push to make it more, as you said, objection-overcoming or really just creating a need. Because if you just list information, that’s all it becomes. But if there’s a picture of a car broken down on the side of the road, that becomes real and that helps create the need for the product.

Oltman: The other thing is, and I know David knows this, you have to know what the dealer’s business plan is, how they market online, what they can stomach, and what they can’t. Once you know that, then you become a partner with them and then it’s all about the people in the store. Because, ultimately, they’re the ones who are going to make it happen.

Arroyo: But what about F&I product pricing? Should we go that far?

Blochowiak: I think you can. And what it could ultimately do is create MSRP-type pricing for our products. Or it could create per-month pricing for the products online. So if you’re advertising a certain car for $399 a month for 60 months and here are your disclaimers, well, you could tack on a service contract for $27 a month or something like that. I think that’s understandable to the consumer.

Oltman: But if you’re going to price online, everybody in the dealership needs to know that price. And there has to be a business plan. So, once again, it’s training and education, because there’s a whole lot more involved than just transparency.

Arroyo: Do you think Millennials will be good F&I product buyers?

Oltman: I definitely think so. I was talking about this with one of my teammates. We both have older children, and they’ve been brought up where every time we bought them anything electronic, we always bought a service contract with it. So they don’t know anything different. So I think Millennials are going to be huge buyers of products.

Pryor: I read something recently that said Millennials are the most protected generation that we’ve ever had. I mean, they all wear bike helmets and they all wear helmets skiing — things that you would have gotten you laughed at when I was growing up. So I think Millennials will be as good as or better than today’s buyers of our products.

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EFG Companies and F&I Express Expand Digital Solutions for Automotive Dealerships


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance Program, and F&I Express, the largest automotive F&I aftermarket product network, announced today a partnership to better serve their dealership clients by fully integrating their eContracting capabilities.

“At EFG Companies, we understand that no two dealers are the same,” said John Pappanastos, President and CEO of EFG Companies. “Each dealer operates with different goals, success metrics, and systems, and we pride ourselves in acting as a strategic partner in their success. In our effort to further that initiative, we partnered with F&I Express to augment our growing list of e-contracting solutions with one of the most utilized eContracting platforms in the market.”

“For almost 40 years, EFG Companies has been leading innovation within the automotive industry,” said Brian Reed, President and CEO of F&I Express. “We have been eagerly anticipating their addition to our F&I eContracting network and look forward to bringing their products to our dealer customers.”

Currently, F&I Express works with many auto retailers across the U.S. to improve F&I processes. The company has aggregated a network of more than 100 automotive aftermarket insurance providers in an online portal accessible by its dealers.

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Mike Burgiss to Discuss ‘Next-Level’ F&I Sales at Agent Summit


LAS VEGAS — Organizers of Agent Summit have announced that MakeMyDeal’s Mike Burgiss will present “Next-Level Product Sales” at the 2016 event, scheduled for May 9–11 at the Venetian Palazzo Las Vegas.

“Those who know Mike Burgiss know he is at the leading edge of F&I product sales,” said David Gesualdo, show chair and publisher of Agent Entrepreneur and F&I and Showroom. “Agents and dealers who fail to stay abreast of the latest advances risk losing opportunities.”

Burgiss’ presentation will focus on protection-product sales in the dealership as well as with customers who wish to complete all or part of the F&I transaction at home or their place of business, online or by phone. He will also discuss new technology designed to maintain or improve production as car buyers’ preferences and demands continue to evolve.

“The opportunity for dealers to build a consumer’s intent to purchase F&I products is greater than it’s ever been, and delivering a modern and efficient experience in the business office is the perfect complement to a strong sales process,” Burgiss said. “Dealers and agents that adopt an online and digital mindset for F&I will continue to grow their businesses faster and stronger than the competition.”

Registration for Agent Summit is now open at the event’s website as well as by phone, fax and email. Attendees who register by April 4 will enjoy a $100 discount. To inquire about sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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Agents and the Rise of the Digital Consumer


In the early 2000s, new technology and an innovative process were introduced to the automotive marketplace in the form of the F&I sales menu. The menu was initially met with a fair degree of skepticism by dealerships, but today’s menu-based process is accepted as the most effective way to sell F&I products. And from a regulatory perspective, menus are perceived to be the most compliant approach because they can offer every product to every customer in a flexible package.

The evolution of F&I sales has been a leading topic of discussion for many years. Questions have been raised regarding where the F&I conversation should start with the customer, how the process continues in the F&I office and whether information about F&I products should be featured on dealer and third-party websites. Much like the introduction of the menu, the prospect of change has generated doubts and hesitancy. However, the conversation should actually be focused on what online F&I really means and how the transition can be implemented.

The industry has been preparing to move more of the F&I process online, and the proof is the buzz generated at automotive events. At the Industry Summit in Las Vegas this past September, online F&I was the topic of several panels and was mentioned in a number of the presentations. It is recognized by many that regardless of what the F&I industry wants, the customers of today want more information about F&I products earlier in the process and this includes transparency on pricing.

Online F&I Defined

So what does online F&I really mean? And, more importantly, will moving F&I online mean the end of the traditional F&I office and F&I manager? Absolutely not. We believe the traditional F&I manager will be here for a long time to come. However, the F&I process and role within the dealership will need to transform over time. What will this digital transformation mean for the automotive industry and in particular to agents and providers?

First, there will be more customer research completed regarding F&I products before the customer even sets foot on the lot. The most critical step of moving F&I forward in the buying process is the customer education on F&I products during the initial shopping journey. This will take place either on the dealer’s website or on a third-party website, which will enhance the overall customer F&I experience by allowing them to inform themselves on F&I products in their own time. The dealer’s F&I website should not be a link off the homepage; it should be imbedded content specific to the dealers’ F&I products sold on the vehicle detail page (VDP) with pricing related to each specific vehicle.

Why is education so important? Recent surveys have indicated that the overall accuracy of awareness of F&I products by customers is relatively low. In today’s world of the Internet and Google, it is hard to name any other product in any category where it is so difficult to find good product information. And even if product information is available online, typically, the product pricing is not addressed.

The Big Three

There are several critical components of the online customer experience for F&I that will need to be developed and advanced as analytical data tells dealers what process, experience and content maximizes product sales for the F&I office. Specifically, the F&I industry will need to focus on three things: digital marketing content, consistent online and onsite processes and online pricing.

1. Digital Marketing Content

Most F&I product providers create sales brochures for their dealers’ F&I departments. There is some digital content available today for dealers who choose to offer a customer-facing tablet menu. However, dealers who present educational videos and promotional digital marketing content for tablet menu presentations are more the exception than the rule. Moving automotive F&I providers toward the ongoing development of online content will require a digital renaissance for companies and agents who largely distribute F&I products to dealers.

In the long run, the benefits to the F&I providers will be tremendous. The ability to move the focus from print to digital content will reduce overall marketing expenses by minimizing or eliminating print, storage and distribution costs. Better yet, creating digital marketing content will provide web analytics about what content creates the greatest customer engagement. Never before has an F&I provider been able to effectively manage creative content.

2. Consistent Online and Onsite Processes

It is also essential to have one process for all customers, whether they are on their computer or mobile device or at the dealership. As the Internet has evolved as a car-shopping tool, separate processes have been developed for Internet and in-store customers. But the majority of today’s shoppers start their process online and finish at the dealership. It’s important that the same information presented online is also available onsite.

Customers are more concerned with a streamlined process that saves time than they are with whether they are treated like an online or in-store customer. To them, the lines are blurred and irrelevant.

3. Online Pricing

That leads to pricing and how F&I products are presented. If you were exploring a dealer’s website and saw cars with no prices, what would you do? You would most likely leave that site and go look for another that has price information. The same applies to F&I products. If customers are going to be offered product information online, they also need pricing information — ideally, converted into a monthly payment or payment range.

There are several key components that need to be taken into account when placing F&I product pricing online. The prices must have established margins set by the dealer on a product-by-product basis, even down to the coverage level, if needed. And the prices must be specific to the dealer, vehicle and F&I product provider. The electronic rating needs to happen behind the scenes. It needs to go out to the product provider, get the eligible plans and rates, match up with content specific to the product and coverage and then be presented to the customer within seconds.

The bottom line is that the ability for dealers to offer online F&I as a part of the car-buying process is here. But it will require the industry to progress and develop the processes that are being brought on by the digital customer.

This advancement will result in many changes at the dealer level. It will also impact agents and product providers. There will always be a focus on how to effectively sell the products to customers at the dealership, but now it will be with customers who have started the education process while they were on their dealer’s website.

The agents who focus on helping the dealers with income development will need to help F&I professionals be better at bridging the online process with what happens in their office. The Internet has changed how customers shop for cars and now it will affect when and where F&I products are being sold to customers.

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