Tag Archive | "Relationships"

It’s All About the Relationships


In F&I, we tend to focus pretty heavily on the products. We sell the features and benefits to the consumers, and the profit margins to the dealers, and every provider of every product does its best to prove to agents and dealers alike that its offering is superior to all the rest. However, while it’s true that the product is incredibly important, it’s only half the story.

Just as critical, if not more so, are the relationships — between the F&I product provider and the agent, the agent and the dealer, the dealer and the consumer, and full circle back to the consumer and the F&I provider’s claims center. At every stage along the way to reaching the consumer, no product — no matter how great it is — will be sold if there isn’t a solid relationship built on trust and mutual respect backing it up.

Let’s take a look at each of these relationships and how they impact F&I.

1. Providers and Agents

Agents need to feel confident that the F&I provider’s products deliver what they promise, whether it’s about performance, longevity or any other feature. And when consumers call in with a claim, the agent has to believe that the provider will adjudicate the claim promptly and fairly, making the agent look good to the dealer, who in turn looks good to the customer. If something goes wrong along the way, agents have to trust that providers will back their products.

But that trust isn’t built overnight. It has to be established over time, through the actions the provider takes when asked to solve a problem or adjudicate a claim. It is strengthened when the provider returns calls, is responsive to suggestions and ideas, and follows through — delivering what was promised. It is the kind of trust that takes time to build, but can be shattered in an instant with one bad decision, one bad phone call, one bad claim response.

Let’s face it, many agents represent multiple providers. Each state has different laws and dealerships need different products for their specific customer base. It can be an arduous task to switch a dealership to a new provider, but when the agent gets wind of claims headaches the dealers are encountering, or a provider’s poor service leaves an agent with egg on their face, the decision becomes a no-brainer.

2. Agents and Dealers

The trust that agents have in their providers is then carried into the relationship with the dealers. While dealers are seeking popular, profitable products, the most successful agents focus just as much energy on service and follow-up. Dealers need to form the same kind of trust with their agents that the agents have with the providers: They need to know their end customers are going to be taken care of, because unhappy consumers don’t return to the dealership to buy more cars, and they certainly don’t invest in additional F&I products down the line.

The agent-dealer relationship is often built on personal connections, even more so than the agent-provider relationship. It is solidified over multiple in-person visits and follow-ups, until it becomes a partnership: Dealers tend to trust an individual agent whom they believe has their back. They trust their agents to bring the best products and providers to them — and to properly address any issues that arise. This is the kind of relationship that leads to more sales and better profits for everyone in the supply chain.

Since dealers are trusting agents to bring them the best, agents are staking their reputation on the products they recommend. As a result, trust in the F&I provider is again a key factor — and one frustrating claims call or a negative dealership report can send agents running to the competition.

3. Dealers and Consumers, and Back to Providers

While agents don’t directly impact the relationships dealers build with their customers, the reality is that agents do have a major hand in how the dealer-customer relationship progresses, since the products an agent encourages the dealer to offer can make or break the trust.

How many of us have heard horror stories about consumers purchasing F&I products and then getting the runaround when they try to make a claim? Customer complaints are almost never about the damage itself — the dent in the door, the key going missing or the stain in the upholstery — instead, complaints usually stem from the negative experience the consumer had when trying to get the coverage they thought they had purchased to pay for the damage. And that is where the trust collapses.

Oftentimes, dealers switch to a new F&I product provider because they can get a better price and everything seems great … until 6 to 8 months down the road, when claims start rolling in and the complaints come right behind them. Unhappy customers are going to blame the dealership for their troubles, whether the dealership was at fault or not. And the agent is the one who gets the heat from the dealer. The trust from end-to-end is shattered with a single bad experience.

The Most Important Connection

At the end of the day, it all comes down to the customer experience. The incident that spurs a customer to file a claim is often an already stressful scenario, and how the provider handles it can make or break every relationship along the way. If the customer experience is designed to be friendly, transparent and with a goal of paying the claim — as opposed to finding a loophole or having unreasonable exclusions to justify not paying it — then every relationship along the way is strengthened. The customer has faith in the dealer and is more likely to not only give them repeat business but to refer friends and family as well. Because the dealer trusts that the products will be backed the way they should be, the dealer is more likely to consider offering more products from the agent. And the agent is more willing to add additional products from a provider’s portfolio to their mix because they know, ultimately, it will bolster their own reputation.

Make sure your F&I provider has your back. Do they deliver what they promise? Do they answer the phone when you call, and do they return your calls promptly? If an issue arises, how does your provider address it? Are your dealers’ customers complaining about claims headaches, or does your F&I provider make your dealers’ customers feel good about their purchase? Is the focus on the immediate bottom line, or on the long-term profitability that comes with strong relationships?

Relationships are the heart of F&I. It doesn’t matter what the product category is, how much it costs or how good the penetration rate is — without the relationships to back it up, no one wins. It’s time to take a hard look at all of your relationships. Do you trust your providers? Have you done everything you can to bolster your connection with your dealers? If you want to improve product penetration and ultimately increase the profit margins across the board, your relationships are the best place to start.

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Climbing the Relationship Ladder


If you’ve read any of my previous articles, you know I’m a firm believer in the need to have a strong value proposition. In fact, when a dealer decides to do business with you, it usually means your value proposition was stronger than the incumbent or your competitor. An often overlooked element of a successful agent’s value proposition is the ability to accurately assess where his or her relationship is with the dealer at any given time, and knowing how to climb the relationship ladder.

The first rung of the relationship ladder is the vendor relationship. As a vendor, you are transactional, not relationship based. You are, in most cases, the low cost provider and your business is safe until someone else comes in with a lower price (and they always do). As a vendor, you do not have access to the leadership team and are not invited to attend any meetings that may take place. As a result, you have no understanding of their corporate strategy and, more importantly, no influence in any decisions that are made. In short, you are in a precarious situation.

The next rung up the relationship ladder is the consultant relationship. As a consultant, you have moved beyond simply providing a product or service to being a member of the team. Your work ethic and industry expertise has earned you the right to talk to the owner when necessary, and you do participate in dealership meetings. This access to the decision makers gives you the advantage of knowing what is going on in the dealership today and, more importantly, what the strategic direction for the future might look like. Your input may be sought on specific topics related to the role you are playing in the dealership – for example: performance development, pay plan structure, job descriptions, etc. This level of access may give you a heads up to future opportunities within the store, but you may still have to compete for them. At the consultant level you have a seat at the table; it’s just that the seat might not be permanent. The consultant level is obviously preferable to that of the vendor, but there is more work to do.

The third rung of the relationship ladder is the advisor relationship. As an advisor, you are now a trusted member of the leadership team. You regularly meet with the owners and participate in most operational meetings. You are viewed as the “go to” person for all things F&I. With this unfettered access, you know exactly where the organization is and where it wants to go. As new opportunities arise, your dealer partner looks for ways to send business your way. At the advisor level, you have earned your seat at the table. You are a part of the team, but you still haven’t reached the top rung of the relationship ladder.

The top rung of the relationship ladder is the personal relationship. At the top rung, not only do you enjoy all the benefits of the advisor relationship, but now your personal life and your business life with this dealer become intertwined. The conversations you engage in are not solely related to business issues. Your council may be sought on a variety of topics and you spend quality time outside the dealership with your dealer partner. Dinners, family vacations, boating, hunting, fishing – you name it. At the personal level you get to spend all this time with the dealer, but you don’t feel compelled to, nor are you asked to foot the bill. For obvious reasons, this level of relationship affords you the best protection from losing the business, and is the level you should strive for in all your accounts.

How strong can the personal relationship be? Several years ago, while working for another organization, I was involved in a deal trying to unseat an independent agent incumbent. We did the dog and pony show – we had a better price; we had a better product; we had more resources. In fact, we had a much stronger value proposition. What we didn’t have was the personal relationship. We found that with the incumbent agent having attained this highest level of relationship, having the best price, product and resources is not always enough to win the business. The dealership was unwilling to switch providers without ensuring that his “guy” was taken care of and included as part of the deal. While this might not be typical, it does illustrate the power and value of reaching this level.

So now what? First, I would suggest you perform an honest inventory of all of your accounts and identify where you are on the relationship ladder. Next, for the rest of the year, try to move up one rung.

In those stores where you are a vendor, go above and beyond what has been expected and earn the right to have access to the decision makers. Prove to them that you have their best interests in mind and bring them value.

In the stores where you think you are at the consultant level, look for ways to improve their business. Remember, their business is more than just the F&I operations. Look to add value in the fixed operations area, become a legal compliance guru and keep your partners up to speed on the activities of the CFPB. Remember if you want more, you have to do more.

In the stores where you think you have attained advisor status, test the waters to see if the possibility of moving to the personal relationship level exists. I mention this because it very likely you will not be able to get to a personal relationship with all of your accounts, and that is all right.

If you’ve been fortunate to reach the personal relationship level, do not take it for granted. Continue to give more than you receive and your business will be much stronger.

Remember, this job is a journey, not a destination.

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5 Ways to Balance Leadership and Parenthood


It seems to be common ideology nowadays that being the leader of a company and being a parent are mutually exclusive roles, and that just isn’t true, reports Entrepreneur. Although it can be difficult to strike a balance and be great at both, it is not impossible. All it takes is a little bit of strategizing and commitment. As the father of two young sons, 1 and 4 years old, and the CEO of a national sandwich chain, I’ve come across a few tips that have helped me balance the two roles:

1. Set your nonnegotiables and stick to them.

For example, I have set the rules that (1) I will never miss one of my children’s sporting events; (2) I will drop my kids off at school twice a week; and (3) I will wake up early enough to make and eat breakfast with my kids every day. On the days I am dropping them off at school, I come into the office late so that I can have that bonding time with my children in the car.

Setting these nonnegotiable items helps you to structure your schedule and make time to fulfill your role as a parent. Choose a few set things and make sure you fully commit to them, regardless of what work issue may come up. Once you start to let things slide, the entire purpose of setting these nonnegotiables has been lost.

2. Be cognizant that work can usually wait.

One thing I’ve learned in the years that I’ve been a CEO, is that work can usually wait. Letting work consume your life and infringe on the joys you get as a parent is unhealthy and a hindrance to producing great work. It’s important to take that time to breathe and focus on being a parent to your children. When I get home, I put away my phone until my kids go to bed and return emails and phone calls later on in the evening.

If something is a true emergency, my team knows how to get hold of me through channels other than email. The small window of time I get to spend with my kids at dinner and bedtime is incredibly valuable, and it’s perfectly fine to take off your work hat to put on your parent hat.

3. Privileges must be companywide.

If you expect your team to understand your priorities, whatever applies to you has to apply across the office. For example, our chief marketing officer works twice a week from home so that he can spend time with his kids. This applies to all Capriotti’s Sandwich Shop staff members: Their schedule can absolutely work around their roles as parents, as long as the bottom line is met and work is completed to our standards.

I let my team know that if any of them need to take time away from the office to be a parent, as I do, then they should take the time off. This policy not only creates a culture of support and understanding, but is consistent with our family-centered brand. Policies like these tend to help in retaining talent and creating an environment that fosters quality work.

4. Create small blocks of time that allow you to get away.

I will often spend my lunch break to see my boys at home; they are my absolute best friends. This practice gives me a brief block in the middle of the day where I can disconnect from work and focus on being a dad. Other ways professionals can do this include setting aside a time to call or video-chat with their children; whether that occurs every day or once a week, the objective is to establish a set time-frame and stick to it.

Work can get busy, but it’s not impossible to find those few minutes in the day where you can be a parent — calling home, for instance, while you’re en route to the restroom, getting your next cup of coffee or in your car — and not driving! — on the way to a meeting, to name just a few.

5. Don’t forget about your support system.

I am lucky enough to have an amazing wife who is incredible and supportive. She understands that work can get crazy at times and does all she can to lighten my load at home so I can focus on being a dad when I’m there. Now, while not everyone is fortunate enough to have that kind of support system in their house, that does not mean you can’t find it elsewhere. Consider working out a system with a neighbor, friend or colleague. It’s all about finding the support system that works best for you.

While juggling leadership and parenthood can be a daunting task, it is certainly achievable. All it takes is making a commitment to both roles. Finding the small ways to manage both can have an enormous impact not only on the quality of your life, but the quality of your children’s.

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