Tag Archive | "Rick McCormick"

AE Launches New Blog by Rick McCormick


TARPON SPRINGS, Fla. — Agent Entrepreneur announced the launch of “F&I Success,” a new blog authored by Rick McCormick, national account development manager for Reahard & Associates. The twice-monthly blog will focus on F&I training and best practices for independent general agents.

“Agents are asking for more advice on building and maintaining productive F&I development programs, and we are all too happy to oblige,” said Kate Spatafora, associate publisher of AE and P&A magazines. “Rick brings countless hours of F&I training and consulting and a genuine passion for helping customers to his writing, and we are proud to have him on board.”

A nationally recognized F&I trainer and ordained minister, McCormick has made numerous appearances at Agent Summit and Industry Summit and contributed articles to Agent Entrepreneur, F&I and Showroom and Auto Dealer Today, among other industry publications.

“There has never been a time when the relationship between the agent and the dealer has been more critical,” McCormick said. “Agents are uniquely positioned to provide training options for their dealers that will lead to higher profits and customer satisfaction levels simultaneously. I count this as a privilege to speak directly to the agent community to help them help their dealers!”

The first entry in the “F&I Success” blog will appear Monday, Nov. 7, at ae-emagazine.com. To catch all the latest news and features for independent general agents, including “F&I Success,” click here to get your free qualified subscription to Agent Entrepreneur magazine and monthly enewsletter.

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The Five ‘T’s of the F&I Process


The general agent is tasked with assisting dealers on two distinct levels: The first responsibility is to help each dealership develop a profitable sales process as it flows into and through the F&I office. The dealer needs to be assured that they have the right (1) people who are well-trained, a professional F&I (2) presentation, a customer-focused (3) process, quality (4) products that offer real customer value and fair and consistent (5) prices. Guiding a dealership to implement strategies focused on these five “P”s can yield higher profit and customer satisfaction levels.

While the five “P”s are fundamental to a successful and profitable dealership, the second focal point for agents is what actually happens once the customer is inside the F&I office. F&I managers that focus on the five “T”s of the F&I process are seeing record acceptance levels of products. Let’s examine each one individually and how it affects the desired end result.

1. Trust

Low levels of customer trust in the F&I process come at a high cost. The level of profit will rise and fall based on the level of trust established. Each part of the process must be filtered through the measure of whether it is building trust. When the F&I manager should first engage the customer, the wait time to get into the F&I office, utilization of an interview or more of a conversational uncovering of needs and, finally, how objections are overcome must all be evaluated in light of the new era of customer service in which we operate.

When the F&I manager is involved early in the transaction, they are viewed as adding value to it. Complete transparency throughout the process causes the customer to open up and share freely when questions are asked and a true and telling needs discovery process takes place.

Today’s sales environment demands we concentrate on getting the customer to open up early in the process rather than focusing our efforts on how to “close” them at the end. When high levels of trust are built it takes less effort and time to move customers to buy. Trust is the “holy grail”; it scores an 11 on a scale of importance of one to 10. Once we become a trusted advisor, we can help customers make good decisions about protecting themselves against future issues. Without a commitment to this foundational concept, maximum levels of production can never be reached.

2. Talk

Every great F&I professional I have ever met is a great listener! They have mastered the skill of talking 30% of the time and listening 70%. Knowing when to talk and when to listen paves the way to high levels of production. Effective use of questions and listening skills is necessary to uncover what each unique customer needs. The focus should be on helping customers, not selling customers. If you are trying to sell, you can go ahead and do most of the talking. However, if you are focused on helping customers you will listen much more than you talk and customers will buy more than you could ever sell them.

The secret to having a genuine conversation is to ask questions, and the quality of information received depends on the quality of the questions asked. The bigger secret is waiting for — and listening to — the answers! Customers don’t want to be talked at. They want to be heard. If the F&I manager has established a good measure of trust, the customer wants to talk and they are more apt to buy when they are talking than when the F&I manager is.

3. Transition

The most important part of the F&I process is how to re-engage the customer after they decline products the first time through and therefore how to transition the conversation back to the customer needs uncovered earlier. We have to make the customer want to talk more about the products. To do this we have to get them to ask us for more information.

We need to use statements that will make the customer “thirsty” for more information. For example, “That surprises me. You said something a few minutes ago that I never expected you to say,” or “That is unusual, especially since you are buying a vehicle built since 2010.” Either of these will make the customer curious to know more. More importantly, this turns the process around. We are now responding to a request for more information.

Great F&I managers use a variety of techniques. The one I hear most often is a direct statement, such as, “I am surprised you are not interested in the service contract.” While this may lead to more VSCs being sold, it also leads to low levels of packages being sold.

The bottom line is that even the best F&I managers can see an increase in overall production with a shift of focus. Make the effort to first turn the discussion around, not to sell a particular product, and you can sell more VSCs and packages.

4. Target

The effort to move a customer to buy a product/package must be targeted and personalized based on the unique needs of each customer. Today’s informed customer will not buy products because others buy them. It has to meet a specific need that they have or solve a future problem they can foresee happening.

Our task is to help the customer see how a future problem can be best handled by taking action today. When an F&I manager runs out of reasons the customer needs a product before the customer runs out of objections, an opportunity to sell that product and help a customer is lost. When the focus is on uncovering needs throughout the process, a more targeted effort is used to overcome customer objections and more customers buy!

5. Tell

Once the process is complete, it is imperative that the customer know everyone at the dealership is committed to making this the best ownership experience this customer has ever had. The F&I manager is in a strategic position to tell every customer the dealership is a resource for all their needs concerning the vehicle they just purchased. This continues the dealership message that we are there to help them not just sell them. This can develop loyal customers that are less likely to cancel any products they have just purchased.

Managing chargebacks is a result of building trust from beginning to end. Telling the trust-building story again as the customer finalizes their purchase enables them to leave with the confidence that they just purchased a great car from a great dealership. It’s a great story and great F&I mangers tell it well!

An F&I process that builds trust, has a balanced talk/listen ratio, transitions seamlessly after the initial no, utilizes a targeted response to overcome objections and ends by effectively telling the story of the dealerships commitment to a great ownership experience will produce record results. Profits and customer satisfaction levels will rise while chargebacks fall.

Some of the record numbers we are reading about are the result of great F&I professionals being open to the changes demanded by today’s more informed customer. They are adjusting their processes to be more targeted and build high levels of trust. The results have been amazing for them and will be for all that are willing to adjust and assure their process is focused on the five “T”s of F&I success!

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Meet the Trainer: Rick McCormick


From his days as a full-time, ordained minister to a second career as one of the nation’s leading F&I trainers, Rick McCormick has succeeded by always doing “the right thing the right way.” Agent Entrepreneur sat down with McCormick to learn more about his life and career and the moment he fell in love with the automotive industry.

How did you get your start in the auto industry and why did you specialize as a trainer?

I came from a diverse background and entered the auto industry almost 16 years ago. I served as an ordained minister full-time for 20 years, and for most of those years, I worked another “full-time” job to afford to be able to do that! I always gravitated to selling and/or training in each position. After multiple family moves, we determined in order to stay in one place long-term and I would serve in ministry part time and then find stable employment.

So I walked into a car dealership to find a temporary position. I fell in love with the challenge of helping customers. Then I was provided the opportunity to move into the F&I office. This story resonates with so many others I have met around the country. It’s easy to get into this business. And once you do, you fall in love with helping people and knowing the more you do, the more money you make! So I have been on this “temporary” job for 16 years now.

After spending five years in the F&I office, the only thing I could think of that would be more enjoyable would be helping others develop their skills and being part of their success. After a timely meeting with Ron Reahard, I knew not only that training was a place I wanted to serve but the core principles of his perspective on this business were aligned with mine. Simply put, always do the right thing the right way. I have had the privilege of working across the country with F&I managers to assist them in growing their skills and abilities, and I have seen many grow to places of influence and income levels they never thought possible. Nothing could be more fun than that!

What areas in F&I do you focus on with your training?

The focus is on results and growth. In the results arena, all a dealer has to do is look at the financial statement each month to see if the training is having an effect. However, placing the emphasis on results alone is not conducive to a long-term growth trend. The month-to-month activities of an F&I manager putting forth consistent efforts to increase skill sets and abilities will determine the results.

Focusing our efforts on their growth as a professional increases their product knowledge and confidence levels. Those are the roots that deliver a flourishing professional who offers a customer focused and comfortable process, making it easy for customers to buy the products available. The F&I process must add value to the customer’s purchase experience. It should be based on a needs-based approach that positions the F&I manager as a trusted advisor who provides consistent results. We work extensively to build that kind of process and that kind of F&I manager.

Why should an agent call you for a training assignment?

We become a trusted partner in the agent’s success. We are uniquely positioned in the industry because we don’t sell any F&I products. So we have the same agenda as our clients: to help F&I managers help more customers. This has allowed Reahard & Associates to work with agents, finance companies, product vendors, vehicle manufacturers, dealer associations and individual dealers, as well as some of the largest dealer groups in the country. We provide cutting-edge techniques and a growth-based effort that will make each F&I professional more effective.

What are the top three messages you try to give at each of your training sessions?

First, we challenge F&I professionals to work on developing and improving their individual skills. Great F&I professionals consistently look for areas where they can improve. You never graduate from the school of growth. My goal is to ensure that every training session is a growth session.

Second, we work to ensure a consistent process is used that builds trust with every customer. Techniques that don’t build trust must be altered. The level of profit and customer satisfaction rise and fall on the level of trust built with each customer.

Finally, each F&I professional should be a team builder. F&I managers are in a strategic position and have been entrusted with the opportunity to interact with almost every part of the dealership experience. We work on their interaction with other departments and how to positively impact the overall process in the store. Great F&I managers help build great teams!

What changes in the industry do you foresee that will impact your training the most over the next few years?

A huge shift will come from more of the selling process moving to an online format. We must embrace the technology that can provide a quicker and more efficient process. Embracing technology necessitates we engage the customer online with F&I information concerning financing, products, and pricing. We are developing tools to enable this transition as we speak.

However, the products must still be sold and the customer’s need for them must still be uncovered. As a result, the focus will continue to be helping the customer get the products they need and the financing that is most beneficial for them. Customers have always driven change in our methods. We will lead F&I managers to embrace the change and continue growing their skills.

Tell us about yourself and the kind of activities, hobbies, interests you pursue outside of training.

My free time is spent with my family. From the patient wife who embraces my frequent travel to pursue my passion to the five grandchildren who challenge me for more ways to have fun with them. Whatever interests them, interests me! My most enduring memories have come from time with them. I also enjoy reading autobiographies and personal growth books. And if the Atlanta Braves are televised or the Tennessee Volunteers football team is winning, I can probably be found in front of the big screen watching.

This industry has been good to me and provides great opportunities daily. And when I come home, I have a great family to spend time with. What else could a man ask for? Here’s to a great finish to the year!

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New vs Used Customers – Identifying Their F&I Hot Button


We have seen major shifts in customer buying behavior since the great recession. In fact we have realistically seen more changes in their buying habits in the last five years than we have in the previous 25! One of the major shifts has been a record in the length of the average loan with a 27.62% increase of new car buyers going 73+ months during the first quarter of 2014 as compared to the same period in 2013. The used car buyer saw an increase of 25.73%. Consumers have spoken loud and clear as they recovery personally from a downturn in income and/or confidence in today’s economy. They still love their cars and are willing to stretch out their loans to have the vehicle they want.

  New Car Buyer Used Car Buyer
Average Credit Score 714 641
Average Loan Terms 66 61
Increase in 73+ Month Financing 27.62% 25.73%
Loans made with Credit Union 9.26% 20.84%
Average Amount Financed $27,612 $17,927

Secondly, we have seen upbeat projections of new car sales for 2014 from 16 – 17.5 million units. The consumers hunger for the technology that is flooding every new car category rivals that of their hunger for the newest technology in computers and cell phones. Couple these two factors and we are having customers show up in our F&I offices with more needs than ever for the products we offer. Helping customers see their need clearly with an interactive and engaging process can lead to some of the healthiest profits we have seen. F&I managers cannot adhere to a one-size fits all strategy but must develop their ability to uncover the unique motivations, needs and buying factors of each customer and the vehicle they are buying.

Let’s take a look at some of the “Hot Buttons” of the new car buyer. The desire for the newest technology available is one of the most compelling motivating factors for many consumers to buy a new vehicle. J.D Powers disclosed that 79% of those surveyed recently expressed interest in “blind spot technology” on the next car they purchase. J.D Powers also provided research that shows an increase of 24% in overall reliability for the time period 2006-2012. However they also saw an increase of 45% in issues with “in-vehicle technology” during that same time-frame.

Recent announcements of technology coming soon to a vehicle near you are almost too rapid to keep up with. In about two years, an all-new 2017 Cadillac vehicle will offer customers an advanced driver assist technology called “Super Cruise” and in the same timeframe the 2017 Cadillac CTS will be enabled with vehicle-to-vehicle (V2V) communication technology. Also the recent YouTube video of the “Empty Car Convey” by Hyundai where a vehicle’s technology capability is on display which can literally drive and stop itself tells us the future is here!

Here are just a few of the latest vehicle technologies:

• BLIS – Blind Spot Information System • Forward Collision Warning
• Lane Departure Warning • Adaptive Cruise Control
• Lane Assist • Voice Activation System
• Rear View Cameras • Reverse Sensing System
• Rear Cross-Traffic Alert • Panic Brake Assist

Therefore the needs for a service contract are greater than ever. This is fueling record service contract sales in many dealerships. However there must be an intentional effort and process to move the customer to buy. Simply telling a customer “there is a lot more technology on this car” is not likely to change a customer’s mind concerning protecting themselves with a vehicle service contract. The process must make the vehicle service contract come alive by making this intangible product, tangible to the customer.

I have never met an F&I manager who consistently reaches top levels of service contract sales who doesn’t use an interactive process that employs tangible items to bring the product alive. Verbal efforts alone make it simple for the customer to disagree with what was “said.” Don’t talk about the high level of technology on vehicles today; hand them an engine control unit. Comparing an old owner’s manual with a new version that’s three to four times thicker is a great way to demonstrate how much technology is packed into today’s vehicles. When today’s customer hears a verbal response to why they should consider a service contract, their thoughts are shouting one response loud and clear. . . Prove it! Making invisible objects become visible is not the work of a magician; it’s the work of a great F&I manager and it has never been more needed than it is in today’s F&I office! I have seen F&I professionals across the nation who capitalize on the technology acceleration on vehicles today reach record levels of production and many have seen their career best numbers as a result!

Another major “Hot Button” for the new car buyer is to keep their car looking like new. With the new “normal” of keeping the car longer, the desire to protect the appearance both inside and out has taken on greater importance. Appearance or environmental protection products are not new. However the changes in the vehicle being protected have been enormous. One of the major key’s to selling appearance products is to “sell the difference.” This demands an F&I manager who is committed to learning the make-up of metallic paint versus pearl coat paints and how they are applied.

Here are just a few of the recent changes in vehicles and the products to protect them:

• Body Side Moldings Eliminated • Dent and Ding Protection
• New Generation Thermo-Set Enamel Paints • Exterior-Interior Protection
• Alloy Wheels Replace Metal Wheels • Road Hazard Protection

Today’s paints are much more advanced than their predecessors. They are thermo-set enamels and are applied by a water-borne process. The manufacturer bakes on the paint at 250-400 degrees. This can’t be duplicated at the dealership so the process to re-paint a vehicle takes more time and matching the mixture of special flakes to create a pearl coat and/or metallic paint is costly. However if the customer does not know how the paint has changed, they will not perceive value in the product offered to protect it.

To effectively build the value of these products and enable the customer to see how it will benefit them takes an educated and intentional effort. Using an effort to push and pressure a customer to purchase these products will only create resistance and bad CSI scores. Yet if the F&I professional is not educated on the differences of the paint on a vehicle today and other appearance factors, they will find the push technique the only thing they are left with. F&I managers must educate and inform to be successful, not push or pressure a customer to buy. That demands intentional effort to become an expert on today’s vehicle paint. The new car customer is looking for three things in any environmental protection product. (1) Save me time, (2) Save me money, and (3) Guard my trade in value. The advanced protection products offered today are true surface science at its best and are backed by three to five years of guaranteed protection. They provide a protective shield on the exterior and interior of today’s vehicles and when it is time to trade in this vehicle, it will have a heads up on competing vehicles of the same age and miles. That alone can make the protection products valuable.

Another “Hot Button” for new car customers is the need to protect the factory installed windshield. The factory seal on the windshield is difficult to duplicate so a product that keeps the original one in place is valuable. Again it is imperative that the F&I manager has acquired the product knowledge necessary to educate and inform the customer to move more customers to buy. The windshield provides 50-75% of the structural integrity of the vehicle in a roll-over accident and it can prevent collapse of roof and protect passengers from major injury. The passenger airbag deploys against the windshield at 200 MPH and the original seal becomes a life saver and may keep the passenger inside the vehicle in the event of a collision. Improved safety is a major consideration that moves a customer from buying a used to a new one. When presenting a windshield protection product, the main focus should be on safety.

Now the used car buyer has unique needs and expectations and forming a process and products specifically tailored to them is critical for success. Used car buyers are usually in one of two categories. The first is the low mileage used car buyer. They are looking for a used car price and new car appearance and performance. The effort of selling F&I products to this customer is similar to that of the new car buyer since they perceive they are buying a “like new” vehicle.

Changing the names of the products can show the targeted benefits they can provide for every used car buyer and build perceived value. The service contract becomes the Pre-Owned Performance Plan. Windshield protection becomes Driver’s Care, and tire and wheel road hazard protection becomes Emergency Care. The product line-up must meet the unique challenges of the used car buyer. If you haven’t changed your product line-up on used cars in the last 12 months you are behind the market demands and it is costing you money!

The high mileage used car buyer is the most challenging to the F&I manager’s efforts. A high mileage service contract is no longer an option. Plans that will cover the customer for 12,000-24,000 are key to provide coverage for the initial ownership period. Every vehicle, regardless of the age or miles, can face an emergency that would leave the customer stranded without assistance on the side of the road. So a tire and wheel or more effectively named Emergency Care product is valuable to this customer and should be presented with conviction.

The most important “Hot Button” with every customer is why they need the product! Helping the customer see their need for the product offered takes an intentional effort that is backed by exceptional product knowledge.

The number one differentiator in the F&I office is the ability to focus! The majority of production issues are not a skill issue but a lack of focus. Wherever your focus is that is where your energy and creativity go! To be successful in today’s F&I environment you must be focused on personal development through consistent training and practice. All professionals practice and top producers consistently evaluate their production and look for ways to improve. Today’s car buying market provides multiple challenges. However, I don’t hear the top performers complaining. Instead they are practicing and strategizing on ways to improve and provide more desirable products to every buyer – both new and used.

I grew up watching Hank Aaron play baseball. My father would take my friends and me early to watch him take batting practice and try and catch a home run ball. We noticed some players would “skip” batting practice occasionally. However we never saw Hank Aaron skip practicing before a game. That taught me that the difference between good baseball players and legends of the game is consistent practice. It is true in professional sports and it is true in the F&I office! Building an F&I team that is committed to consistent practicing of their skills is critical to keep everyone sharp and ready to help customers. So let’s build that kind of a team in our markets. Now go practice!

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Tire and Wheel is Strong and Getting Stronger


Tire and wheel road-hazard protection has become one of the fastest-growing products provided in the F&I office. While there are a few isolated areas of the country that have endured high increases in the cost of this product, for most it is a great profit opportunity for the dealer, and a great value for the customer. That’s a recipe for success.

There are three trends fueling this growth.

1. The evolution of the type of tires and wheels on today’s vehicles.
Customers are demanding wheels that enhance the look of the vehicle. The manufacturers have responded with alloy wheels that are bigger and more costly to replace if damaged. The larger wheels are complemented by low-profile tires. Both factors have produced a tire and wheel that are more susceptible to damage. Tires are the contact point of the vehicle with the road and are purposely excluded from almost all manufacturers’ warranty coverage. This provides for a level of risk to the customer and genuine need for protection.

2. The bundle.
Many providers are bundling products that are attractive to customers, which is driving acceptance levels. An example would be tire and wheel together with paintless dent repair, windshield protection, key replacement and roadside assistance on import vehicles that do not provide this, along with the other factory coverages. We live in a “bundle” retail environment and there is a perceived value with customers when they are presented products in this manner, as opposed to a long list of individual products. It’s how they buy fast food, cell phone service, Internet and cable/satellite television service — and it is a preferred way to buy protection on their vehicle.

3. Training, training and more training.
Technology has provided fast menu options that are integrated with DMS systems. Many come with pre-loaded videos to illustrate the value of the coverage. However, these offerings have not driven acceptance levels. Today’s F&I manager must be prepared to provide the cost to replace a tire and/or wheel on the vehicle the customer is buying to show the level of exposure. F&I managers lose credibility if they tell a customer the cost of replacing a tire and wheel on the vehicle they are buying is “around $600.” However, if they are told “the cost would be $183 for the tire and $378 for the wheel for a total of $561,” that tells the customer you know what you are talking about and makes the likelihood of selling the product go up dramatically.

An interactive process that discovers why that particular customer needs the coverage — and the ability to match that to the benefit provided — will always lead to more sales. Does the vehicle being purchased have a full-size spare? Does the vehicle have run-flat tires, and how does that affect the cost of replacement? What is the series of the tire? All these are questions the F&I manager must know the answer to for the vehicles they offer. This requires consistent training and follow-up to assure that a fact-filled, needs-based process is being used to sell the product. Technology, menus and videos do not sell F&I products — well-trained F&I professionals do.

All products have life cycles, and tire and wheel road-hazard protection is still young by comparison. It provides needed coverage at a value-based price to the customer and is providing good profit levels for dealers. Bottom line, it is a great product that is a strong performer and is still growing stronger everyday. The key is to train the F&I manager to utilize a needs-based sales process and have a level of product knowledge that will drive sales. Now let’s get busy helping customers make good buying decisions!

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