Tag Archive | "training"

Don’t Let Leasing Put a Dent in Appearance Protection


As reported in a June 2016 Automotive News article, “Leasing made up an all-time high of 31.1% of new-vehicle transactions — including cash deals — in the quarter, compared with 26.7% a year earlier.” To put that in perspective, in 2009 it was about 12%. That’s great for the leasing office but not so great for the F&I office, as most lease agreements include maintenance coverage.

So how can independent agents and their dealer clients make up that lost revenue? One proven option is to sell appearance protection coverage.

Appearance protection plans have evolved considerably in the past 10 years. Mobilized, consolidated service providers, using specially trained technicians capable of performing multiple types of repairs, offer dealerships new levels of efficiency and capability that translate to more revenue and peace of mind for the dealership, and happier customers.

Today’s tiered appearance plans, including those offered by my company and others, give F&I managers the option to present choices to their customers, bundling different types of appearance repair services. Such plans include paintless dent repair (PDR) at the baseline but also include wheel repair, bumper repair, windshield repair and repairs of interior rips, tears and burns. The dings and dents acquired while parked in a parking lot is a fairly universal risk, so PDR is a starting point. But identifying customers who also, for example, often travel on highways and can benefit from a windshield repair plan coupled with PDR, presents an upselling opportunity that wasn’t available a few years ago.

The selling opportunities for appearance plans span all car sales, not just leasing. For new cars and pre-owned sales, consumers want their vehicles to look great. A great-looking vehicle brings better resale value — a factor critical to both the consumer and dealer. Most plans provide warranty coverage where the factory does not. Kelly Blue Book and NADA guides both address the importance of appearance to resale value. Plus, for pre-owned, some plans feature no age or mileage restrictions.

Yet with all of these great improvements and opportunities for selling appearance plans in the F&I office, penetration rates are only slowly improving year to year. The following tips for selling appearance plans may help you change that:

1. The 100% Rule

The customer often doesn’t see a benefit with many programs, so making a personal connection by communicating typical risk scenarios is important. “Have you ever had a major mechanical breakdown? Had a car stolen? Had a ding, windshield chip or scraped wheel? Lost a set of keys?” By going through the list, you’ll find that 100% of customers will acknowledge a need based on their individual experiences with car ownership, and will know they’ll get a benefit from the plan.

2. Planting the Seed

By using a few good interview questions that target specific coverages of an appearance protection plan, customers will envision scenarios that make a plan favorable. “Isn’t it nice to drive a vehicle that feels showroom-new?” “Do you know what the manufacturer’s warranty is on minor cosmetic damage?” “Have you noticed how parking spaces everywhere seem to be getting smaller?” “Have you ever had a shopping cart or car door ding your vehicle?” “Have you ever caught the curb with your wheel while parallel parking?”

3. Thought Tracks

“Thought tracks,” or visuals and analogies, provide a perspective that may awaken desire in customers. One of the more successful props I use is a light metal water bottle. I hit it against the desk to illustrate how cars today dent more easily because they’re made of thinner steel or aluminum. When discussing vehicle trade-in, reference the KBB/ NADA guide, or use a unique picture of trade-in vehicle with damage. Use a cellphone as an example: Most car buyers have a case to protect their expensive phone from damage.

4. Package Presentation and Increasing Product Penetration

The same customer you’re selling paint and fabric protection to is also likely to buy ding and dent coverage, and maybe more. And the opposite applies — if they buy ding and dent, they’ll likely buy paint and fabric. I’ve seen many examples of an F&I manager having paint and fabric on all five levels of the menu, but they have ding and dent on only two levels. This is a missed opportunity. They should always be offered together because it’s the same customer for each program. It’s in their buying DNA, so to speak.

The current leasing market presents one great opportunity for selling appearance protection. Should that market plateau, new and pre-owned will continue to offer revenue opportunities. Appearance protection can keep your clients’ and your revenue numbers looking flawless.

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EasyCare Appoints Carl Grane as Director of Training


NORCROSS, Ga. – EasyCare is excited to welcome Carl Grane as their new Director of Training. Grane brings with him over 28 years of experience in consulting, training and management in both the automotive and financial industries. In his new role, Carl will spearhead the development and execution of new advanced finance, sales and service training programs – in addition to refining the company’s overall training strategy – for EasyCare’s internal employees, agents and dealers.

Grane and his team are working on developing a blended learning approach, taking EasyCare’s world-class training materials, comprehensively updating them and funneling them through a variety of learning channels, including group seminars, webinars, virtual video, and in dealership live training.

“There is tremendous opportunity here – EasyCare has a wealth of training platforms and a driven team that has execution down to a science,” said Grane. “Our goal is to couple proven traditional methods with today’s leading technology programs, based on individual client and dealer needs, so they can drive their business to its full potential. I am thrilled about the positive impact we’ll have and that I get to be a part of it.”

Grane comes to EasyCare from American Financial & Automotive Services, where he served as Dealership Development Manager for three years. Prior positions include Director of Associate Development for World Class Automotive Group, and District Sales Manager and Manager of Training/Development for Gulf States Financial Services Group, among others.

“With such a strong background and work ethic, we’re thrilled to have Carl on the team,” said Penn, Vice President, Business Performance for EasyCare. “His expertise will further enhance our ability to help drive execution and performance at every dealership level.”

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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, 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 Tuesday, Nov. 8, 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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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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Agents and Training: The Five Ps


I have been honored for the past several years to serve as master of ceremonies at Agent Summit. This event proves, on an annual basis, how important agents are to dealership profitability, customer satisfaction and repeat and referral business. At this year’s event, I had the opportunity to take off my emcee hat (for a few minutes, at least) and put on my moderator hat for a panel discussion we called “Training Points of Impact.”

I was joined by Craig Almon, a partner at PRO Consulting, and Greg Gomer, president and owner of Finance Solutions LLC. Anyone who has attended Agent Summit knows that it draws a very focused group of agents and agent principals, and our audience was no exception. We covered quite a bit in the 45 minutes we were allotted, and the level of engagement agents demonstrated before, during and after our time together was truly inspiring.

It is clear to me from my work with agents and dealers around the country that there is an unlimited demand for effective training that maximizes production in the F&I office without sacrificing the dealer’s net-dollar profit opportunity — that is, F&I income after deducting claims, chargebacks and, quite frankly, the amount paid to the F&I manager (although I prefer the term “financial services manager” or “FSM”).

Let’s discuss why agents should be interested in training, how to be sure your program will pay dividends, and how to select the training partner if you are in need of one.

  1. Your Interest in Training

You may already be familiar with the so-called “Five ‘P’s” of dealer profitability: people, process, programs, pay plans and performance. As an agent, you must realize that you can and should take responsibility for all five. Only then can you maximize your dealers’ income as well as your own.

Consider, if you will, the financial services manager’s duties. They can be divided into five distinct areas of responsibility:

  1. Compliance and ethics
  2. Sales
  3. Management
  4. Administration
  5. Financial function

Why is compliance and ethics No. 1 on my list? Because it’s the No. 1 hot-button topic in the industry today. Every dealer in America should elect a compliance officer and establish an in-house, effective and ongoing compliance management system. They must respect the relationship between F&I and the law, and their F&I producers must sell with integrity.

If you think these matters are the sole interest of the dealers themselves, think again. When the Consumer Financial Protection Bureau (CFPB) and other federal regulators look at an automotive retail and financial transaction, all involved parties are under the microscope.

I am no great fan of the CFPB’s methods, but I believe agents should acknowledge and even embrace this strange new reality. Let the onus of compliance fall equally upon your shoulders and those of your clients. Shared responsibilities are the foundation of a cohesive partnership. That’s why I think the agency model has been so successful and is growing exponentially.

  1. Your Training Program

Successful training programs are built around the aforementioned net-dollar profit opportunity and designed to benefit the dealer and the agent. But the big winner is the retail or lease customer. I like to refer to F&I products as part of the dealership’s “unique financial package,” because they are designed to protect the customer.

They do so in five ways:

  1. Protect the family budget: On a visit to a Nissan store in Tampa, Fla. I learned that, in the previous six months, that store’s average service contract claim was $802. Now imagine a customer financed the purchase of a vehicle for what they thought was a fixed monthly payment of $450. An unexpected repair would change it to a variable payment of $1,252.
  2. Protect the customer’s good credit: When unexpected, vehicle-related expenses crop up, the credit card comes out, because they have to be paid for somehow. When the car needs work, they have to have the car to get to work. They may have to rob Peter to pay Paul, and other bills might be paid late or not at all.
  3. Protect their investment in their purchase: Customers make down payments and then make monthly payments. At some point, they begin to build positive equity in the vehicle, and, sometime later, they own it outright. The dealer’s unique financial package ensures this time-honored process is not interrupted. If more FSMs were able to illustrate this concept to their customers, they would be shocked at the improvement in their own numbers.
  4. Protect their personal savings: Survey after survey reveals that the majority of U.S. households are not prepared to handle unexpected financial demands — including vehicle repairs — of as little as $500. A recent AAA study determined that tire and wheel repair is a $3 billion industry with an average claim amount of $300. Too close for comfort? You bet. And that’s just tire damage. How can car buyers be expected to put any money into savings — and leave it there — when their vehicles are unprotected?
  5. Protect the vehicle itself: F&I products are not free, but with low-rate financing, customers are getting protection with little or no finance charge.

Traditionally, the clearest path to creating opportunities to explain these benefits is the 300% rule: Offer 100% of your products to 100% of your customers 100% of the time. I prefer the 400% rule: I follow the 300% rule and add 100% legal and ethical compliance.

Selling with integrity will determine your profitability. Integrity requires strict adherence to a code of values. Profitability is a product of complete integrity. In your capacity as an agent, you have the opportunity to help your dealer develop a statement to which F&I producers (and customers, if you wish) can refer:

“Here at ABC Motors, our commitment is that every customer knows what they’re getting, they agree to buy it, they know why they need it, and they feel good about it when they leave our dealership.”

This mantra is effective because it fits into any store’s process. Individual dealers and F&I directors have varying opinions as to when and where the customer and FSM should meet, but one part of the experience is always the same. When the customer walks into the finance office, they do so with three questions in mind:

  1. Can I trust you?
  2. Are you credible?
  3. Do you care about my needs and my situation?

They may never ask these questions directly, but they’re all thinking it. Zig Ziglar once said that people don’t care what you know until they know that you care about them. I know you care about car buyers, so prove it! Build your training program around the customer’s needs and your profits will soar.

  1. Your Training Partner

Taking nothing away from those agencies that have developed and implemented their own training programs, I would like to remind you that companies like mine and many others are ready, willing and able to serve as a trusted ally in your mission to deliver quality training to your dealer clients.

Effective training partners should be equipped to offer multiple avenues to effect improvements in profitability and productivity:

  1. Offsite: Get your FSMs out of the store and into an offsite facility where they can rub shoulders with colleagues from other dealerships, other brands and, ideally, other parts of the country.
  2. In-store: At some point, you will want your training partner to deliver in-dealership training, coaching and development. They will take some of that theoretical, 30,000-foot content from the offsite training and apply it to the dealership’s culture.
  3. Online: Offsite and in-store training happens once a year, two or three times a year or, ideally, quarterly. Web-based training is available 24 hours a day, 365 days a year, and it is typically designed to reinforce the education and good habits acquired in the first two phases.

In my opinion, the first place an agent should look for a trainer is in the pages of this magazine and in F&I and Showroom. Read the articles and look for the message that resounds with you. Next, consider asking for a recommendation from your state dealer association. Finally, remember that dealers are members of 20 Groups, which often host trainers, so ask your dealers which trainers have inspired them.

Inspiration is a two-way street. Following one appearance at a 20 Group several years ago, a dealer told me, “Bob, I learned a long time ago that F&I gross is vanity and F&I net is sanity. Don’t tell me how much we’re putting up. Tell me how much we’re keeping.”

He was absolutely right. Dealers know that small changes in people, process, programs, pay plans and performance can be the difference between making money and maximizing their net-dollar profit opportunity. But they may not know how to execute those changes. You have the opportunity and ability to help dealers and car buyers take full advantage of the many benefits F&I products provide. I wish you the very best, as training is the key to dealership profitability, customer satisfaction, and repeat and referral business.

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Pop Quiz: Agent or Partner?


Are you an agent, a partner, or both? Before you answer, please complete this multiple-choice quiz: An agent is …

  1. just a vendor
  2. just a product salesperson
  3. an indispensable part of a dealer’s operation
  4. clueless

Before we check your answer, here’s an old lesson in marketing. In “The Marketing Mode” (1969) and “The Marketing Imagination” (1983), Prof. Theodore Levitt of the Harvard Business School set out to discover why people buy products. In both books, he quoted advertising expert Leo McGinneva, who said, “People spend their money not for goods and services, but to get the value satisfactions they believe are bestowed by what they are buying. They buy quarter-inch holes, not quarter-inch drills.”

The value your dealers see in you are not based on numbers alone. Let’s take a look at two ways agents make themselves invaluable to their clients.

1. Improving Vehicle Sales

As a trainer, I work with agencies of all size. Regardless of whether it’s a one-man show or a multistate operation, there are some common traits that separate highly successful agents from their mediocre competitors. The one that stands out for me is focus. You show me the agent’s primary focus and I’ll tell you how they answered the quiz.

Any agent can show a dealer numbers and compare service contract penetration rates. Typically, those agents are shown the door when a prettier reinsurance program comes along. Even if they visited the dealer often and sincerely meant well, their relationship is short-term.

Success is understanding that the questions are the answers. Simply put, the agents who uncover the dealer’s top priority — and then work with the dealer to formulate a plan to achieve maximum results — become true partners. So, if you had to guess, what is your dealer clients’ No. 1 priority?

  1. Make sure the agent’s products are sold.
  2. Beat his buddy dealer’s PVR.
  3. Sell and deliver vehicles.
  4. He doesn’t have one. He’s clueless.

Let’s say you’re the best agent on the planet. You sign a dealer and begin working with the F&I manager. Because you’re so good, the manager is soon at 50% penetration every month with every product. Now, what would happen if you took your focus away from your products and turned it toward the dealer and their desires?

The next logical department is the showroom. So let’s say you come up with some tips and training to work with the sales team and they pay off with 10 extra units the first month. Based on the aforementioned penetration rate, that’s five more sales for each of the F&I products you represent. What would that mean? To you, maybe a little, maybe a lot. But what do you think it would mean to the dealer? Well, he won’t be thanking you for the extra tire-and-wheel income. You’ll be a standout agent for helping sell more vehicles.

2. Cutting Costs

Another way to improve your value proposition is to help your dealers save money. Let’s say the dealer is using what I call a “celebrity” product — a desking tool, for example, that comes with robust software and an in-store training session with a “celebrity”-endorsed trainer. You soon learn that the tool, while somewhat effective, is costly.

In your travels, you discover that another client has a similar desking tool, but it also comes with a fully compliant menu and even has a CRM. Oh, and it comes with live, in-dealership training hosted by a top industry trainer. Best of all, it could save the dealer thousands. What would you do with that information?

Bear in mind that you don’t get paid anything just because your dealers use this software. Heck, you don’t even represent it. But what would the dealer think if you were able to save them thousands each and every month? Wouldn’t it be easier to recommend training for the finance manager with the money saved? Couldn’t the dealer pay for training for the sales team with the savings? And again, who does the dealer believe has a sincere interest in their success? What do you think that would do for you when the next agent comes along with a prettier brochure?

Remember, you’ll never convince a dealer to fear losing your products. But if your focus is right and you really partner with your dealers, you can make them fear losing you.

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