Tag Archive | "video recording"

An Agent’s Guide to Using Video Review

So as an agent, you are thinking of putting cameras into your stores. This may be because you have been to a recent conference and heard other agents extolling the virtues of such a program. Or your dealer just came back from a 20 group where someone said, “If you want to add $200 to you PVR, just put a camera in the F&I office!” Or maybe it’s just a decision to increase the level of service provided to your dealer clients.

I began using video in 2006. In those six years, I’ve come to believe that the camera is the most powerful training tool available to agents. However like any tool, if not used properly it will not perform or worse, may even cause more harm than good.

Here are six key steps to successfully using the camera.

1. Every Transaction Must Be Recorded. Period.

This sounds elementary, but surprisingly this may be the most difficult step. You will hear every reason imaginable for not recording. “It stopped working,” “It was a cash deal,” “They’re a previous customer who never buys anything,” “It’s a sub-prime deal”…

If you do not get the commitment or have the resolve to record every transaction, my recommendation is, do not put the cameras in at all! Why? Your time will be spent determining if the transaction should have been recorded and listening to all the reasons why a particular transaction was not captured. More importantly, your client may be put into possible class-action discrimination troubles. Anytime a dealership has one process for one set of customers, and different processes for a second set, the dealership may have lawyers examining the reasons why.

So how does an agent ensure that every transaction is recorded? By getting the dealer’s support. Plain and simple, if the dealer does not require that every transaction be captured; video review should not be an option. The dealer can support the process by providing an incentive for 100 percent of all transactions recorded. The dealer can also support the process by not paying commission on deals where the camera was not used. Either way, dealer support is needed to make sure every transaction is captured.

2. Watch the videos.

This was my biggest failure early on. I struggled getting the production out of one of our dealer groups. I recommended to the dealer that we put cameras in, at his expense. I told him that the results nationally were $200 per car, and that it would be a great investment! We put the cameras in and, after the first month, production really did not change. The only thing that did change was the dealer spent a bunch of money on hardware and software fees, upsetting many of his people in the process. Soon after, I lost the account.

One big reason the numbers usually go up after installing the camera is that the producers realize they now must follow the 300 percent rule (100 percent of the products to 100 percent of the people 100 percent of the time). When they realize someone is watching, they are more likely to present every product every time.

Watch at least four transactions per Financial Services Manager per month. If this is too much for you to do personally, hire a professional reviewing service from your provider, or hire someone at your agency to review the videos. Make sure the individual has rudimentary knowledge of the Financial Services process, this will make sure there is no disconnect on behalf of the reviewer.

3. Grade them.

Develop a grading system to use when reviewing each transaction. Be sure to include everything that you want to see accomplished during the transaction. I have attached a sample review sheet. I look for 12 accomplishments, broken into two categories, sales and compliance.

Download the F&I Review Sheet Download a PDF F&I Review Sheet Here »

The grading system should follow after the training system. For example, we train the producer to establish the need for each product and then show how the product solves the need. Notice how the grading system follows what we think makes for the best presentations.

After scoring the video, we compile all the scores, keeping them in a database for tracking.

4. Give feedback.

After completing the review sheet, give it back to the producer along with any words of praise and/or recommendations to improve. We have found it to be most effective to have the producer and dealer to sign-off on the feedback sheet.

Another very effective way to give feedback is to watch a producer’s transaction together. This way the producer themselves can see the areas they are the strongest in and should continue to do, and the areas they need improvement.

5. Hold review meetings.

This is most effective with clients that have more than one producer. At least one time per month, bring all the producers of the organization together to review transactions from the previous month. These should always be “highlights!” You want to praise the producers in public, train and correct in private.

In these meetings share with the other producers what is working, right within their own organization. These meeting should be no more than an hour, reviewing specific pertinent time frames of five to six transactions.

6. Use the videos.

Use the videos. Use them in training. Use them to share new closes. Use them to share compliance initiatives.

Videos can be a powerful tool in increasing PRU and making you a more viable asset in the dealerships you serve.

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Lights, Camera, Action! Training with Technology

There are only a few video recording devices available today for the dealership, among which is the SmartEye video system that IAS offers. It is being used by about 1,000 dealerships nationwide and has recorded over 1,000,000 transactions which saved dealers from a potential multitude of lawsuits. It is so important in this day and age to monitor and record sales transactions in the dealership. Not only does it allow for protection against potential costly lawsuits; it also provides internal or external F&I trainers with a bird’s eye view of what is actually happening in the F&I office.

There are two basic forms of video recording systems available for a dealership to use, standard and transaction-based.

Standard video systems are basically security systems – they record all day, every day. The challenge with these types of systems is if you want to go back to find a customer transaction, you must know the exact date and time in order to locate the event. And you certainly don’t have a way to locate transactions based on other deal criteria, such as whether or not a VSC was purchased.

Whereas with transaction-based video recording – video is date and time stamped and stored individually. Along with that video recording all sorts of other details are stored: who the F&I manager was, customer name, vehicle make and model, and which products were or were not purchased. All this information and more is stored in a web-based searchable database. The process starts with the F&I manager sitting at their desk using their own computer that is hooked up to a camera which records and archives these recordings to a centralized server – ours is located in Austin, Texas. This centralized server is accessible over the web by any number of video auditors. The point is that the people who review the videos don’t have to be in the dealership to do so. For example, remote trainers like Ron Reahard or Gil Van Over can use their authorized logins to review videos each and every day.

Deals can be located by customer information (name, stock number, deal number, F&I manager). But you can also locate videos by key F&I metrics. For example, a dealer might want to see a list of every customer who didn’t buy a service contract, or every customer who didn’t buy GAP. This way you can drill down and find out why the F&I manager was unable to quote the deal for those particular products. Lastly, you can locate by any number of custom fields which provides the dealer with the capability to track all sorts of information other than what has been mentioned.

Click to Enlarge
SmartEye Web Screenshot

Before and After Example

One of the benefits to utilizing a transactional-based video system is that you can find things that you normally would not be able to catch by non-video auditing techniques. These are things that all the training in the world wouldn’t help you identify. For example, I looked at an F&I manager whose dealership had the program installed for about six months. His presentation and closing techniques substantially improved, he executed the delivery of products as an expert would, handled objections with ease, and his confidence had increased substantially. These changes created a much more polished presentation and set the customer at ease. To be a little more specific, this F&I managers PRU went from $400 to $1,200 in just six months. His customers were extremely satisfied. His cancellations had decreased and he became the best F&I manager in the store.

Keys of Success

With any type of recording tool, there are obviously keys to success. You can’t just put a camera in an F&I office and expect that kind of jump in PRU immediately. The main keys to having a successful video recording system work as a training tool are as follows:

1. You must have a review and training plan. This is absolutely critical. Recording transactions just for legal compliance doesn’t mean that F&I will be compliant, and if you are recording transactions just in case there’s a lawsuit down the road, it’s certainly not a guarantee that the lawsuit won’t happen. Part of the review and training plan is determining who’s going to review it. Are you going to have someone in the store, a trainer, a general agent or someone similar do the training? What will they look for? And how you are going to follow-up with the F&I manager as part of this training plan?

2. Develop a plan to insure 100 percent utilization. You want to make sure that every customer who comes through the store is on video. There are basically two different ways to do that: reward F&I managers for utilizing or punish them for not utilizing.

So, first the review and training plan. Video recordings are not just there to protect the dealer, they are a perfect training aid. I think in most cases, when dealers first started implementing video, it was mostly about compliance and protection, but everyone was missing the concept of how important it was for training purposes.

When establishing a game plan, the dealer needs to look at what specific actions they are going to look for when reviewing videos. Specific expectations need to be set based on the experience the dealer expects their customers to have. Do you expect every single customer to go through the process exactly the same? You should! And you need to create a compliance report and have a grading system available to go through these videos. So, that means not just watching a video and thinking “hey, that looks pretty good.” You want to be able to go through and look at measurable items as part of each transaction. It needs to be quantifiable (yes, no, etc.), and it needs to be non-subjective. As far as who should review, we have some dealers where F&I managers review themselves and also review each other, we have F&I directors who do reviews, general agents and outside trainers. Next, determine the frequency of the video reviews and pick a manageable number. It takes time to watch these videos and, you don’t have to watch the “meet and greet,” but what is important is focusing on the menu presentation. Select a manageable number that you can watch each and every month per F&I manager and each F&I manager should have the same number of reviews regardless of whether they are running $1200 per car or not.

That leads right into the second part: the Utilization Plan. You have to make sure that the process is done on 100 percent of the transactions. Dealers can either reward for compliance or punish for non-compliance. An example of a reward that some dealers provide is giving bonuses based on the compliance rate (not PRU) determined from the video reviews. Other dealers do monthly manager meetings and point out excellent videos in front of their peers. There’s a lot a value to doing it that way.

As far as punishment, I have seen some dealers establish the “no video, no pay” policy. At least that’s the most common. If the F&I manager did 50 cars, but didn’t report video on 10 of them, those 10 don’t exist in their pay plan. Three strikes and you’re out is also common. That means, three videos not recorded and you are done. And just as it’s done for rewarding F&I managers, you can also show these to the group in weekly or monthly meetings. This technique might be effective, but can also come across as overly negative if not handled properly.

All video recording systems, provide F&I directors or general agents with statistics on usage. For example, SmartEye sends daily emails and offers reports on demand that allow you to compare the number of deals recorded versus the number of deals that occurred in the store.

Legal Concerns and Litigation History Regarding Video Recording

The first legal concern is not whether or not you can use video, but exactly how that needs to be disclosed to the customer. And the answer depends on the state you are conducting business in. The laws that govern audio recording are state, not federal, and each state falls into one of two categories: “One party” or “Two party.” There are several states in the United States that are what we call “Two party” states. (For a clear definition of consent you may want to reference http://www.rcfp.org/can-we-tape/consent-and-its-limits.) Generally speaking, in these states both parties involved in the transaction need to know they are being recorded. So you can post a sign, tell the customer they are being video recorded on video, and/or have the customer sign a form stating they are aware they are being recorded. Any of these ways satisfy the “Two party” rule.

Every other state is a “One party” state, meaning that only one person needs to know, and of course the F&I manager knows because they are the ones who start the recording. So every state in the nation can legally be recorded. It’s just a matter of how you want to disclose it.

What we recommend across the board is that every dealer post a sign stating something like “Our dealership records each transaction for quality assurance and for training purposes.” We also recommend that we get the disclosure of the recording audibly when the customer walks in, “Mr. Customer, it’s nice to meet you. We record each transaction for quality assurance (etc.) and there’s the camera up there.” Not once has the customer ever said, “No, I don’t want to be recorded.”

The second legal question is whether or not you should record? Only if you follow the keys to success. If you are going to put a camera in the F&I office and never watch the videos unless a problem occurs, I would not recommend it. Even though that doesn’t help me or any other provider of video technology, I would not recommend people record without following the keys to success. They are very important.


What if the State Attorney General comes in and wants to pull every video that you have ever recorded to watch all of them and look for every problem there ever was? This is a common concern among dealers, but in over 10 years of usage nationwide, this has only occurred with SmartEye one time. There were 25 videos for a dealer in California who was involved in a class action lawsuit where a law firm was claiming that Spanish speaking customers were being treated unfairly. In this particular case, those 25 videos were turned over to the California State Attorney’s office upon presenting a subpoena, and the dealer was exonerated and the findings were that there was no wrong-doing on the part of the dealer. So, that is one occurrence out of a million deals.

In all, video recording is not only essential for perfecting the sales process and customer satisfaction, it is a system that allows for training and compliance all rolled into one.

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Digital Compliance, Part 3

Serialized articles are like turkey after Thanksgiving: eventually, you get tired of turkey sandwiches, turkey soup, and turkey burritos. It’s time to move on to other things. So this will be the last installment on the topic of Digital Compliance. One last 1,000-word helping and we can put away the cranberry sauce for another year.

In the past two months, we’ve examined online solutions for OFAC, the Safeguards Rule, the Red Flags Rule, F&I menus, the Dodd-Frank Act, Environmental, Health & Safety, Human Resources, and Compliance Training. In this installment, we will consider Product Training, Deceptive Trade Practices, and Audits & Review.

Product Training

I know what you’re thinking – what does product training have to do with compliance? Everything. Indulge a true story to illustrate why (the facts have been changed to protect the author).

Once upon a time, there was a car dealership that sold GAP. Lots of GAP. Virtually every financed deal had GAP in it. And the F&I personnel always proclaimed the benefits of GAP: in the event of a total loss or unrecovered theft, GAP would pay the difference between the actual cash value of the vehicle and remaining balance on the loan.

Small problem – that description of benefits is not true: every GAP policy the dealership sold had a limit of 125 percent of MSRP. And since almost every car the dealership delivered was over-financed (150 percent of MRSP or more), there was almost always a deficiency in the amount paid to GAP claimants. A class action lawsuit followed.

In the course of the lawsuit, the dealership claimed that it was really the GAP provider and its agent that was to blame. If only the provider and agent had explained the limitation, the dealership would never, ever have misled the car-buying public!

Online product training, focusing on the precise contract the dealership sells for GAP, VCSs, and so on, takes away that argument. It is easy to prove exactly what dealership personnel were trained with respect to features, benefits, limitations, and exclusions. This protects providers, agents, and even dealership management. If an F&I manager misleads a customer about a product’s coverages, the dealership can prove how it trained its employees. Any deviation from the company line would be argued to be a frolic of the employee for which the dealership should not be held liable.

Of course, it also helps that dealership personnel who are knowledgeable about a product’s features and benefits are likely to sell more of it. So this creates the happy marriage of compliance and profitability.

Any online training provider should be able to create custom modules and LMS-based testing to verify learning.

Deceptive Trade Practices

This is another counterintuitive topic. How can an online solution detect or prevent deceptive trade practices?

Digitally recording and reviewing the F&I transaction, that’s how. Like online product training, this is both a compliance tool and a sales tool. Let’s look at each function in turn.

First, the sales tool angle. How do NFL players prepare for upcoming games and improve their level of play? By reviewing film. Successful players spend many hours in the film room, watching tape of opponents to prepare to overcome them and tape of their own performance to correct their shortcomings.

The same can happen at dealerships. If a transaction is recorded, review with a manager can detect flaws and correct them. For example, I’ve watched tape of an F&I practitioner that constantly clicked his pen during product presentations. He wasn’t even aware he was doing it – it was just a nervous habit. Once it was pointed out to him in a tape review, he stopped that behavior. Oh, and his PRU doubled overnight.

Then there’s the compliance tool angle. Simply stated, if an F&I practitioner knows his presentation is being filmed and reviewed, what are the odds he will intentionally mislead a customer? And if he inadvertently makes a material error, it can be detected and corrected before it spawns a lawsuit.

Let me put on my lawyer pants and make one thing perfectly clear: do NOT record F&I transactions if you do not intend to review them. To do otherwise is to risk creating evidence of misbehavior that can be used against you. And I would suggest archiving recordings only for the period of time necessary to use them for the purposes mentioned above, then delete them. If you want to pursue this mode of digital compliance, please consult your own counsel first.

A system I’m aware of that combines recording and reviewing by a third party for legal and procedural compliance is offered through IAS.

Audit & Review

As the old saying goes, you cannot expect what you do not inspect. But third-party audits are typically expensive, as they entail travel and expense accounts. Once again, though, the Internet can come to the rescue and eliminate the travel.

Gvo3 & Associates has developed a program that allows for F&I compliance audits from remote locations. Gvo3 provides the dealership with a matrix of deals it wants to review, reducing the chances a dealer will “cherry-pick” the deals it wants examined. Those deal jackets are then scanned and uploaded to a secure gvo3 site for review. After the review is completed, a webinar-based review session with the dealership and written report are provided. After this is completed, the deal files are deleted from the gvo3 site.

While online audits and reviews shouldn’t completely replace “boots on the ground” audits, they can fill the gap between them economically and efficiently.


You made it – three consecutive articles on the broad topic of digital compliance. Feel free to contact the author if you have any questions. Now go stagger off to watch some football. You’ve earned it!

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