Die to Self is F&I’s Crucial Challenge

By: Jim Leman

In our me-centric culture – and in this business in particular – being asked to put others’ needs before mine defies all sound reasoning. If I don’t look out for myself, who will?

Actually, serving others before self is the secret sauce to success in any endeavor, including F&I.

Consumer expectation is pulling F&I in that direction if you haven’t noticed. Dealers who have are already adjusting pay plans to favor a holistic value of customers, recognizing wrestling customers to the mat over products does not endear them to coming back again.

If we don’t flow that way, the regulators are ready to force us that way. The Consumer Financial Protection Bureau, the CFPB, still has bite. Attorneys Ballard and Spahr, LLP note comments made by the CFPB at the recent Auto Finance Risk and Compliance Summit indicate the Bureau’s increased scrutiny of how non-bank lenders – that’s your dealership – handle the sale and presentation of service contracts, GAP, and other aftermarket products to consumers.

That might happen, but either way, it is important how you introduce and present aftermarket products to customers if you want to maximize product penetration and per vehicle retail (PVR). Introducing products the old way, aligning what is presented according to the revenue they drive – and so commission for F&I – is selfish.

Consumers are driving a different F&I model, and dealers are wise to get aboard now. The new strategy for F&I is helping consumers identify through self-experience and self-questioning, aided by predictive analysis tools, dynamic e-menu platforms, and use of online educational content to help consumers match product values to specific lifestyle needs.

When dealerships are focusing on long-term sustainability, it will coach F&I to promote lesser-commissioned products that customers value – and benefit the entire dealership. Prepaid maintenance plans and road hazard that link customers to the dealership and encourage more frequent service visits over longer periods of time are examples.

Invite customers’ own examination of the facts. Use technology like digital menus, interactive kiosks, lifestyle surveys, and other tools that can help customers match product benefits to their budget, risk-aversion and other behaviors. These ways of engaging consumers put then at ease with the process, which they increasingly demand, and gives them a greater sense of in determining whether a service contract, GAP or an appearance package has value to them.

I know some reading this will push back – but I have spoken to too many dealers and industry experts who say that old-school F&I practice must yield to new consumer expectations.

“Increasing penetration rates may seem at odds with enhancing customer satisfaction: How can an F&I manager sell a customer more products while at the same time decrease the perceived pressure and reduce the time spent on the F&I process?” a Zurich whitepaper asks.

“F&I departments may need to re-engineer certain processes to become more efficient and customer-friendly,” the Zurich report answers in part, “but improvements in customer satisfaction are worth the effort: Dealers that focus on customer satisfaction in the F&I process are far more likely to increase sales, have return customers.”

It’s not human nature to think of others before me, but evolving consumer demands from all retailers are forcing business like ours to reconsider, to sell value and solutions, not products, that may mean releasing some near-term gain for a more sustainable tomorrow.

“There is more to successful F&I sales than presenting a product menu you need to defend. Let’s first listen to our F&I customers and then address those needs, which builds trust and rapport and leads to a better F&I experience,” Ben Brannon of Brannon Honda told Wards Dealer Business.

“We now work from a products-sold pay plan that is advancing overall health of the dealership,” Brannon adds. “If a dealership is to be sustainable for years to come, able to weather storms like 2008, we must build a strong, loyal customer base. The products we now sell more successfully are building this base for down the road.”

Jim Leman, a former Ford salesman, writes about dealership fixed and variable operations. His work appears in F&I and Showroom, Wards Dealer Business, DrivingSales, and others. Contact jimleman@gmail.com


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