As a kid, I was always intrigued by the picture of the leprechaun searching for the pot of gold at the end of the rainbow. Did he ever reach that pot-o-gold? And where did that money come from?
Early in my career, I quickly realized that there was “magic money” produced in the F&I office. After agreeing to purchase a vehicle, a customer would be welcomed into the F&I office. A short time later, that customer would emerge with a smile and a vehicle. And, our dealership would have increased the profit percentage on that vehicle.
That profit did not appear magically. It was the result of a culture of F&I within the dealership – where the sales and F&I departments worked together to find the pot of gold. However, creating that culture requires effort and buy-in from all team members. As you work through your 2016 goals, have you developed plans to create a cohesive team and workflow between all functional areas of the dealership? Successful dealers don’t just think of F&I as a department, they adopt a culture of F&I throughout the dealership.
A culture is a way of life of a group of people – the behaviors, beliefs, and values that they accept and pass along. As a dealer, do you understand the benefit of having your sales and service teams adopt an F&I culture? Where the employees believe in and accept the value of the F&I process and products as a way of doing business and impart it on everyone in both the showroom and service drive? Or is everyone chasing their own rainbow?
Your salespeople know many of their customers today work on a tight household budget. With a culture of F&I, sales associates also know how a VSC helps them stay within that budget when their car unexpectedly breaks down. Or, that GAP protection will ensure customers can pay off their vehicle in the event of a total loss.
With knowledge and understanding comes acceptance of F&I. Training the sales team on F&I products, their features, and benefits to consumers, and their value to the dealership as a whole will better equip them with the ability to familiarize customers with your products, ensuring a smoother transition to the F&I manager.
But what happens when a sales associate has a “cash” customer and the F&I department turns up its nose? A culture of F&I works both ways at the dealership. Magic money can be made with non-traditional sales if the F&I department sees the value, and has been trained to capitalize on the opportunity. If the F&I team is strong, they can take weaker deals on the front end and turn them into bright, shiny pots of gold.
According to the NADA, regular service customers are 17 times more likely to buy their next vehicle from their servicing dealership. Almost every product sold in F&I is geared towards increasing service drive retention. The language in most vehicle service contracts and maintenance contracts encourages customers to bring their vehicles back to the selling dealership. By educating the service department on the value of F&I products, you equip them to better serve their customers, creating a better customer experience and higher retention.
A knowledgeable service advisor can easily explain the benefits of a vehicle service contract or maintenance plan to a customer at a time when it is most impactful – when they see the actual cost of vehicle repairs. This can easily convert service customers to sales and F&I customers. Considering how many customers that service advisor sees in a day, or a week, the opportunity to drive customer retention and satisfaction increases substantially. Imagine if your service team followed the rainbow to find the F&I pot of gold.
The only way F&I becomes a culture is by training your entire team on the value of F&I products. They can’t pass along what they don’t know, and won’t pass along what they don’t believe in. Creating a healthy culture of F&I throughout the entire dealership can have far-reaching benefits, including higher customer satisfaction and CSI scores, higher service drive retention, and higher sales retention. Everyone believes it, embraces it, and ultimately, F&I becomes a way of life for dealership operations. And everyone can enjoy the benefits of that pot-o-gold!