Preparing for the Future- 4 Pillars of F&I Evolution
As we are in the ‘end times’ for COVID (quick…knock on wood), it’s important for F&I departments to take a look at strategies and mindsets that can help with sustained growth over the next 5-10 years.
F&I profits stand to gain a lot in the next few years but only if it thinks of doing business in a different way, letting go of past practices that no longer serves today’s more informed car buyer. High PVR and even higher CSI can continue but only with the courage to try new things and adopt new best practices.
There are 4 key pillars of a true F&I evolution that can help transform the department, staff, and its bottom line for monster success in the years to come:
- Move to In-House F&I Training: We’ve talked about this before…your best teachers for F&I the way you want it done at your store are already on the payroll. The old paradigm of having to pay through the nose for F&I provider-sponsored training and ‘schools’ is a practice that is no longer necessary.
Utilizing your existing F&I managers and Director to work with a new hire or to train-up a salesperson making the jump from the floor to F&I doesn’t have to be an expensive or time-consuming process. Save the money and create your own in-house training program.
Most new hires probably already have the basics of selling down…but now you can put the finishing touches on those skills by empowering your own staff to add the polish that builds a rockstar F&I manager.
- Bring F&I to the Online Party: In the era of digital retailing, dealers have had to embrace an online presence with buyers looking to pick out their car from the comfort of their own home. But the most successful dealers during this transition finally put a spotlight on F&I online as it was always the one department that had one sad page with names of the managers and little else.
F&I pages should be dynamic and focused on educating the buyer BEFORE they come to the lot. Explainer videos are a great way to walk buyers through the features and benefits of F&I products. Online chats with an F&I manager can be helpful to answer questions in real time and gain the trust of a prospective buyer.
Highlighting F&I online will make the sales process easier and more transparent for your managers once buyers come into their office. They will know what’s available and why the products are important.
- Take Ancillaries out of F&I: This tends to make every F&I manager a little nervous. Most ancillaries are on the menu and part of the overall presentation for every customer. We get that. But dealerships who are preloading the appearance ancillaries are finding a great deal of benefit from taking that OFF the F&I manager’s plate and moving it to the sales floor as a Line 1 add. Before you think it’s an insane idea, hear us out…
Creating a 4-5 product bundle that incorporates interior/exterior protection, PDR, windshield repair, alloy wheel repair, and key replacement on every unit for a reasonable cost saves valuable time for the F&I manager to hone in on the higher margin products of VSC and GAP. They get time to ask the right questions and to properly qualify buyers for products that cost more and take more time to explain.
- Consider a Direct Relationship with your F&I Provider: For decades, agents have been on the front line of signing up dealers and cultivating those relationships on behalf of the F&I providers they represent. They get a slice of the book of business and can represent several providers depending on the market and work with all of your competitors.
What if there was a better way to work with your F&I provider? A direct line, no middle man. If you have a problem with a contract remit, call the provider. Customer service issues? Need more marketing materials or support? Go directly to your F&I provider. Work hand-in-hand with them right from the beginning. Sounds good, doesn’t it?
The agent model has been part of the automotive business forever but as with any market going through changes, it’s ok to envision a new way to move forward. We all value direct relationships with companies we buy from. Sometimes the middle man can get in the way and sometimes it costs more to have that layer between you and your customer.
But we’ll talk more about that in the weeks to come…
These 4 pillars of F&I evolution are probably not even all that could change for the future but they are the ones that should be the easiest to implement in the years to come. Some dealers are already there and making shifts to a new way of having F&I function and still others may be hesitant to do something markedly different from ‘the way things have always been done’.
But if we keep doing things because it’s always been done that way, we don’t grow.
Get in touch with truWarranty here for a no-obligation demo to see how we are changing the way dealers work with their F&I administrator. Exciting times are coming…
Economic uncertainty is not the time to stick your head in the sand…it’s a time to be prepared to do things better so that you can stave off any potential crises if they do pop up.
Work from home is a thing now. For the last few years since the start of the pandemic, companies have been more open to the idea of working from home as a way to reduce turnover while maintaining productivity. For dealerships, there has been an interesting and unexpected benefit from the work-from-home that many have not seen coming. Car buyers who are no longer commuting to an office seem to be spending more both on the price of a vehicle and willing to spend more on F&I products to protect them.