How Private Labeling F&I Products Helps Today and Tomorrow
Dealerships are always looking for the best way to market themselves and to distinguish their store from every other in their local area. It’s standard these days to have a marketing team whose sole focus is helping to burn their store name into as many local car shoppers as possible. Everything is in service of the brand.Brand building may be nothing new but dealerships now have more options than ever that can make it easy to gain exposure. Social media posts, digital ads, banner ads, traditional media (print, direct mail)...
One of the most powerful ways to make an immediate impact when building and/or strengthening your dealership brand that you may NOT be doing now? Private labeling your F&I products.
And if you’re not, ask yourself ‘Why’? Most would say they don’t know how effective it would be or they assume it’s difficult to do. With the right F&I administrator, it’s easier than you think.
To add your dealership name to a VSC or preloaded appearance package benefits your store in more ways than one. And while dealerships are already having to fight issues of supply chain shortages and inflation, it never hurts to leverage private labeling in F&I to enjoy short-term and long-term advantages.Let’s take a look at how private branding helps now and in the future for dealership profitability:
Short Term Benefits -
- Levels the Local Playing Field - As new dealers open in your market or bigger groups acquire smaller competitors to increase their reach, your store has to stack as many ‘Why Buy Here’ reasons for local buyers to choose you. Attaching your dealership name to every VSC for example makes it easier for a customer to choose your car with the ‘ABC Ford No Fear Lifetime Powertrain Warranty’.
If your competition is only leveraging the OE warranty or another national company no one has ever heard of, local shoppers will be more comfortable buying your car with your branded VSC. Your name is what they know and trust.
- Higher Penetration - Every dealership needs those penetration numbers to be climbing and with a private label menu of strong F&I products, it can. Customers will see your products as something your store manages and administers, not some faceless company on the other side of the country. Car shoppers will be easier to close knowing that these products are yours and close ratios will rise. Familiarity means a lot.
- Higher Sales - The most immediate short-term effect is likely going to be higher overall sales and increased lot traffic. If private branded F&I products are featured prominently in all ads across all marketing channels, that alone can be enough to bring more customers to the lot. A busy sales department, even when inventory is lean, only helps F&I with higher PVR.
Long-Term Benefits -
- Preloads Easier for the Future - Private labeling your VSC and other products can make it easier to preload moving forward. More dealerships look to preloading as an ongoing strategy for better and more stable F&I growth and putting your dealership name on those products is a logical fit for the future.
Preloading limited powertrain warranties, for example, has recently become a popular way to set dealerships apart from their local competition and helps increase service traffic in the future. It’s low margin and easy to add to every car sold and can be part of a long-term profit strategy in good times and bad.
- Service/Parts Will Love It - Let’s look at that Lifetime Powertrain Warranty again…if your store brands it, customers will know right from the start they must bring the car back to your service lane for repairs. If it has another company name on it they will assume they can take it anywhere in case of a problem and no one wants that. That’s your future service customer, period.
Service and Parts rely on repeat business to compete with the independent garages and the AutoZone’s of the world. Private labeling VSC’s or powertrain coverage ensures those customers come back to you for years and not just for major repairs. They will be more likely to come in for regular maintenance as well.
- Sticky Relationship - That may sound a little weird but in marketing circles, creating a ‘sticky relationship’ is everything. The more products bear your dealership name, the more likely they are to keep coming back to you for everything from that next new car to their oil change and the aftermarket bedliner they want to add to their truck. The most iconic brand names in the world have made it their mission to burn their names in the brain of every consumer.
It’s no different with your dealership. Your local car shoppers should see your name everywhere and see that every F&I product you sell is good enough to have your name on it. Give it a catchy and unforgettable name…even better.
- Stable CSI - As your customers become comfortable with your brand being on all F&I products, your CSI should remain strong for years to come. Knowing that their appearance protection package has your name on it, they will have the benefit of a better customer experience from a claims perspective, showing on CSI survey results for years to come. Your dealership staff helps them, not some random claims department somewhere else in the country.
Private labeling F&I products has gained popularity in recent years in a world full of ‘influencers’ and ‘brand builders’. Now is the time to look at this strategy as good for your dealership now and for the future. The stronger your brand, the better growth for the years ahead and with so many changes coming in the automotive world over the next few years, building your brand by any means necessary is as important as ever.TruWarranty wants your name front-and-center on every F&I product and has the program to help make that a reality for your dealership. Our program makes it easy to showcase your name and help you set your inventory apart even during these challenging times. Visit us at www.truwarranty.co today to see how we can help.
For a dealership, private label branding won’t involve slapping their name on a bar of soap but rather attaching their established local brand to products that would be sold to buyers, especially in the F&I office.
Your dealership brand is who you are to the car shoppers and community at large. They know you, they may have bought many cars from you, they trust that you have good cars at fair prices. And it doesn’t stop with sales...it’s service, parts, and yes, F&I.