Great Product Needs Great Process

As providers of F&I products, you’ve invested capital in the creation of a suite of offerings that you must now turn into revenue. To realize this revenue, you must consider a crucial component that is largely out of your control: the dealership – and more specifically, the interface between the finance manager and consumer – is where the rubber meets the road in determining your success.

You may endorse various strategies to your dealer partners that increase the likelihood of a product sale, so let’s examine the dealer’s process and see if the needle can be moved to the benefit of all parties, including the consumer.

A 2009 J.D. Powers Sales Satisfaction Index Study noted, "More than one in five shoppers who leave a dealership without purchasing a vehicle do so because they experienced poor treatment or dealer performance issues such as pricing games, sales pressure tactics or discourteous treatment."

Efforts to minimize pricing games and sales pressure tactics in the finance office are a continuously evolving process. In today’s dealership, the proper utilization of technology is often the difference between success and failure, particularly when you are relying on a human being that is under enormous pressure to affect a proper delivery AND make profits.

How can you relieve some of the pressure and do it in a manner that keeps the customer happy and engaged?

First, you must build awareness and need in the consumer’s mind for our products to fulfill. Asking the consumer to sit for a lengthy verbal presentation of every product often relies too heavily on whether the finance manager is having a good day and assumes the consumer has an attention span to stand for it.

Perhaps a "multi-media" approach that caters to modern society’s technological lifestyle is worth further study?

Jim Maxim Jr., president of MaximTrak states, "Video product presentations are gaining traction in today’s fast-paced dealerships—they cut down on presentation time and free up the finance manager to answer questions and close the sale. When the customer is able to review options at their own pace, without the pressure of a sales pitch, they feel confident in making a purchasing decision or asking more questions."

Maxim adds, "Video presentations are less debilitating on both the finance manager and the consumer, resulting in greater penetrations and profits for the dealer and a happier customer as evidenced by satisfaction surveys."

Despite these promising results, some are still reluctant to embrace video product presentations. Ron Martin, president of VisionMenu Inc., does not recommend them to his dealer clients because of concerns about slowing down an already lengthy process in the finance office and creating a situation that completely ties the hands of the finance manager to address customer responses.

"I think it’s better to train F&I professionals to present the products with the same level of professionalism [as the video presentations]," Martin explains. "Customers should be given the opportunity to answer open-ended questions so the dealership can ensure that their needs are met.

Regardless of which presentation method a dealership decides to use, consistency is the key element. As long as every customer is given the opportunity to be presented the entire "suite of offerings" in an enthusiastic, intelligent manner, your goal as a provider will be achieved. 

Next, having determined which products the customer is amenable to, you must present financial scenarios and pricing, which are handled by the now ubiquitous electronic menus. Few would argue that business is headed in the direction of fully digitized workflows and streamlined integration.

For providers and administrators, the value of an electronic process goes beyond simply wanting to be on the menu a dealer is using. OFAC checks, electronic vehicle service contract rating from within the menu, e-contracting and digital signatures, real-time contract delivery and debiting of accounts, EFT processes and more either exist today or are on the horizon.

Mark Thorpe, president of The Impact Group, tells P&A, "As the technology matures and certain issues like the acceptance of digital signatures, full integration between DMS, dealerships and administrators, and the adoption of an end-to-end solution by dealerships become a reality, the positive impact for the consumer will be huge.

"It is not inconceivable for this technology, which will be transparent to the consumer, to take penetrations to the next level because it will relieve the over-taxed workflow in the business office present today," Thorpe adds. "The finance manager will have more time to make a consultative approach, listen to the customer and respond to specific needs rather than make a one-size-fits-all sales pitch. Promoting ethical behavior without sacrificing profitability and penetrations will be a key byproduct of this process and will have a correspondingly positive impact on customer satisfaction."

Accountability plays an important role in managing any successful process. To remain compliant and maintain peak penetration levels, the dealer must adopt and religiously adhere to monitoring key metrics.

Even though dealers have largely bought in to the "you can’t manage what you can’t measure" mantra, practical considerations have prevented many dealers from inculcating daily accountability into their business culture. It is often overheard in dealerships that, "…if it takes away from making a sale, we just don’t have the time to stop and generate reports. We’re too busy."

Again, technology will play a role in overcoming the practical considerations for not generating and reviewing reports on a daily basis.

MaximTrak’s Maxim says, "Real-time polling of DMS allows us to generate a multitude of custom reports delivered by an automated web service that monitors every aspect of F&I performance with minute-by-minute, up-to-date statistics. Managers can then deal proactively with problems as they occur, rather than be surprised at month-end with an autopsy report."

Maxim says that "an added bonus is having real-time statistics available every day that promote healthy competition within the dealership. This often leads to the type of performance levels that make a dealer proud to share his financial statement with his peers at 20 Group meetings."

Martin agrees: "You can find out where all the team members in the dealership stand relative to their goals and you can customize training based on the strengths and weaknesses of each person’s performance. In addition, you can securely access your data anywhere in the world via the Internet."

By eliminating the need to prepare manual reports, valuable work-day time can be spent analyzing the reports and formulating strategies on how to improve, then taking the steps necessary to do so.