The Technology-Driven Agent

No doubt, you’ve noticed dealers asking their F&I product providers and agents for more – more value-added services and business intelligence. Dealers today want smart products that consumers want to buy – and they want agents to help them be more efficient, comply with regulations, deliver results with clarity, and improve F&I profitability.

The benchmark is high. Dealers expect their agents to deliver. They seek this level of agent performance because they themselves have had to embrace change to sell, service, and retain customers more affordably and profitably. They want their income development partners to bring them new technology tools that offer more convenience, better reporting, and streamlined and seamless administration.

The hard reality is that an agency’s lack of technology adaptation and ability to market itself and its products using tech tools makes it vulnerable to losing business. Whether or not you and your agency already use digital reporting tools, tablet presentations, eMenus, eContracting platforms, and other F&I software tools, this article will benefit you.

Four key market trends are driving this technology adaption by agents and their clients:

1. Technology is a Game Changer . . . the X-Factor: Recognize that technology can streamline processes, improve efficiency, and increase convenience. Used correctly, technology helps agents and their clients understand, operate, and manage their businesses more competitively.

2. Buyers are Tech Savvy: They expect you to be as well. Millenials and other-generation buyers use technology tools themselves when conducting commerce and communicating.

3. Potential Disruption: The emerging all-digital automotive retailing model, which melds carmakers, dealers, consumers, lenders, and agents into one seamless ecosystem, is disruptive change. Consumers will shop, select, finance, close, and make payments digitally. They already engage in digital transactions with many other retailers. They are baffled car dealers have not caught up. It’s coming.

4. Compliance is No Joke: Increasing compliance pressure from consumer groups and federal agencies, such as the the Consumer Financial Protection Bureau (CFPB), make it paramount that dealership processes be as thorough, consistent, trackable, and protective of consumer and business data as possible.

Modern F&I tools equip agents to address these trends. Technology can make them more efficient, help them monitor client sales in real time, provide greater clarity into the ROI the agent’s products are producing, and make monitoring, managing, and modifying product portfolios easier and able to be done on the fly.

The Technology-driven Agent

Agents can get ahead of the competition and create new value in training with their dealers by adopting innovations as they evolve. Staying abreast of current trends in your market will keep your company relevant for the long haul, put you in a powerful seat as a driver, and position you as a change agent for the next generation of processes.

The agency and its dealers at this point should be proficient in using:

• Digital onboarding that streamlines the process between dealer and administrators
• E-contracting – Is paper and paper pushing still your practice? E-contracting makes both internal and backend integrations clean, smooth, more accurate and complete, and delivers faster response for your clients.
• Digital claims processing – This puts all necessary claim information into a touchscreen tablet. It enables clients to review information, capture a photo or video of the issue involved and then digitally transmit the claim data and supporting images in real time to the administrator. Dealers want such real-time, fluid and seamless problem resolution – and their customers demand it.
• Real-time sales information tools
• E-menus - Introducing new tablet based F&I solutions within their dealerships

As OEMs continue to pressure dealers to deliver an improved selling process, dealers are responding. Recently AutoNation announced its $100-million-plus investment in digital technologies. The goal is to move its dealer websites from informational to transactional storefronts, where consumers can conduct most every aspect of the vehicle purchase process online. This will eventually trickle down to where the rest of us live.

Here is one way to show your proactive understanding of market changes. Continue to train, advise, and encourage clients to proactively present your products – even in an online F&I environment. Researchers at Capgemini reported in “Cars Online 2014: Generation Connected,” that 70% of buyers want to receive invitations from F&I managers to buy aftermarket products, and 69% said the same about service contracts. We sometimes forget the close is in the asking.

In a JD Powers Sales Satisfaction Study released in November, a direct correlation between tablet technology at the point of sale and higher SSI was documented:

• Using a computer/tablet in communicating price/payment helps drive satisfaction for working out the deal (784 vs. 770 in 2013). Satisfaction among customers shown pricing/payment on a computer screen/tablet is higher (827) than among those who receive this information in printed form (805), by verbal quotes (774), or as handwritten figures (764).
• Computer/tablet use by dealer personnel while presenting price/payment options has increased to 22% from 18% in 2013.

Perhaps this change and its influence on your business will come even faster. It seems doubtful that as more equity money floods the automotive market and new consolidators, such as Warren Buffet and George Soros, acquire dealerships that they’ll be satisfied to operate them using old, traditional models, which have outlived their usefulness.

Consider today how you might embrace change to serve your dealers and evaluate new retail models for F&I that can be actively marketed to dealers. Differentiate your market offering. Lead in your thinking and apply technology to resolve solutions and bring new and continued value to your clients.

Prepare Now

If you doubt the above scenarios, all we have to do is look around. The “Re-Imagination Movement” has finally hit automotive retail. Leading innovators like Google, Amazon, Facebook, and LinkedIn have set the service bar high with consumers. Consumers who interact with them – that’s about all of us – expect their level of convenience, transparency, immediacy, and service from other businesses.

Influenced by these highly visible game-changers, dealers form opinions about your company by a montage of experiences in both their personal and professional lives. The result is a new benchmark for exceptional service and value. The message is this: agents who remain relevant to their clients will likewise use technology tools to make their lives easier and their services more useful and profitable.

In a digital world, five-ply forms agents cannot provide competitive value-added results in a dealership ecosystem driven by software tools. Independent agents who remember when electronic contracting surfaced for the first time at Industry Summit and similar conferences know this. Now, just five years later, 85% of third-party administrators have realized hardened financial gains from electronic contracting, rating and other digital strategies. Early adaptor TPAs that dedicated resources to digitization now see a majority of their products being produced electronically, both on native company web portals and through F&I menu systems.

F&I tablet and touchscreen technologies have freed the agency, agents, and their clients from power, Internet and phone lines and have enabled business to be conducted at the dealer principal’s desk or at Starbucks. Eighteen months ago I served on a panel where the crowd hammered an F&I technology provider because an F&I manager in the crowd saw tablet-based tools as a threat to job security.

Now, our office phone rings daily with F&I managers calling about our new tablet platforms. Early-adaptor agents likewise seek these same business intelligence tools to make them better. Forward-thinking agents develop go-to-market strategies that incorporate digital tools and value-based products that automate and streamline old school paper-and-manual processes and deliver better service and performance outcomes for clients.

The marketplace offers some dramatic examples of what happens to slow adapters. Consider how Amazon’s e-commerce technology disrupted once-great brick and mortar booksellers such as Barnes & Noble and Borders. Just recently, Amazon announced package deliver by drone – imagine that disruption to UPS, FedEx, and the USPS! In 2007, Nokia was the top mobile phone handset producer in the world. Then the iPhone hit. Within two years, Nokia’s stock had fallen 92% from its 2008 high. Does anyone remember Nokia today?

Change in Our Neighborhood

Closer to home, a large direct insurance company and F&I provider announced in F&I and Showroom magazine a new tablet-based selling system it would display at NADA. As an independent agent, you can be sure that this direct-to-dealer insurance company is featuring this new tablet widget in every sales presentation it makes in your territory, driving home a one-company vision offering streamlined selling solutions – now available on a convenient tablet.

Interestingly enough, I recently had the unfortunate experience of watching a large agency lose an A++ account they had served for over 30 years. The agent was a friend of the dealer principal and enjoyed a solid relationship at that top level. Over time, however, as new and younger managers came onboard, this agent failed to connect with them. His business-as-usual attitude and comfort with traditional products and processes led this younger management team to view the agent as a “ticket puller” and not an innovator.

How do you rank against the competition? Are you a leader or follower? Perhaps it is time to find out and conduct an honest business assessment. I know; we just concluded a probing competitive evaluation of my company, MaximTrak Technologies. Some findings were a surprise (and painful to hear). We were not using best-in-class technology to drive digital marketing leads to sales, and furthermore we were not measuring the results. We also learned that we weren’t leveraging technologies built into our website to capture leads. Like you, we spend most time on client-facing development, to the neglect of our own website. We are remedying that now.

If you are interested in improving in this area, the following worksheet will be helpful. These points will help you get started:

1. On paper, break apart your agency into its individual departments. Evaluate how well each uses technologies to improve efficiency, reduce bottlenecks, streamline processes, and boost productivity – for both internal and external clients.
2. Using the worksheet category divisions, evaluate technology adaption in those departments. Customize the categories for your business.
3. After you’ve scored your categories, ask staff to grade the company on these assessments. Review results and then brainstorm with everyone in the agency.
4. Assign a team lead to drive solutions, according to priority of need or client benefit.
5. Develop a budget or find alternatives that work if you need to scale back.
6. Define the end game – the goal. It could be updating your sales presentation or adding a new tablet-based menu program to your offering, for instance.
Technology-driven agents are more efficient, productive, and profitable – the same results your clients are counting on you to bring to them.

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