The theme of this year’s Industry Summit was “Protect the Future of F&I,” and speakers and attendees agreed that maintaining high levels of production and professionalism would prove critical in an increasingly digitized and margin-compressed industry. F&I and Showroom met with Jason Barrie, vice president and general manager of Dealertrack’s Dealer F&I Solutions, and Marie Knight, head of strategic services for Zurich’s automotive business, to ask how dealers can build F&I departments that can weather any storm.
F&I: Jason and Marie, experts and trainers all seem to agree the F&I department isn’t going away anytime soon, but that dealers and F&I professionals must do their part by focusing on customer service. Do you agree, and if so, what’s the first step?
Knight: Customers today have a wealth of online research available to them. A recent study from Adtaxi found that 86% of car buyers conduct research online before visiting a dealership. By the time they are standing in your store, your customers have already decided what they want, down to specific details. They expect their car-buying experience to be simple and transparent because they have already researched the transaction so thoroughly.
Continuing to improve the instore F&I presentation is crucial to providing a better customer experience while maintaining dealership profitability. It’s important for the F&I department to present product information in an educational and consultative manner that speaks to the customer’s need to protect their new vehicle.
Barrie: We are really seeing a need to be smarter in how we engage with customers, both online and in the showroom. Nearly 90% of customers still want to complete their deal in the store, according to the recent “Future of Digital Retail Study” conducted by our research team at Cox Automotive. But car shoppers are also doing a great deal of research online before they come in to the dealership. So a key strategy is to ensure that there’s a consistent experience on the dealer’s website that continues at the dealership, including technology platforms.
F&I: Does the emergence of those technology platforms effectively mean the debate over whether to make information about F&I products available online is over?
Knight: It is important to be upfront and transparent, and for today’s consumers, that means providing F&I product information online and early in the buying process. A customer with access to clear and detailed information is more likely to see the value and subsequently purchase products.
In fact, according to the Cox Automotive “Online Retail F&I Study,” more than 60% of consumers said they would be more likely to purchase F&I products if they had the option to learn about them before finalizing their vehicle purchase.
When dealers present F&I product information — both online and instore — the available options, what they cost, and how they will affect the buyer’s car payment should be crystal clear.
Barrie: We know that, on average, consumers spend about three hours in the F&I and sales process. That’s extremely valuable time for a dealership to spend in investing in a relationship with the consumer, to educate them on F&I products and to build that bridge from online to instore.
Dealerships need to make their F&I presentations interactive and engaging. The presentations should include visuals, video, and descriptions that are dynamic and easy to understand. Customers are also big fans of a personalized car-buying process, so dealerships should provide them with unique presentations around specific vehicles of interest, lifestyle preferences, and driving habits.
We at Dealertrack know that options are critical to a successful F&I department, and we’re excited to be working with Zurich to enable a transparent and efficient car-selling process.
F&I: Knowing that, what can dealers and F&I pros do to maintain production and profitability?
Barrie: Enabling F&I product presentations with interactive technology is key. Customers want to fully understand what their options are before making F&I purchases, and interactive technology enables dealers to provide customers with a sense of control over their buying process.
Today’s most progressive and successful dealers have stopped using awkwardly disconnected menu presentations and are instead using streamlined, comprehensive presentation tools. Menu-selling tools that integrate with the rest of the deal flow provide a better experience for the customer and improve efficiency for the dealer, which ultimately leads to strong F&I product sales.
Knight: All highly profitable F&I programs are driven by a strong commitment to thorough, ongoing training, accompanied by performance reviews to ensure accountability. It’s important to give employees the knowledge and expertise they need to succeed, not only to motivate them but also to increase sales and profits for the dealership.
Successful dealers work with their F&I provider to conduct ongoing training. A thorough training and review process includes regular review of the deal jacket to check for proficiency and adherence to the established process. Gaps in the process are identified and addressed to show where missed profit opportunities could be improved. Observation of the F&I manager interacting with the customer ensures the needs-based interview is conducted and the product information is presented in a seamless and consistent manner.
Originally posted on F&I and Showroom