At November’s P&A Leadership Summit, Daniel Lievrouw served as moderator for “F&I Product Selling in a Digital Marketplace.” The executive vice president and CIO of American Guardian Warranty Services was joined by Provider Exchange Network’s Carl Ciaramitaro, Jonah Cole of Dealer Inspire, Ken Murer of APC Integrated Services Group, Joe St. John of AutoFi, and Drive’s Matt Weinberg.
P&A caught up with Lievrouw shortly after the event to learn how he forged a career at the intersection of F&I technology and operations, how new advancements are accelerating the evolution of the digital F&I space, and how to get your kids into classic rock.
Dan, you went from IT director to EVP and CIO. Looking back, has it all gone to plan?
In the grand scheme of things, it has somewhat all gone to plan. I went to college for an operations management and information systems degree. They called it OMIS. I don’t even know if that degree exists anymore. Coming out of school and early in my career, I was more focused on the operations side, but I got pulled into the technology side more and more.
Why was that?
I think it’s because I was able to take the business case and translate it to what we needed to do. I had the operational mindset. I’m not a developer, but I can envision it and translate it and help manage that process from incubation all the way through.
And to be honest, I enjoy it. Operations can get a little dry at times. And understanding the technology end allows you to look at things with a focus on how to leverage technology to do things better.
How did you connect with American Guardian?
I worked with Rogers Freedlund, our CEO and founder, in a past life, at North American Warranty Services. We were at a conference around 2006 and he asked if I could come in as a consultant. They needed help with their website presence, needed to make sure their phone systems worked. So I came in as a pure technology consultant, not even a systems consultant.
We were at this point in time when the industry was trying to evolve. We were on a hosted AS/400, an old green screen information system. It was very fast, but only from a form connectivity standpoint. Econtracting and erating were not even part of the equation at the time.
Our systems provider at the time wanted AGWS to bring an AS/400 in-house. Rogers asked if I wanted to come in and manage the process. I said I would only come on full-time if I could look at other options. I was not sure an AS/400 sitting in a closet at American Guardian was the best decision.
So I did demos of administration systems and we found F&I Administration Solutions, formerly NAT — this was before David Trinder and Kumar Kathinokkula owned it — and ended up going with them. It took 18 months to do the conversion the right way and then we immediately started building other tools. We had the industry’s first online graphical appearance protection claims portal. We gave the consumer the ability to go online and “place” dents on their vehicle. That was about 10 years ago.
We also started to build our first menu, Turbo Rater, and go electronic. Now we’re about 98% electronic and we’ve been there for about the last three years.
Who are the 2%?
We have a handful of dealers who are pure paper, but that 2% also includes dealers who just signed on and wrote a contract over the weekend. Or it’s a dealer whose internet was down.
And we’re not going to complain about 98% electronic. Our executive team and I have spent years in this industry, watching the technology evolve. We saw erating and econtracting coming down the pike. Back then many people said it would never work and the industry was slow to adopt even the simplest thing. Look at how long it took for dealers, agents, and even administrators to wrap their arms around it, ultimately understanding it was a necessity and a benefit to all involved.
Now look at the change happening in dealerships today. Everything is speeding up exponentially.
Is the industry where it needs to be?
The industry has to be where it needs to be. Dealers and agents aren’t going to tolerate anything less.
The question keeps coming up at Industry Summit and PALS: How much information about F&I products, up to and including pricing, should be on dealer websites?
Even my team, internally, has a different view of that. When I moderated the panel on online F&I, I had many of my sales team there watching. We had the executives from AutoFi, Dealer Inspire, and Drive. We had Carl from PEN to tell us how the data moves in these models and then Ken from APC was there to give us the post-sale digital marketing perspective.
I started by giving everyone five minutes to tell their story. My story was that, six years ago, I met with two companies that were doing equity mining. They would take the dealer’s DMS data, scrub it, and find customers that were in an equity position. They would put together a beautiful presentation and email or mail it out to the consumer: “Here’s your current vehicle, your current monthly payment, and your factory warranty expired. Here’s the new make and model and all the benefits, and here’s your new, lower monthly payment.”
"There simply isn’t a technology platform today that can replace a good F&I person."
But they were never going back to verify that the payment only included the right rebates. When you set it up, you’re going to apply every rebate you can. And it never even considered F&I. Yes, your new payment was going to be cheaper, but it was also guaranteed to change.
I ended up working with those guys for several months. How can we work together so that, when we do this presentation, we can say “Here’s your vehicle with full coverage”? We want to make sure that monthly payment is as accurate as possible and you’ve started the conversation over products. Because in my mind, all this tech is hopefully there to make the F&I office something other than a secondary sales office.
It was a very impassioned panel and we actually ran out of time. I had to skip from the first question to the last question: “How do administrators work with you guys? How do we engage you? How do you manage the process and how do you set up rates?” What we learned was there is a process, but it’s kind of disengaged. The two sides aren’t talking to each other.
But the irony was, at the end of it, I sat down and talked with my sales team. And they said, “You can’t put pricing online.” And I said why would you not? And they said, “Well, it breaks the entire F&I discussion.”
It’s amazing the disparity in the understanding of how these tools work. Had we made it to question No. 2 with the panel, it would have been: “Is this tool there to solve the shopping experience or the buying experience?” Meaning, are we taking the F&I experience out of the dealership and completely online? Or can we change the shopping experience and make F&I a secondary experience at the dealership?
I think the majority of people hope the latter is the answer. You have to have someone there to answer questions. That is critical to maximizing profitability and the consumer’s understanding of what they’re buying. There simply isn’t a technology platform today that can replace a good F&I person.
These solutions allow the customer to review and help understand what the F&I process and products are. Give them a chance to think about it and come up with some questions. The F&I professional can answer those questions and spend more time engaging that consumer rather than selling the customer.
And the more confident the consumer feels in their decision, the fewer chargebacks.
I would think so because the consumer is making an educated decision. There are plenty of studies out there proving that, if you allow the customer to research F&I, your PVR will go up. I’m a believer in that. Once you’ve gone through the sales process, waited around, then landed in the F&I office, you have no idea what’s going to be thrown at you. Control that better, make it a more engaging situation, and I absolutely think the consumer will make a better decision.
What about pricing?
I absolutely believe we have to get to the point where we are willing to disclose pricing, but we need the tools and processes in place to ensure that this pricing is uniform across all platforms and presentations, online or in the F&I office.
And if the dealer wants to do that today, how accurate can it be?
The hurdle is trying to figure out the continuity of that. We still have different people in the dealership managing those pricing points. If the consumer has made it all the way through, what price points have they already agreed to? You can’t start the menu presentation over, so there is this potential disconnect between the consumer experience — the sales cycle — and the transition to the F&I office.
And if it isn’t seamless, and the numbers change, the customer’s trust is lost.
Once you’ve done that, they start questioning every step. So getting that right hopefully will change the way consumers think about the car buying experience. People like Carvana. It’s not that Carvana is better than a dealership. They don’t offer half the services a dealership does. Why would you want to buy a car that way, other than it’s easy and hassle free?
So how can we make the purchasing decision easy and not frustrating? How do you do that? Transparency is the key. Consumers are not dumb. Just assume they’re smarter. If you don’t offer the price, they’ll go hunting for it.
What’s on your agenda for 2020?
We’ve got a number of things. We’re coming out with a new version of our menu. It’s been in the pipeline for probably two years. It’s designed to allow dealers to disengage the F&I experience.
To be able to engage the consumer at home, on their couch, anywhere they’re at, and allow the F&I process to start in an engaging and controlled manner. If we can get that piece tied into the sales process, that can be very powerful.
Disengage can also mean bringing F&I into the sales process — one place to store all your rating, all your product information, and unify the online sales process with a transition to F&I. And we expect that to be available in early 2020.
We also have a fully online claims tool we’ve been using internally for about six months that will be released to the public in Q1 as well. It will have a level of AI built into it for decisionmaking so we can assist in the claims process, help make automated decisions. Consumers can go online, see their vehicle, see coverages, and submit a claim and in some cases they can fully facilitate a claim.
Doesn’t someone have to review it?
In certain cases, we will allow the tool to do self-authorization. We always talk about the end user experience, but it’s about the dealer’s experience as well. Making it easy for the consumer makes it easy for the dealership, and that puts us in a better competitive spot.
We are also always looking for ways to make the agent experience better. It’s up to the agent to decide who they want to work with today. My goal is to make it easier to pick American Guardian.
How’s the family?
My oldest, the boy, is getting ready to graduate college. As is my second, a girl. She’s caught up with her brother. She’s a year younger but she’s going to graduate in a month. She wants to be a lawyer. She is the planner of the family, the executor — everything documented, knows where she’s going to be tomorrow. And my son is the consummate salesman. He can talk to anybody; he’s fantastic at that. If the two of them were to partner up, they would be unstoppable.
And then my younger daughter is a junior in high school. She’s getting ready to launch into college. She wants to be a doctor. So I’m trying to do as much as I can with them before they’re gone. Right now I’m in Vegas, getting ready to surprise my older daughter with tickets to the Aerosmith concert.
She’s an Aerosmith fan?
She is a huge Aerosmith fan. It’s the strangest thing. We’re big into Disney and it all started with the Rock ’n’ Roller Coaster.
Working in a segment of the auto industry that other people in the industry often don’t fully comprehend, did your kids understand what you did, growing up?
I’m still not sure they totally understand. People would ask, “What does your father do for a living?” To listen to them explain, it’s kind of funny. They understand the surface. “He works with car dealerships.” Beyond that, it gets kind of vague.
I have brought my son to conferences. He’s got an idea of what’s going on. He loves talking and working with people, loves that aspect of it. My older daughter did an internship with American Guardian, on the legal aspect. She has a game plan, and it’s not in the auto industry, but if she changes her mind, I would like to work with all my kids. Ultimately, I want them to be happy and engaged in whatever they’re doing.