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By Ronald J. Reahard of Reahard & Associates
Reprinted with permission from Ron Reahard
If you want to be in the automobile business tomorrow, it’s critical you evaluate your F&I department today. Not just F&I profits, but where those profits are coming from. How that profit is being made. Which F&I products are being offered. Which F&I products are not being offered. And even more importantly…how are those F&I products actually being sold?
Let’s face it…if a customer has bought a car in the past 25 years, they’ve been through an F&I office. They know the person in that office is going to try and sell them financing, insurance, and try to get them to buy a service agreement. The same thing that happened last time they bought a car, remember? Yet many dealers have no idea how F&I products are really being sold at their dealership. No idea what customers are being told to get them to buy F&I products. And no process in place to ensure that every product is being offered to every customer.
The fact is…today’s consumer will not buy something they don’t want, and don’t think they need. Increasing F&I income depends upon your F&I manager’s ability to find and fill customer needs… NOT on his or her ability to get people to buy something they don’t want, and don’t think they need. If you want to increase F&I income, your F&I Manager has to become better at helping people. It’s that simple. If your F&I manager is not helping customers, then the F&I process is adding no value to the purchase experience for the customer. And if the F&I process is not adding value to the purchase experience, then it is alienating your customers, and hurting customer satisfaction! The question is, as a dealer, how can you ensure your F&I manager is helping as many customers as possible, and take the pressure out of the F&I process?
Easy. By requiring the use of a menu in the F&I office.
Requiring the use of a menu to sell F&I products helps ensure every customer is being offered every product every time. There are customers who will buy every F&I product…but they won’t buy them if they’re not given the opportunity! Your F&I manager has a responsibility to the dealership, and to the customer, to review all of the customer’s repayment, risk management, and vehicle protection options, so they can make an informed decision about those options.
Keep in mind, a menu doesn’t sell anything. It’s just a piece of paper. What it will do is get all of the customer’s options on the table in a minimum amount of time, so your manager can discuss with them why– in their particular situation– each product is important. This does, however, require your manager be capable of giving the customer valid reasons why in their situation that product is so important.
The use of a menu can also dramatically reduce the amount of time customers spend in the F&I office. A menu allows customers to select the products they want, and ask questions or voice concerns about the ones they don’t think they need. This allows your manager to focus on what is important to the customer, and gives him or her a chance to discuss why that product may be especially important to them. Rather than “selling”, your F&I manager is simply reviewing the customer’s options, and trying to help them make the right decision regarding a particular product based upon their unique situation.
Our experience has shown there are five keys to using a menu.
First, it requires that your F&I manager discover why the customer needs every product being offered… before attempting to sell it to them. Today, the essence of F&I sales is matching the unique needs of each customer to a specific benefit of the product being discussed. If the customer doesn’t want the product, and your F&I manager is not capable of giving them specific reasons why in their situation they need that product, they won’t buy it.
The second key to using a menu is it has to be used… every day, every time, without fail, no exceptions. You can’t sell what you don’t offer. As a dealer, you have a right to expect your F&I manager be able to document that every customer was offered every product every time. The use of a menu provides you with proof that all F&I products were offered, explained, and the customer was given the opportunity to purchase all of them…not just the ones the F&I manager makes the most money on.
The third key to using a menu to review the customer’s options is there can be no selling the first time through the form. Your manager must simply tell the customer what each product is, and what that product does. When the customer doesn’t get the sales pitch they were expecting, they start asking questions and will volunteer reasons as to why they don’t think they need a particular product. This opens up a dialog about the product, allowing your F&I manager to focus on what is important to the customer, and why– in their particular situation– this product is especially important.
The fourth key is to give the customer ownership of their options. Instead of “pitching” products that the dealership offers, recommends, or has available, F&I managers must give the customer ownership when reviewing their options. “These are your options, available in connection with your purchase. My job is to review your options and answer any questions you may have.Your first option is your vehicle service agreement…” Customers want to know what their options are. They just don’t want somebody trying to “sell” them something.
The fifth key to using a menu is that your manager must always sell his or her products from a position of strength, by concentrating on what is truly best for the customer. Customers today want to do business with someone who listens to them, who understands their needs, and who cares enough to help them identify solutions to those needs. They do not want to do business with someone who cares more about selling them than helping them.
As a successful dealer, what does the use of a menu in the F&I office mean to you?
First, the use of a menu in the F&I office will help ensure compliance with applicable laws and regulations, and protect your dealership from potential liability and future litigation. The use of a menu provides proof that all of these F&I products were offered, the coverage explained, and that the customer selected those they wanted. Equally important, a menu also provides documentation that the customer affirmatively requested the F&I products they purchased. It confirms that they not only knew about, but in fact, requested, the F&I products be included in their payment.
The use of a menu also greatly reduces the amount of time customers spend in the F&I office. Rather than selling one product at a time, customers can select an option package, avoiding the need to sell those products individually. Today, customers are already familiar with most of the products available in the F&I office. They don’t need the coverage explained, they need someone to help them see why– in their particular situation– this protection is so important.
Use of a menu can also dramatically increase your F&I income, because it ensures every customer is being offered every product every time, distributing F&I income over all the products offered. Another benefit we’ve seen is a reduction in chargeback’s, since many chargeback’s result from the customer either not knowing what they bought, or not wanting what they’ve been sold. Utilizing and having the customer sign a menu makes certain there are no surprises when they sign the installment loan agreement.
Finally, using a menu of products in the F&I office increases customer satisfaction. It allows your manager to review all of the customer’s options in a minimum amount of time, and takes the pressure out of the process. Your F&I manager is not perceived by customers as “selling,” but simply reviewing their repayment, risk management, and vehicle protection options, and then discussing those options with them so they can make an informed decision. That is what today’s customer wants… it’s what every customer deserves… and reviewing their options will ensure the F&I process really does add value to the customer’s purchase experience, by enabling your F&I manager to help as many people as possible.
Every business succeeds by helping people. The key to maximizing F&I income is an unwavering commitment to help as many people as possible in the F&I office. To increase your F&I income, customer satisfaction, and protect your dealership, you must focus on improving your F&I manager’s ability to help customers, and have a process in place to make sure the F&I department helps every dealership customer. And the best way to do that today… is to through the use of a menu in the F&I office.
Ron Reahard is President of Reahard & Associates, Inc., which provides regional and in-dealership F&I training programs, consulting services, and real-world solutions that increase F&I income and customer delight. Ron is an AFIP Certified Course Instructor, and conducted the F&I Workshop “16.3 Ways To Explode F&I Income… and Delight Customers!” at the 2002 NADA Convention in New Orleans. He can be contacted at 866-REAHARD, or www.ron@go-reahard. Mr. Reahard does not endorse this or any other menu system on the market today.