Is your F&I department performing at its peak?

Since the birth of vehicle service contracts, the F&I department has grown to become the most profitable team for many dealerships. Dealers are dependent on the F&I department for the revenues it generates, especially with the ongoing profit margin squeeze on front-end car sales. In order to maximize profits from your F&I department, it’s important to conduct regular evaluations of how the customer sales and employee training processes are performing.

Here are four questions your evaluation should address:

Are we providing the best customer experience we can?

Customers are more empowered today in their car buying because they have a wealth of online research available to them. More than 80 percent of car buyers use the internet to learn about different vehicles, their safety record, and even about vehicle service contracts.¹ By the time they come to your dealership, your customers know what they want and how they want it. They expect the car buying experience to be easy and transparent since they’ve come armed with their research.

The F&I department plays a critical role in the customer’s experience because it is the last touch point in the process. Buyers don’t want to feel like they are being “sold,” so it’s important for the F&I department to present product information in a way that connects directly to their needs, which is primarily protecting their vehicle investment.

Are we clearly explaining the product benefits and costs to our customers?

The primary role of F&I personnel is to gather specific information during a customer interview in order to guide decisions around the various vehicle protection products. Understanding the reason for the car purchase, the number of expected miles driven each year, and other lifestyle and usage facts will help the F&I team present the product information to customers in a more relevant, needs-focused way.

When presenting product information to the customer, it’s important to be as transparent as possible in showing different options, their costs, and how they affect the car payments. The more clear and detailed information the customer has, the more likely they are to purchase products.

Do we have a consistent process during the turnover from sales to finance?

Car buyers are faced with a daunting amount of paperwork between the sales and finance departments. Does your dealership have a process in place where the customer is guided through the sales and finance transactions in a seamless and consistent way?

Evaluations of the customer experience often turn up gaps in the F&I process, where personnel get busy or forgetful and skip critical parts of the process, leave product information off the menu, skip the customer needs interview, forget to explain the costs at loan payoff, and more. Missing these steps can result in missed sales opportunities.

Is there a regular F&I training and review system in place?

Highly profitable F&I programs all have one thing in common: a commitment to regular training and performance review.

“I think people development is the most important commitment a dealer can make,” explains Aaron Zeigler of the Zeigler Auto Group in Kalamazoo, Michigan. “Giving employees the knowledge and expertise to succeed not only motivates them, but also results in better sales and profits for the dealership overall.”

Many dealers work with their vehicle service contract provider to conduct ongoing training on a monthly or even weekly basis. A thorough training and review process contains these elements:

• A review of deal folders to check for proficiency and adherence to the established process. Gaps in the process are pointed out to show where profit opportunities were missed.
• Direct observation of the F&I manager interacting with the customer to ensure the needs-based interview is conducted and the product information is presented in a clear and transparent fashion.
• A monthly meeting with the dealer, general/sales manager and F&I manager to discuss what worked well, and what needs to be improved in terms of providing a seamless, consistent process for customers.
• Roundtable meetings or off-site training seminars for sales and finance personnel, especially if a dealer owns several locations. These seminars can address regulatory changes, new product launches, customer needs analysis, interactions with lenders and many other topics.
• An annual planning session among sales and finance teams where current year results are shared and a roadmap of future F&I goals is outlined.

By following this structure for F&I program review and training, you can feel confident that your dealership is covering all its opportunities to both meet customer needs and maximize your profits.