The Rules Have Changed: Considering the New 3 R’s

Want to bring true value to your client or dealer partner? Provide them with the following essential components for capturing the full F&I profit potential on every traffic source: the Internet, phone and walk-in. The initial components, Product Drives PVR and F&I Participation Throughout the Sales Cycle are designed to update the F&I and sales manager’s way of thinking and to challenge them to adapt an approach that treats all deals the same way. The third component, the Three R's, is as essential as the old-school three R's of Reading wRiting and aRithmetic.

The three essential components, when combined, will provide your client or dealer partner with a clear-cut strategy for maximizing F&I income from each and every deal, regardless of the point of origin. These components are based on adhering to the belief that product drives PVR and that there is additional profit potential on every deal through the sale of product while recognizing that rate reserve is a bonus.

Once that principle is adopted, F&I managers will take on a more optimistic attitude toward each deal presented to them. That positive approach to each deal will enhance their desire to be more involved from the beginning to the end of the sales cycle taking on a more proactive approach. The simple fact is that through their participation throughout the sales cycle, the second essential component, they will have a greater understanding of the customer’s buying motivations, which will improve their opportunities in controlling the destiny of the deal.

Now that we've formed the belief that product drives PVR and F&I participation throughout the sales cycle will enhance our ability to capture the full F&I profit potential on every deal, it’s time to initiate the third essential component: the three R's.

The days of our customers searching through the newspaper ads looking for car deals and setting a game plan for driving down to automobile row to kick some tires and do a few test drives are long gone. Our customers are entering our showrooms from another door: the virtual showroom door.

Industry sources tell us that as many as nine out of 10 customers' initial contact with a dealership is through the Internet, which leads to a phone conversation and eventually winds up coming to the showroom to take delivery. In an effort to capture the full potential of F&I profit on every traffic source all of us at UDS adhere to the following training criteria:

1. Create the Mindset that Product Drives PVR

• Insist that your F&I managers stop making customers wait for the F&I turn. It only builds customer apprehension and creates a non-receptive attitude. Convey the benefit of getting to customers quickly and how setting the tone by establishing rapport and a sense of concern over the customer’s desire to move quickly through the process will beef up their presentation.
• Make the F&I manager stop the dreaded walk to the F&I office. Have them go out to meet and greet customers and be engaging. Express to them that their customer will become more approachable that way.
• Place emphasis on products per deal rather than a total focus on profit per deal. Condition the F&I manager’s mind that insisting on leg is a disruption, not to mention illegal. Doing so will create a win-win situation for all parties involved.
• Stop F&I managers from running away from cash deals. Point out to them that there is a specific product for every car deal and when properly exposed, customers will buy more than we could ever sell them.
• Stop the F&I managers from “winging it.” During each visit, inspect what you expect by challenging them to recite presentations and specific word tracks for overcoming customer resistance.

2. Require More F&I Participation During the Sales Cycle

• Stop your F&I managers from waiting for deals to happen. Insist that when they’re not with a customer, they're at the sales desk assisting in the workings of the deal.
• Stop the F&I manager from alienating themselves from the sales staff. Encourage them to participate not only in the sales cycle but the sales meetings, trade walks and any other sales-related tasks as well.
• Point out to them the benefits of being more aware of the entire sales cycle from it's beginning to end. Point out to them how their awareness will allow for better preparation and set them up for a favorable outcome.
• Teach them the power of being proactive and how being reactive most often leads to failure.

3. The Three R’s

1. Recognizing the Deal: How and when we recognize a deal is most often the deciding factor on the probable gain or loss of additional F&I profits. Recognizing that a deal has been reached regardless of the origin, whether over the Internet, phone or on the premises, it's the moment a customer agrees on a specific vehicle, agrees on a price and agrees to take delivery that a deal has been reached.
2. Relaying the Deal: Once the customer agrees on a vehicle, price and delivery, how we communicate that to the entire sales and F&I team is significant in obtaining the fate of the potential F&I profit. The deal regardless of its origin needs to be managed as if the customer were right there in the showroom. Sign off on the deal, log the deal, start a deal jacket and turn it over to F&I so they now can take the next step and respond to the customer. Additionally the deal needs to be included in the DAILY "save a deal" meetings.
3. Responding to the Deal: What actions the F&I manager takes with the deal preceding the relay is the game changer. As if the customer were there in the showroom, the sales team must inform the customer that an F&I manager will be contacting them to solidify the transaction. Without hesitation, the F&I manager must respond to the customer.

Capturing the full F&I profit potential varies depending on how and when we RECOGNIZE a deal, how we RELAY the information to the sales and F&I staff and how we RESPOND to the customer once a deal is reached. To capture the full F&I potential of the three traffic sources - the Internet, phone and walk-in - you'll need to implement a plan of action that allows for F&I to participate in the makings of the deal throughout the sales cycle.

Your business development practices need to take a more prevalent role if you want to succeed in today's economic environment. The following outline and word tracks are provided to give you the tools to implement the Three R’s. You supply and ensure they apply the information and you’ll have a classic win-win situation.

ONCE A DEAL IS REACHED

Customer Commits:

• Manager signs off
• Business manager does introduction, presentation and completes paperwork
• Sales consultant gets it cleaned and ready for physical delivery

Customer Commits:

• Manager solidifies over the phone or Internet
• Business Manager does introduction, sets expectations, completes interview, and sets up for the customer's arrival
• Prior to customer’s arrival, sales consultant gets it cleaned and ready for physical delivery

• Make sales and management introductions
• Show them to their vehicle
• Business Manager does introduction, presentation and completes paperwork
• Sales consultant does physical delivery

Introduce Yourself:

Hello this is [associate], the sales manager with dealership. May I speak to [customer]? Hi [customer], did I catch you at a good time?

Solidify the Transaction:

I'm calling to thank you for: - contacting our store via the Internet or phone

or

- your business

or

- the appointment

or - the opportunity to earn your business.

I know you have been working with [associate] on the vehicle. He has informed me you would like to come in on Saturday to: - take delivery

or

Set Expectations for Business Manager:

I'm going to have one of our business managers contact you to verify the information and collect the deposit. I look forward to meeting you on Saturday.

Business Manager Word Track

Introduce Yourself:

Hello this is [business manager], the business manager at [dealership]. May I speak to [customer]? Hi [customer], did I catch you at a good time?

Solidify the Transaction:

First, I want to thank you for allowing us the opportunity to earn your business. [Sales manager] our sales manager has informed me you would like to come in on Saturday to take delivery of the vehicle you and sales consultant have been working on.

Purpose of the Call:

I need to verify the information and collect the down payment. In addition to the e-mail address I have, do you have a fax number in case I need to fax some documents to you? I would also like to discuss your payment options with you. This will take about five minutes.

Verify Information:

Who will the vehicle be registered to and what is the address where the vehicle will be garaged? I would like to confirm the numbers you agreed to. Here I have the purchase order that shows the sale price of $23,000, less your trade allowance of $5,000, plus we will pay off $4,300 to ABC Bank for your current loan. There is also the state sales tax of $1,260, plus documentary fees of $895. You have chosen an initial down payment of $2,000, so this leaves a balance of $22,455.

If agreement on payment has been reached:

I understand you have agreed to a payment of $418 for 60 months at an interest rate of 5.9 percent.

Gather Information: (Interview Sample Questions)

• The Balance at ABC Bank of $4,300, does it include any products such as GAP or Service Contracts you would like me to help you cancel for refund?
• Will you be the primary driver and if not, who will be?
• The vehicle is a great car, what made you choose it?
• How long do think you’ll be keeping this vehicle, how many miles per year?
• Where do you usually have your maintenance performed? How often do you change your oil?
• Have you notified your insurance company, what is your insurance deductible and do you know if they offer a discount for alarms or security systems?

Set Expectations for Arrival:

That just about wraps it up. If I need any additional information I’ll send you an e-mail and if you need anything from us you can e-mail me at [email protected] or call me at xxx-xxx-xxxx. I will have everything ready for your arrival on Saturday so it will be quick and easy. I look forward to meeting you.