The Value of Agents

I recently had the pleasure and was honored to engage the Agent Summit as Keynote Speaker for our industry. Although the title of this address was billed as ‘The Value of Agents and Agencies’, the underlying theme for the two hundred plus attendees was truly ‘The Value of Us’.

We examined the flow of Direct and Indirect Marketing of F&I Protection Products and answered the call as to the strengths of Indirect Independent F&I agents competing with large companies marketing on a direct basis. The difference clearly centers on Deliverable Value and we broke down that value into three segments:

1. F&I Protection Products
2. F&I Performance
3. F&I Profit

The presentation of a dozen or more F&I Products resulted in an interactive overview of each product with a look ahead seeking validation for long term success. This demonstration accentuated the flexibility of the independent F&I Agent in bringing custom products for today to their Dealer Clients as opposed to Direct Marketers calling headquarters to see what might be possible down the road. But then I asked a very important question of the audience:

How many products are too many to be?

There were quite a variety of answers, but the fifth or sixth response hit on the answer I was looking for: As many products that will fit on a one page menu!

Eureka! We’ve got it! The underpinning of menu rests with letting the customer decide and they’ll buy more than you could ever sell them. That said, a single page with a variety of selections is reasonable and bombardment is not.

On the subject of Menu and Selling, we easily transitioned to F&I Performance. A primary topic of performance is of course a quality selling system through a menu process. I showcased the UDS system by displaying the presentation page (present with enthusiasm-no selling) followed by a second page which delivers a step sell platform plus three payment deviation boxes (Advanced Equity, Lease & Custom) and finally a third confirmation page of products purchased and those declined. We moved to the meat of onsite coaching and support, the process available to assist dealer client in staff recruitment and transparent incentive programs to stimulate growth. All of those initiatives lead to accountability and evaluation through logging, tracking and trending. That led us right into the key metrics that require regular review in today’s F&I operation.

• Finance Control & Product Penetrations
• Average Finance Reserve
• $ Per Retail Unit
• Products Per Retail

Then, we surprised some attendees when we talked of drilling down into the whole pie such as:

• Product Profit Per Delivery
• $ Per Cash Deal
• $ Per Lease Deal
• $ Per Internet Deal

It is all relative to the bottom line. F&I Training was the natural next subject as we closed on performance metrics. So… we look for staff to be fully prepared to build good cases of need for each F&I product offered. Then training is essential and can and should be offered in three important formats:

• Live Organized Training
• Topical Webinars
• Online Support 24/7

The offering should include at least two Certification programs:

• F&I Certification – 5 Day
• Ethics and Compliance

In addition, we talked about the importance of Eight Core Modules that serve the expertise of an F&I Manager and they are:

• Control Through Finance - Selling System
• Aftermarket Strategies - F&I Product Value
• Retail Leasing - Gaining Commitment
• Secondary Finance - F&I Service Sales

With the details of F&I Performance surveyed, just one deliverable remained – F&I Profit. This deliverable centers on profit participation as marketing devices but one critical point was emphasized:

Participation programs lose their punch if you are not reaching performance goals.

We then looked at the profit opportunities which all equal ‘Cash Flow and/or Personal Wealth Building’ that are presented in today’s market place. They include:

• Management Fees/Overrides
• Earned or Guaranteed Retro’s
• Reinsurance Options ( CFC’S & NCFC)
• Dealer Owned Warranty Companies

Remember, “they are just Marketing Devices.”

Some agents sell product and some sell profit participation but the majority of F&I Agency leadership would agree that it’s F&I Performance that leads the way and in 2011 there are many more factors that F&I Agents must be prepared to deliver than ever before. This piece exposed how advanced F&I Agency has become and applauded the hundreds of millions of dollars in permanent income fostered for dealerships every year by the effort of a professional F&I agent.