How an Agent Can be a Serious Adviser to a Dealer and Not Just a Product Sales Person

If I was starting up an automobile dealership today and I could only afford to hire one superstar Manager, I would select the F&I Manager as that superstar. You could make an argument for the General Manager, Sales Manager, Service Manager, and Office Manager being the superstar selection but I would select the F&I Manager hands down. There are a few reasons for this.

• First, 80 percent of customers are either financing or leasing their automobile, and getting bank approval many times is the difference between selling the vehicle or not selling it. The Finance Manager is the key person in ensuring that this happens.
• Second, the Finance and Insurance department are key to the Sales and F&I Process. The Finance person is integral to the management of the payment on the sales floor and the transition from Sales to Finance.
• Third, the Finance person has close ties with the Service Department through the sale of Service Contracts as well as with the office by ensuring the deals are funded.

I like to call the F&I Department the hub of the dealership. He or she touches every department of the dealership and can affect the profitability of each. The independent agent is many times the dealer's key consultant in order to ensure the Finance Department is profitable. Their knowledge of how the Finance Department interrelates to the other areas of the dealership is crucial to them consulting the dealer and maintaining an active role within the dealership. Simply put, an independent agent needs to be more than a product sales person - he needs to be a serious advisor to the dealer.

So how can good agents assist to improve profitability in their dealership? The Sales meeting is probably the best opportunity that an agent has to gain maximum exposure in a dealership. It is a highly leveraged opportunity to train the F&I and sales department on product benefits and procedures that the agency provides them with. It is also the time to describe processes that will make the sales and F&I departments more successful.

I recommend that all agency sales people should perfect their skills in doing effective sales meetings. It would serve them well if they could make a minimum commitment of two sales meetings per month. That means 24 times a year your agency can have maximum exposure in your accounts. A 30-minute motivational/informational meeting makes you different than other agents who only focus on pushing the F&I manager to sell their products. The approach of just hounding the finance person to sell more of their products does nothing but turn the F&I person against the agent.

Sales meetings should focus on topics that perfect the sales and F&I process. It’s okay to mix in your products as well during your presentation, but you don’t want to come off as a “what are you doing for me” sales person.

In preparation for a sales meeting, always ask yourself the following questions:

1. What do I want my audience to know?
2. What do I want my audience to do?
3. What do I want my audience to feel?

The answers to these questions are the building blocks to getting results from your meeting. You want the audience to have the information they need to be successful in accomplishing the subject matter, taking action to get results, and feeling that they are doing the right thing for the dealership and the customer.

Some excellent sales meeting topics include:

• Why is the dealership the best place to finance an automobile? Discuss the reasons that it’s in the customer’s best interest to finance or lease at the dealership.
• F&I Product Sales Presentation: Show them a typical customer pitch for Service Contracts, GAP, Tire and Wheel. You can take away the unknown of what is said to the sales staff’s customers if you pitch the product to them the way it is the customer.
• What’s the proper turnover process of the customer from the sales department to the F&I office to ensure maximum sales and F&I profits as well as customer satisfaction?
• How do you effectively manage the customer’s payment options to sell more vehicles and increase profit?

When the salesperson discusses the payment options with the customer, there is an impact on the front-end profits, back-end profits, and customer satisfaction. How and when the payment is served to the customer needs to be clearly defined to the entire sales department. Therefore, when an independent agent conducts a sales meeting on payment management, they can create a great deal of credibility with the dealer, as well as, increase the agencies product sales at the dealership. So how do you approach this meeting with the sales staff?

I often hear sales managers say, “My job is not to sell F&I, it is to sell cars.” They further point out that in order to sell cars the customer needs a payment to buy an automobile. My answer to this is yes they do need a payment, but they don’t necessarily need an exact payment. Since 70 to 80 percent of vehicle purchasers will finance or lease their automobile, I believe that 70 to 80 percent of customers are payment buyers. They are not though exact-payment buyers, we make them that when they are actually budget-buyers. A customer does not come into the showroom floor with a specific payment in mind - they have a budget in mind or a maximum they can afford.

Some key components of this sales meeting are:

• Describe how the Back End, Front End, and CSI are affected by quoting exact payments. Yes, the finance and insurance profits are typically affected first when a customer is quoted an exact payment, but sales gross and CSI follow. Why would CSI be affected? When a customer is quoted an exact payment using an A-tier, later to find out that they are a C- or D-tier, not only does their payment go up, but now the finance person needs to share with them that they are C-or D-tier. No one likes to be labeled as such, even if they knew that to be the case in the first place.
• Payment-Buyers vs. Budget-Buyers: It’s important to distinguish the difference between, needing a payment to buy a car, since 70 to 80 percent of buyers are financing or leasing their automobile, and having a budget or range that they need to stay in.
• Who Calculates vs. Serves: Does it really matter if it’s the Sales Manager, F&I Manager, or the Sales person calculating the payment? I think most of us would agree that it is best if a manager calculates the payment. And, it really doesn't matter who calculates the payment, just how it is calculated. The most important key here is how the payment is served to the customer and it is important the sales person does that. Here is an example of how this is presented: “Mr. and Mrs. Customer, I think the vehicle that you have chosen fits you very well, and I think you’ll be very happy with it. I’m going to get some pricing and payment options from my Sales Manager to help you make your decision. I’d like you to know, that when I bring you a payment it will be based on an average interest rate. That is an initial estimate to provide you until we have your credit information. The reason that is, is that the lenders have a tiered system of credit. They rate customer’s credit A, B, C, or D. Since we don’t know what your credit score is, or what tier you will fall into, we’ll quote payments based on an average interest rate, that way you can choose a payment that’s within your budget. Once you decide on your purchase and we have your credit information we will be able to get you exact payment based on what you qualify for.” If the customer says they have “A” credit, and require the payment prior to making their purchase the sales person should request a credit application. The credit score can then be verified and a payment can be quoted accordingly.
• Qualification Process: During the buying process it’s important to evaluate the customer’s credit and payment needs.

Some key questions are:

1. Do you intend to finance or pay cash?
2. Where did you finance your last car? Who was the Leinholder? This is an indication of what tier they are likely to fall in, based on, if the leinholder was a prime or sub-prime lender.
3. Do you want us to take care of your financing?
4. Would you categorize your credit as A, B, C, or D? If they say anything but “A” tier, request a credit application so you can get them pre-approved.

Mike Jackson, the President and CEO of Auto Nation, recently said they have a 5-7 year project in place whose goal is to have everyday low prices, limited negotiations, and third-party validations for customers. He says, “The customer, who today has more choices and ever-growing reams of internet data are demanding the change.” In addition to Auto Nation, Sonic, Asbury, and Lithia are also in varying stages of experimenting with limited negotiation or value pricing models.

Transparency is what customers want and is the direction of payment management in automobile dealerships. The good news is that a transparent sales and F&I sales system not only translates to a happier customer, but results in more sales and higher profits.

An electronic pricing and payment Desking system is an excellent way of producing that transparency to the customer. It works very similar to an electronic menu system, that we use to present F&I products to give the customer options to choose from in order to make their buying decision. It is a transparent and comfortable alternative close, and gives the customer choices of lease, finance, and cash options in order to take them smoothly through the close, or buying decision. Presenting them a variety of finance, lease and cash options empowers the sales person and the customer with the information they need to evaluate the purchase together. The result is a happier customer, more vehicle sales, and higher sales and F&I profits.