Structuring a Better Menu
Structuring a Better Menu

It’s an issue we deal with every day: We have the right person and the right menu in place, so why isn’t my client selling more products? The answer may be as simple as the structure of the menu, which product or products the menu is focused on and the number of products being offered.

If the menu being used in your dealership is a standard four-column menu, your finance managers are more than likely presenting it with great flow and great product knowledge. But have you considered the possibility that the way the products are set up on your menu are not designed to produce results? To discover whether or not this is the case, let’s first visit the psychology taken for granted in many cases when setting up the menu.

Many finance managers assume that GAP will sell the most, and therefore it needs top billing. In many cases, this causes a constant lapse in vehicle service contract and ancillary product sales. GAP probably is the easiest product to sell, thereby making it easy to take the path of least resistance when a customer resists purchasing any products at the end of the menu presentation. This may cause a reduction in VSC opportunities by going straight for the GAP close without revisiting the service contract. Don’t get me wrong, a sale of any product is awesome, but what if that sale prevents the sale of additional products?

Let’s look deeper into some menu structure problems and solutions:

1. The number of products being offered: A desirable number of products for your menu should be at least four and, if possible, no more than six. Customers retain knowledge to make an informed decision in different ways. Some best remember the first product presented; others, the last. Some remember the longest pitch and some the shortest.

The common problem with too many products is the customer’s inability to retain value on all of them. Also, having too many products will cut down on the features and benefits presentation for each product due to limited time. This leads to preprogrammed responses and objections because the customer has found little or no value in the presentation. Find the products for your dealers that will actually sell — not just take up space on a menu. This will allow a more effective product focus.

2. The structure of the menu: We so often see menus that are not set up to be profitable as well as sales-oriented. Take a look at the two examples below. The menu on the left shows no consistency in placing the products into a plan. The products are in no particular order or organization. The customer may not choose a particular product because there is no “cheaper” plan with that product. The menu example on the right shows consistency going from left to right. It also clearly shows that a product “drops off” in each plan.

Be sure to include all the products being offered in your first plan for compliance purposes.

3. Know why there are four columns. It is often said that the last three columns have no meaning whatsoever. Untrue. The last three columns on the menu are designed to expose additional plan choices to the customer, allowing the possibility of the customer selecting more than one product. In the diagram example on the right, let’s say that the customer really loves the tire-and-wheel product. Looking at the columns, the second column is the least expensive plan with tire and wheel, allowing the possibility of the customer selecting that plan.

Be sure your finance managers are asking the customer to select a “plan” rather than a “product.” The main reason for the additional columns is to allow the dealership to structure its menu to effectively present its most profitable products with a choice of options.

4. Focus your menu on volume and profit — not the path of least resistance. As stated earlier, GAP is commonly thought of as an easy sale. However, if your menu is focused on the sale of GAP sales, you may be watching contracts fly out the window. Look at the menu example below:

Ask just about anyone at the dealership what the most profitable F&I product is. They will most likely tell you it’s the vehicle service contract. The VSC should be the focus on your menu. It should appear in all four columns. Be sure that the service contract is the only product in the last column. Remember that the typical finance customer is focused on that payment at the bottom, so let’s not jeopardize our most profitable product by adding another product to the payment.

Make sure that GAP only appears in the first column. Since this product is so “easy” to sell, there is no need to give it top billing. Besides, what are the odds of a finance manager letting the customer out the door without revisiting GAP?

These small changes allow the focus to be on the more profitable products as well as the other products that may not have been presented effectively at GAP’s expense. Not to worry — GAP will be sold. But wouldn’t it be nice to sell a few other products too?

Be sure that your finance managers are presenting all columns. Customers crave choices just as much as honesty. They need to let their customers know that there are plan choices available to them that are not only customer-friendly, but also focus on profitability and penetration.

Remember that great tools are only great if they’re used properly. It is important that your finance managers are trained properly to conduct an effective presentation. Ask yourself this: Do my finance managers need objection-handling training, or would they benefit more from learning a solid presentation that reduces objections?

These are just a few simple steps that can be taken to increase the effectiveness of the menu structure as well as the presentation. Just make sure that the focus is where it makes the most sense. Please feel free to contact me for a more detailed anatomy of this subject and training opportunities.

About the author

Rudi Hynek

Contributor

Rudi Hynek is the corporate trainer at Interstate National Dealer Services.

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