Agents provide a unique and invaluable service to automotive dealers as income development drivers, compliance consultants and training providers. In order to play this vital role, agents need information from disparate sources that paint a picture of sales and profitability at each dealership they service. It starts with reports based on DMS data to understand the highest level KPIs, such as unit count, per vehicle retail and product penetration. There are many solutions in the marketplace that do provide this level of reporting.
But that is only one piece of the puzzle. The agent then has to correlate sales performance of individual sales personnel with menu usage data to identify training opportunities for personnel. They then further need to correlate this sales data with information from product providers such as loss experience and reinsurance cessions to paint a full income and loss portfolio analysis to their dealer customers. Information, therefore, is the lifeblood of the independent agent.
“Agents are looking for every opportunity to show finance managers and general managers how they can improve their own and the dealers’ performance in the F&I office,” says Kumar Kathinokkula, COO of F&I Administration Solutions. “In addition, many agents have developed their own refinements to the analysis and KPIs that provide unique insights into developing F&I income and delivering value to their dealers.
However, gathering this information from DMS systems, menus and the product providers is a logistical challenge. Keeping track of all the different URLs and credentials is only the beginning of the challenge. Most agents find that they need to significantly “massage” the DMS reports to make them consumable and meaningful to dealers. In addition, the agent needs to correlate DMS data with the product providers’ data, which forces the agent to present to dealers using various reports which often show conflicting data and which therefore don’t always add positively to their discussions.
If the way agents and dealers access data can be streamlined and improved, Kathinokkula says, the savings in time and enhanced value of the data will have a profound impact on an agent’s ability to act as an agent of positive change — and therefore the success of their mission, which is the profitability of their dealers. “In fact, it is remarkable how expert and comfortable some agents have become with Excel so that they can deliver their reports in a timely fashion each month,” Kathinokkula notes. “And therein lies the other challenge: Because so much effort is required to adapt the reporting, it is not possible to produce the necessary reports and information as frequently as the agent needs. In many cases, the information is only updated once a month.
“This is extremely restricting to an agency,” he adds, “since each month starts with frantic data manipulation followed by pressurized visits to all key dealerships to discuss the data before it is out of date. Moreover, all this manual transformation of data compromises accuracy. So agents find themselves reacting, and usually reacting late.”
Escaping the Excel Scramble
Depending on their approach and style, an agent may fulfill many roles. But nearly every agent provides, at the very least, a suite of F&I products for dealers and the necessary training and sales support to ensure the greatest success of each dealership’s F&I professionals. Dealers rely on agents to recommend the best products for their stores with the ultimate goal of providing the best possible value for their customers, and the highest profitability opportunity for the dealer.
To be able to help deliver the best performance and profitability, however, agents need to analyze the DMS data as well as the data from each of the F&I product providers their dealers partner with. Kathinokkula believes this presents many challenges in addition to the issue of the month-end “Excel scramble”:
- Understanding DMS data requires experience and skill, and not all agents have the time or expertise to do the necessary analysis
- Correlating DMS data with product provider data is extremely challenging and few have been able to do this effectively
Enabling the agent to see all this information in one place would significantly enhance an agent’s ability to support a dealer. “Time spent gathering all this data and correlating it could be better spent on more value-added services,” Kathinokkula says. To that end, he believes agents need:
- Dynamic reporting that displays data in a fashion that supports an agent’s (often unique) analysis and approach to help with dealer profitability.
- To deliver targeted intelligence specifically designed with the end consumer in mind — reports for an F&I manager for example would be different to reports for the general manager, since each is looking at performance from a different point of view.
- The ability to look at more current and real-time analysis on an ongoing basis — not just after month-end — to spread discussions through the month while always discussing the latest performance data.
- Combined DMS data with a product providers’ data to enable easier, more accurate accounting and profitability analysis
“In short, to really focus on dealer performance and increase dealership profits, agents need to have the accurate, timely data from all information sources in one place so that they can focus on sales performance and training needs and not on Excel management,” Kathinokkula says.
Combining and creating relationships between DMS and product administrator data will improve the value of reporting, he adds, and it will have a ripple effect that will improve the value of conversations with dealers. In addition to reviewing a dealer’s performance as a whole, agents also could talk to the performance of administrators’ products that the dealer is selling.
To truly empower and free up the agent, software solutions need to go well beyond simply providing passive reporting. Rather, agents need an information delivery solution that would be the single source of truth — accurate, complete, easy to read and timely — without the need for massaging to make it relevant, useful, accurate and actionable.
Next-Level F&I Training
With the above criteria met, Kathinokkula says, agents could focus on training — and improve the quantity and quality of indicators that tell them which F&I managers need coaching, and in which areas.
“A well-designed dashboard can be extremely powerful. If, as an agent, your dashboard displays the top 10 and bottom 10 producers, in terms of performance and profitability, what would you do with that today? Which dealers would you call on next?” he asks. “Raw information in your DMS and administrator reports cannot give you a course of action — but targeted analysis should produce actionable intelligence.”
Since different dealers and different personnel have differing needs, such actionable intelligence should be targeted. So don’t just show the F&I manager what their penetration rates are, but show them where the opportunities were missed. Don’t just show the menu presentation rates, but directly present a menu training link with relevant content to the F&I manager who has low penetration rates and a low menu presentation rate.
Taken a step further, improved reporting could feed a predictive analytics model that could help F&I managers get a better understanding of the best products to sell in certain circumstances.
In time, predictive analytics could help agents forecast which products or product types a dealership should consider adding. A more immediate benefit could be an enhanced ability to match customers and vehicles to the appropriate term and coverage of a vehicle service contract.
“If the customer has purchased a Jeep Cherokee with 30,000 miles on the odometer, predictive analytics could help you determine the best VSC for their budget,” Kathinokkula says. “But that is not possible unless all the necessary data exists in one place.”
Ultimately, Kathinokkula predicts, improved reporting will improve agents’ ability to support their dealer clients. It should offer more layers of insight and help customize training to the needs and performance of individual F&I managers.
“Training should be proactive, and better reporting will make that possible,” Kathinokkula says. “If you are an agent, and you are training 30 different dealers, you must address 30 different sets of needs. Without the ability to tailor KPIs to the specific needs of each dealership and producer, you are limited to reactive training, and it can take weeks or months to see and understand the results.”