Technology Makes F&I Sleeker But Not Necessarily Simpler

Coca-Cola Freestyle machines have popped up in recent years in malls, restaurants, and your local movie theater. The days of seven choices of soda (or “pop,” if you are from the Midwest) are over. The consumer can self-serve from approximately 100 variations of Coke products. 

With this technology, the drink selection (and customization) experience is easy for the customer to tap on the brightly colored kiosk. Don’t let the experience fool you into thinking this is anything but a complex assembly of digitally controlled hoses, wires, motors, and liquid containers inside the sleek red machine. Coke’s Freestyle kiosks put the customer in control — and that means shorter lines at the counter, a more engaging experience, and happier customers. 

Sound familiar?

Digital retailing makes F&I simple for your clients today, but not necessarily simpler for you to serve your clients … especially if the mechanics inside your F&I are manually processed. 

Agents Plug Into the Digital Ecosystem

Retail automotive is not the first or only industry to push against this reality in its forward progression to innovate, stay relevant, and create win-win-win outcomes for auto dealers, their customers, and the agents and providers who serve them.

There is the sense that what we gain through progress often requires heavy lifting by those involved. The web is full of headlines speaking out about it: “Mobile Technology Is Making Our Life More Complicated” (Mobile Industry Review) and “Technology Often Makes Life More Complicated. How Can You Simplify Things?” (FullContact), for example. Perhaps you are familiar with the “self-operating napkin,” one of many theoretical Rube Goldberg machines designed to work in a long and overcomplicated fashion through a domino effect on a series of simple devices. 

We’re having fun with these examples (I always get a kick out of Rube Goldberg machines) to make a point: While technology makes our business processes streamlined, transparent, highly accurate, and fast, those outcomes may come with a personal cost.

As an agent serving the digital F&I ecosystem in our rapidly evolving industry, you must not only understand these forces at play yourself but also educate and coach your clients about them to help them implement and profit from their use in their businesses.

The 2017 KPMG Global Executive Service noted that 85% of executives agree that the digital ecosystem will generate higher revenues in the automotive industry. The question is, who is tapping these revenues?

As your clients’ F&I products agent, can you answer that question for them? Consider:

• As electric vehicles merge onto American highways in increasing numbers, what new preventive maintenance, breakdown insurance, and similar products will you have available to introduce?
• As “cars as a service” (CaaS) or subscription vehicle-use models become mainstream, what products will replace the protection products you now sell when the vehicle user has no ownership investment to protect?
• What alternatives to third-party fintech technologies do you offer to help your clients retain these revenues? These apps grab shopper attention from the earliest touchpoints, via media, online search, and other channels.

As I shared in an interview with this magazine earlier this year, when you integrate with the insurance sales process, you must be able to sell it virtually without having a salesperson present. However, technology, we believe, will not replace the need for and the wisdom of staffing the F&I function with professional personnel who know how to listen for needs, ask the right questions to draw those needs out of reluctant buyers, and select and present the right products to meet those needs.

Nonetheless, more and more consumers will move to complete retail product transactions virtually, even though 2017 online insurance product sales accounted for 4% of all sales, which isn’t much — yet. It is a segment, though, growing at 300%!

Agents must remind their clients of this: The question is who will gain most from these transactions — the fintechs, or dealers who learn to leverage fintech technologies to flow this revenue and to their business?

F&I agents have always been educators and product experts. This part of the agent’s job is getting much more necessary and complicated. While dealers and their F&I directors may not vocalize it, they’re asking their agents to help them make sense of this change and leverage it to their benefit. Some proof points:

"Consumers want adigitally enhancedexperience that integrates with the virtual world." — Generation Connected (Capgemini)

"It’s imperative to befocused on how thecustomer travels through the path to the purchase." — Navigating the DigitalDivide (Deloitte)

"Customers expect aseamless experience across all touch points, both on- and offline." — Innovating Automotive Retail(McKinsey & Co.)

The customer car-buying journey starts months before a vehicle transaction and includes consumers researching OEM, third-party, and dealer websites. How can you help ensure your clients are establishing their brand and marketing their products and services at these up funnel routes to purchase? 

Forget the Past

The agent or dealer hanging onto the concept of not using digital is hanging onto the past. Five or six years ago, product providers wanted to get into econtracting. Now 90% of products are contracted electronically. They’ve seen the benefit. If their dealers aren’t econtracting, they’re not getting paid top dollar, because there’s an incentive built in.

Finally, and I may be a broken record (OK, flickering download stream) mentioning this again, but the easiest way for agents to bring real and almost immediate digital gains to their clients’ F&I business is to get them on a digital menu platform. It makes erating and econtracting much faster, so your clients get their customers delivered more quickly. We see dealers who use our tool produce $200 to $300 more per vehicle than dealers that use a paper menu. 

Wherever the customer is in their vehicle-shopping journey, be sure those technology providers you represent — whose same technology you use to serve your clients — are genuinely helping you (verifiable by robust, real-time data reporting) deliver a more streamlined, vigorous, and dealer-centric digital ecosystem that helps with compliance to protect and serve their customers at crucial touchpoints, including:

•   Online trade evaluation
•   Credit application
•   Deal structure
•   Virtual F&I processes
•   Esignature
•   Econtracting

Discuss these strategies and techniques with your clients. Help them understand and embrace their value to mine more revenue, eliminate waste and costs from processes, and serve up a more compelling and winning F&I experience for their customers. 

Coach them to embrace the digital ecosystem in its fullness, including their investment to streamline, line up, and integrate their on- and offline systems, because the vehicle sale, the F&I decision, and the turnover begins with a digital handshake — the first impression your client should master.

Encourage clients to sell and present all the products you sell. Show them how to use interactive customer survey tools to understand how to match product solutions to customer needs. Demonstrate how product bundling helps increase your clients’ product penetration — why digital F&I menus are the fastest and most productive way to boost PVR and product penetration while ensuring F&I consistency with every customer and with every deal.

A few final talking points to help you prepare your clients for these and other coming changes to the auto retail ecosystem:

•   Get ahead of the evolving landscape. Lead change with your dealers. 
•   Embrace technology. Digital retailing makes F&I simple today, but not necessarily more straightforward for you to serve your clients. Incorporate next-generation technology into your process and F&I schools.
•   Make your agency part of this digital ecosystem. Streamline your client services and get decision-sensitive data to clients faster. Make it easier for them to do business with you.
•   Lead. Train your teams, adapt innovation, and always put your clients first. The money will follow! 

The digital ecosystem sets up agents’ clients to respond to and take advantage of the many new ideas and consumer behaviors influencing how dealers merchandise, sell, and deliver F&I product, whether off- or online. A dealer simply cannot respond and compete unless part of this change — the provider’s agent — is in the best position relationally and educationally to help them bring the full power — and simplicity — of digital retailing to servicing consumers’ transportation needs. Contextualize these new realities for your individual dealers and put them on the path and position yourself to be their digital retail Sherpa.

Today’s retail automotive market may not be simpler, but with the right technology providers behind them, agents will find the pathway to success is a straight line.