An Interview With Joe St. John

Two years ago, former dealership manager Joe St. John’s career path took yet another unexpected turn when he left his job as director of training at IAS for San Francisco-based AutoFi, then part of an emerging and crowded field of digital sales and F&I providers threatening to disrupt the industry and, in the minds of many, relegate F&I professionals to the annals of history. Agent Entrepreneur met with St. John to learn why the former has come to fruition and the latter almost certainly never will. 

AE: Joe, how do agents and F&I product providers connect with AutoFi, and what’s the benefit? 

St. John: The cool thing about what we’re doing with AutoFi is we’re really supportive of the way each dealer wants to interact with their customers. There are no “recommended” F&I products. We support whatever the dealer wants to sell. They could be selling through their agent, a TPA, or their factory. However they’re selling, we support that. Where agents and TPAs can really offer value is providing good digital content that can live inside our system. It’s really about providing quality messaging that bolsters the value proposition in the consumer’s mind.

AE: You want their videos? 

St. John: Videos, PDFs of brochures, sample contracts. We’ve made it really flexible for dealers presenting F&I products that align with the philosophy of the dealership. We work with the different product integrators — with F&I Express, for example. We directly rate some products through F&I Express, others through product providers. It provides dynamic pricing. If you’re not integrated with F&I Express, we build out static rate cards, narrowed down to mileage and band. We do recommend not presenting in a way that’s overwhelming to the customer. Keep it simple, keep it meaningful. 

AE: Does it still benefit providers that aren’t connected? 

St. John: Oh yeah. We would still support any of the dealer’s F&I products. Scan the brochure and price it. When the dealer does it, it does tend to be less polished and valuable. As an F&I provider, coming from that world, I want to bolster F&I products inside dealerships. Think about all those trifold brochures that were delivered to dealerships. The providers are going the same way. Most don’t even make brochures anymore. We’re finding the dealers who have high-quality assets get more interest and have a better experience with the customer. And I think there’s still some really common misconceptions out there. 

AE: About digital F&I? 

St. John: About digital retailing in general. It has become a blanket term, like “menu,” which could be anything from an Excel spreadsheet to Fusion or Darwin or SmartMenu Pro. Same with “digital retailing.” That could be pricing. It could be a payment calculator. “You can get 4.5% from Lender A.” At AutoFi, part of our value proposition is getting real-time approval from a lender. See what they qualify for, maybe improve the deal with extra money down. In digital retailing, you have a really broad spectrum of solutions. All show digital signatures but they’re not all getting the digital signature on contracts. 

Another common misconception in the F&I space is that digital retailing is trying to replace F&I. I don’t want to get rid of F&I. I want to get rid of the BS that happens before F&I. I want to eliminate the wasted hour and a half waiting in the showroom while F&I tries to put the packet together. That has a negative impact on the customer experience and dealer profitability. Digital can have a pretty powerful positive impact. 

AE: Because more of that time is spent at home. 

St. John: Exactly. And think about that from the F&I manager’s perspective. It’s Saturday. I’m eight customers deep. Next up is an 85-year-old man, he’s been there all afternoon, and he’s mad as a hornet. “How long is this going to take, son? I ain’t got all day.” That’s a tough customer. By the time they get to my office in F&I, it’s an uphill battle. 

So imagine a customer who goes to your website and picks the car they like. A salesperson puts together the quote. The customer can knock out 90% of this from their La-Z-Boy. The customer structures it the way they want, sees what they’re approved for, and is presented three or four products in a noninvasive way. Then they schedule an appointment. The salesperson and the sales manager are alerted, all in the CRM, print out the packet, and get the car cleaned and gassed. 

The customer shows up, sales greets them, they inspect the trade-in to be sure it matches the customer’s description, and then provide them with a business manager to go over their options and get them out of here. Fifteen minutes after they show up, they’re sitting in the F&I manager’s office. And that’s the first person who’s selling them anything. 

Across our entire Ford launch over the last 18 months, on every deal contracted with Ford Credit, they’re running $1,605 per copy — 52% above the industry average. The VSC is penetrating at 45% and GAP is at 40%. Now, those customers didn’t all buy that stuff in AutoFi. They may have bought GAP, maybe more. But now the F&I manager can provide meaningful value-add and have a conversation about the decisions they’re making. 

AE: What’s the feedback from F&I personnel? 

St. John: Six months ago, I polled a group of F&I managers: “When an AutoFi deal comes back, are you ducking it because you don’t want to muck up your numbers?” They said, “Dude, we fight over those leads.” They know the customer is in a much different mental state. Some still don’t want to buy anything, but that’s not typical. 

AE: Did you ask or do you know whether AutoFi has skewed toward younger customers?

St. John: The metrics are astounding. Over our last couple thousand credit apps, 17% of customers that submitted were Baby Boomers and 22% Gen Xers. Throw the Silent Generation in there, and it adds up to 40% of people interacting with AutoFi that are not Gen Y or millennials. Another common misconception is that digital only appeals to buyers in big, urban, metro markets. I have some incredible stores that are the complete opposite. I’ve got one that’s 30 minutes outside Lubbock, Texas. They’re averaging around 60 new and used per month year to date, and this is a small, rural-market dealer. In August, they did 13 deals through AutoFi. It’s not just big metro dealers. It’s small dealers. Facebook is in every small town in America. My kids’ grandparents are on Facebook. Digital is for everyone. 

AE: Remind me how you got started in automotive. 

St. John: Growing up in Oklahoma, my mom was a service writer and my stepdad was an F&I producer, so I was raised in a dealership. In 1998, I took my first up at Jim Norton Toyota. My sales manager was a living legend, Jerry Hoyt, and I love him to pieces. I worked through effectively every channel. Went to college at OSU, earned my master’s on a Truman scholarship at USC, and after I graduated, I went back to Jim Norton. I spent 15 years in the same organization, from sales to sales manager, internet director, F&I director, and GM. 

AE: How did you get into training? 

St. John: We sold the dealership I was GM of and I was hired by Frenchy Mélon at IAS to lead training. 

AE: How did you know Frenchy? 

St. John: I met him when I was the F&I director at Jim Norton. He would come to our agency whenever they had classes and I would do training for them as an active F&I manager. I also taught at OSU. It was a weird divergence. 

AE: How long were you with IAS?

St. John: A little less than three years. 

AE: Did you think you would be there forever? 

St. John: Yes. I loved that company. I have nothing but Incredible things to say about IAS. Frenchy is to this day my mentor and one of my best friends. Leaving that company was a hard decision for me. But that team has such a deep bench. Mike Holliman took over training. He’s incredible. I knew when I left that my departure was harder for me than it was for them.

AE: From GM to trainer to tech executive. Could you have imagined? 

St. John: When I was in the grind, working the desk, trying to hit my numbers? No. I never would have imagined I would be on the executive team of a startup in San Francisco. But if I can do it, anyone can. My eyes really opened when I left retail. In your showroom bubble, you think you’re the best salesperson ever. Then you get exposed to real leaders, the people selling 50 units a month. I never sniffed 50 units in a month. If they sold as few cars in their worst month as I sold in my best month, they would call it quits. My eyes got opened when I got on the other side and started visiting dealerships all over the country. Findlay in Las Vegas. Germain in Ohio. The Rick Ricarts of the world. Sam Pack Five Star Ford. I started to see the different levels of this game. I became a student of the car business. What do great dealerships do? They know how to help people be great. 

AE: As AutoFi’s partnerships proliferate, is joining your platform a hard sell or an easy sell? 

St. John: Think about the debate over digital F&I at Industry Summit over the last five years. It’s moving. Everyone feels it moving. The stats show us it’s moving. Ninety percent of customers start the journey online. On average, they’re spending 17 hours doing research, but it still takes three hours to buy the car. Showroom traffic is the lowest it’s ever been. People aren’t walking through the doors. 

We saw this trend starting in 2007. The stacks of brochures were piling up. At one point in time, I managed my team through brochures. “Where they at? Let me grab a brochure and come talk to them.” Now manufacturers don’t even make them. Customers are getting that information online. It’s a really flawed assumption that any customer comes in with no information. We have to rethink the way we interact with customers in a way that’s not happening. There are no more “internet customers.” Whether it’s an internet lead or a phone pop, they’re all touchpoints. Digital retailing is an interactive tool for dealerships to engage with customers on the most important decisions. 

We were taught the customer will go to five dealerships. Now the customer effectively goes to one dealership. If sales doesn’t screw it up, they’ll buy. It happens in the customer’s living room, kitchen, and office. 

AE: And it circumvents one issue agents and trainers hate: unanswered phones. 

St. John: I think you still do have to answer the phone. Dealers say they’re losing money to their pricing strategy. I think they’re losing money to their communications strategy. They’re losing it on terrible word-tracks, like “The price will be better when you’re here.” They’re setting the customer up to think there’s all this room to negotiate. If you want to price aggressively, in a way that drives traffic and improves transaction, build your process around that. It’s a big differentiation for dealers like Gary Crosly in Kansas City and Sanderson Ford in Glendale, Ariz. They’re running TV ads that say, essentially, “Shop from home, buy from home, we’ll deliver it to you!” Think time. Think how long the process takes. If the customer hates that, why put them through it? 

AE: Because it’s hard to change. 

St. John: Right. And if you run that message, you have to deliver on it. Invest time effort and energy into delivering a digital experience so you can run those ads. Buy on your own terms at your own pace, online, through us, and you will enjoy the experience. It’s just so good. 

All that converges to create a net positive that impacts the bottom line of the dealer. Rick Ricart was interviewed at NADA. They asked him to name his most impactful technology. He said, “Auto-Fi, full stop. It allows us to adapt to the needs of our customers.” That’s what this is about. I can make more gross and have a better customer experience. They reframed the discussion from “How cheap can you can make it?” to “Can I spend 40 minutes here rather than four hours?”

AE: What’s next for the company? 

St. John: We have so much cool stuff coming. We are now able to put the customer’s digital journey in context. The dealer can see they’ve self-selected their credit score band or started with a $250 monthly payment and dragged it up to $500. They looked at this car, then that car. Tremendous insights that really empowers the BDC and internet and sales to follow the customer and see where they are in the process. 

AE: Are they using that?

St. John: Yes. It’s incredible. And we’re seeing a tremendous amount of value to dealers leveraging technology to put interactive deals in front of a customer. Let’s say an Autotrader lead comes in. Instead of responding with a quote, they’re responding with, “Here’s your car deal, and you can switch back and forth to see the difference between zero percent and rebate. Build the deal the way you want it and submit it online. See what the approval looks like and how it looks to you.”

AE: Some users must wonder whether that deal will be honored at the store. 

St. John: And that’s why we’re coaching and training. We are training dealers on how to build a communications strategy that supports their digital retailing strategy. 

AE: If they’re successful, it’s a compelling story the customer shares with their family and friends. 

St. John: Not if they’re successful. When they’re successful. Word spreads fast. You can tell it’s successful when the BDC manager is telling everybody about AutoFi and four other dealers call us for more information. That’s how we know it’s working.