As dealerships continue to face significant inventory shortages, they must find ways to uphold and maximize the profit potential of the deal. It’s been proven during this low inventory environment, just because the vehicle is not on the lot, it doesn’t mean it can’t be sold. Dealerships have come accustomed to the pre-ordered vehicle, and many have a stockpile of them. It’s not the sale that comes into question, it’s how we maintain and sustain the sale that becomes the challenge.
Let’s face it, a lot can happen while a customer waits for their ordered vehicle to arrive at the dealership. Therefore, dealerships must formulate a plan of action on each of the preordered vehicles. A plan of action that requires the F&I department to step outside their comfort zone and participate in making these deals from the inception through the delivery.
Typically, the F&I department only gets involved once the vehicle hits the lot. One of the most effective strategies for your clients F&I teams to prosper in this low inventory environment is to show them the G.O.Y.A.(Get Off Your Ass) and motivate them to take immediate and consistent action in a deals progress.
Let’s start with today’s car shopper’s journey. Their shopping journey is a whole lot different these days. The days of a potential buyer rolling out on a weekend and kicking tires, taking test drives, and negotiating a car deal are all but gone. Car shoppers are now online before they ever step onto a dealership’s lot.
It’s no secret the pandemic has accelerated the car shopping online experience. The internet’s readily available and easily accessible information has transformed the car shopper into knowledge connoisseurs. To stay ahead of the curve, developing new, updated, and innovative skills are paramount in moving your potential customers to a desired outcome.
There are three primary stages all car shoppers go through: the Awareness Stage, the Discovery Stage, and the Decision Stage. This journey takes shape as soon as shoppers recognize they want or need another vehicle (Awareness Stage). It doesn’t matter whether they know exactly what they want or are unsure, once they’re aware, they start searching for answers (Discovery Stage) — most that are just a few clicks away. Ask the internet anything pertaining to vehicles, dealership ratings, a salesperson’s reviews, or financing and leasing options, and a car shopper will get overwhelming results (Decision Stage).
The “buyer beware” environment has made a complete turnaround to a “sellers beware” environment. It’s during the Discovery Stage that car buyers begin enhancing their communication with dealerships and their staffs. Many car buyers make the shift to a more personalized style of interaction and rely more on verbal communication. Taking a direct, upfront, sincere, and useful approach to the exchange of information will grab and hold a car buyer’s interest, moving them closer to a decision on doing business at your dealership.
The old saying “people buy from people they like” still holds true, but in today’s “seller beware” environment, what holds the most truth is that people buy from people they trust. Whether your customer engages with you, trusts you, believes what you say, and likes working with you all rely on rapport and trust.
Gain, Maintain, Sustain
So, where is F&I? With thinner inventory across the country, it’s not surprising for dealers to have a stockpile of pre-ordered vehicles in their pipeline. Gaining the pre-order is not so much the challenge. Most dealerships do a fine job at getting a car shopper to place an order. The challenge becomes, not only to ensure customers stay out of the market before they find competitors, but also how to maintain the profitability. The F&I department’s contributions can be a critical factor in meeting these tasks.
I have found that the F&I managers who are willing to modify their approach and implement a process that grabs and holds the customer's interest throughout the car buyers’ journey, specifically during the pre-order sales process, succeed in not only sustaining the pre-order but significantly magnify the profit potential. What better place for an F&I manager to begin a dialog with car shopper than during their Discovery Stage, answering the critical questions that pertain to financing, leasing, credit, rates, terms and so on.
I can’t think of a better place to provide a car buyer with F&I awareness than during the Discovery Stage. Afterall, it’s during the Discovery Stage that the dealership and its staff formulate a connection with a car buyer. Let’s call it early intervention. Early intervention means identifying and providing effective early support to the sales and sales management staff, as well as providing F&I awareness to the car buyer while on their journey. Early intervention by the F&I manager will also reduce the number of cash and off-site lending deals, poorly structured deals, customer’s resistance, and apprehensions over the process, which tend to disrupt the F&I manager’s efficiency. At the very least, early intervention puts the F&I manager in the middle of the action and allows them to tackle challenges head-on.
While dealerships understand this, many miss the opportunity to maximize their F&I potential on the pre-ordered vehicle. As it turns out, many F&I managers will only participate in a deal progress once the pre-ordered vehicle arrives at the dealership and is ready to be delivered. That obviously is too late. The F&I department’s early intervention will only enhance the opportunity. F&I managers who take immediate action with direct, and consistent communication with customers in the pipeline will change the dynamics of the buyer/seller relationship. Therefore, the primary reason I would tell F&I managers to introduce themselves and participate along with the sales and sales management staff in the car buyer’s journey is to support them in maximizing their income potential.
F&I managers need to make a connection with the customer. They must embrace an immediate pre-order introduction by introducing themselves via phone, video conference, or in person as soon as they have knowledge of the ordered vehicle. They must recognize what they have engaged with their customer and provide them with F&I awareness. Do they have a captive customer or one that is unsure how they want to proceed?
F&I managers must be up for the challenge and be prepared to answer the critical questions regarding financing, leasing, terms, rates, credit, and be better prepared to convert non-captives. They must establish a follow-up plan that better prepares the customer for the delivery. During their follow-up campaign they can heighten customers’ expectations by providing product videos, articles, and persuasive information to the waiting customer.
It could be said, F&I managers who are transparent, open, and upfront too early in the sale are flying in the danger zone, but that’s in the past. Today, it’s the new green yielding the greatest potential. Here lies the challenge, all too often the pre-order is taken with a refusal of the F&I manager to participate at the onset. F&I managers must be committed to changing some of the ways they’ve done business in the past. Ben Franklin said it best “If you fail to plan – you’re planning to fail.” Truer words could not be applied in today’s low inventory environment.
Gerry Gould is the founder of Gerry Gould & Associates.