Taking Stock and Planning for Success
While we are in the throws of closing out the previous year, the results of our previous efforts will become clear. Did your results end up as you wished?
The three “P” s are key in production: People, Process, and Products.
Do you have the right people? Are they motivated, educated, and dedicated to a job well done? Do they act with purpose? While I pose many questions these are just the type of questions that begin the evaluation process.
People:
The right people demonstrate the core values of senior management. They realize that in today’s market every opportunity counts, and they strive to maximize profitability and think in a long view. The right people realize that how we do business today determines where the customer’s next purchase will be made. The right people are the key element when striving to increase customer retention.
Customers like doing business with educated professionals who follow through and do what they claim they do. What has been your education program? Learning on the job is a dangerous way to go.
After reviewing the past years production you will need to spend some time reviewing the education of your producers. Think of them as bank accounts, you will need to make a deposit before you can make a withdrawal. F&I personnel often have difficulties getting away for their much needed education. The F&I office has a one hundred percent closing ratio. Someone is always selling and the other is always buying, the key question is who is selling whom? Are your customers buying or are they selling?
Process:
The time to evaluate your current process is at hand. When was the last time you listened to an F&I presentation? Is the presentation creating value before discussing price?
If your personnel are simply bringing out a menu and reading it to the customer, they need to work on their perception of the products and services. If they believe in the value of the F&I products and services they will make a value added presentation with a full heart. Their belief in the items will show in their faces during the presentation and the customers will be more likely to purchase the products and services. When you review the deals, can you see evidence that the F&I presenter made the second effort? Did they show the products as solutions to the customer’s needs? Did they show the solution in writing?
If the customer declined the protection, can you locate a signed customer declination in the file?
Products:
The core products and services of the F&I department will be changing due to the lender restrictions. Many of you will find new limitations placed on the amount the lenders will advance on the loans.
When times bring limitation on the soft adds, the progressive F&I manager looks to partner up with the parts department to find some items that they wish to sell more of and they bring them into the F&I process. The F&I managers offer the customer an opportunity to customize their vehicle prior to arranging the financing. The items of customization can be as simple as bug guards, pin stripes, tinted windows, spray in bed liners for trucks, and running boards for SUVs. These are all items that can be added to the amount financed provided the customer can qualify for the new payment.
Accessories should never take the place of selling service contracts, or GAP. They merely enhance the income opportunities of the transaction. Each year millions of dollars walk out the dealership doors and enter in the doors of smaller companies who sell accessories because someone in the dealership is fearful of presenting additional items to the customer.
This is an opportune time to evaluate the products offered, the process of the presentation, and the people making the presentation. This year every dollar, every effort will count.
Oregon I.A.D.A. Kelly’s Korner, February 2009.