The Most Profitable Sqare Footage in a Dealership
CUSTOMIZATION IS KEY. Progressive dealerships are incorporating “customized” items into the F&I (Finance and Insurance) process. Often overlooked as non-commissioned “parts” that a customer can get down the road for less money, these are products the sales staff can offer right at the dealership. Dealers who can negotiate a fair compensation among departments are realizing that parts can stock the customized items, service personnel can be trained to install the items, and F&I personnel can present, demonstrate and sell these customized items to customers with an opportunity to include the cost in the amount they are financing. Customization is the operative word. Your customers want to customize their vehicles and they are willing to pay for it.
CUSTOM PACKAGES
Make a Menu of items that can be easily installed by your service department or outsourced. Then turn your menu into a “convenience package” and a “fun package”.
Convenience Package
• One-touch awning with matching folding table and chairs
• Screened room to attach to the awning
• Plastic trash receptacle filled with kindling wood and refillable “matchstick” butane lighter
• Extra air conditioner
• GPS system (so men never have to ask for directions!)
Fun Package
• Satellite TV dish
• String of awning lights
• RV campgrounds membership
• Extra coach graphics
You already offer a service agreement package. Expand that coverage with a package that protects the customer in case of breakdown or required maintenance:
Expanded Protection Package
• Prepaid maintenance plan
• Road hazard plan
• Roadside assistance plan
Equity Protection Package
An Equity Protection Package is a combination of credit life insurance and Guaranteed Asset Protection (GAP). Most people will not leave equity. Current customers go into these loans with minimal investment and little equity. The recent economy has virtually removed the stigma of repossession since lenders will indeed make another loan. It will just take some time. Until you start seeing a solid 30 per cent cash investment in these vehicles, present credit insurance and GAP to every one of your customers. (Credit insurance can be advanced, providing the customer’s budget can withstand the payment).
Environmental Protection Package
• Exterior and interior coatings
• Under carriage coatings. Little openings are hallways for small rodents and offer a welcome respite in cold winters.
• Security system
CUSTOM PRESENTATIONS
If you use a two-visit process, divide these packages into two main categories: 1) installation required and 2) paper services. During the first visit, present the packages that need to be added to the unit. Present the paper services on the second visit. Let the customer decide how to customize the vehicle and then offer payment options: cash, check, charge, or financing.
Positive presentations go a long way toward increasing productivity and profitability. As a rule, 20 per cent of your customers will take everything you offer, 20per cent will take nothing, and the remaining 60 per cent will take something.
CUSTOME RESULTS
Customize your products, process, and presentation to increase sales, profits and cash flow. Then measure the square footage of the F&I department and compare it to the income F&I generates. The numbers should tell you that F&I could be the most profitable piece of real estate in the dealership.
RVDA Canada, RV Compass, August 2004