The Seven “P”s of Progress

The Seven “P”s of Progress

F&I is gauged by profits and by positive customer experiences. In order to improve your F&I department, you need to remember the seven P’s of progress.


Have you taken the time to define your dealership’s process? Mapping out a plan provides guidance and order. During the mapping process, senior management needs to evaluate each step and ask the important questions: Is the action necessary? Does it add value? If so, how does the action add value?

Do not be afraid of change. People often do what was done before them, with little thought as to how it could be improved or the reason behind the action. Many blindly follow those who have gone before, then wonder why progress is not achieved.

Review your process map. Does it provide clear instructions? If it does note, it may be time for a change. When people know the mission and are armed with a clear map, the result is success.


I have written many times about the need for dealerships to hire personnel who have the same core values about business as the owners. We can teach process, we can instruct methods, but we simply cannot change anyone’s core values.

Core values are the internal compass each of us possesses. They define our character. It is not what people do when others are watching; it is what they do when people are not watching. The right personnel will conduct themselves in a manner that moves business forward in an ethical manner. The actions do not come from a written directive, but rather from normal activity.

In today’s dealership environment, buildings and inventory look similar. The difference is people. How you take care of customers, how you treat employees, and how you respond to the needs of the community are what makes a difference. People are the key to success.


Presenting any product requires practice. Presenters can practice on customers, with other team partners or even in seminars. Effective presentations are a result of practice, and the better the presentation, the easier the close.

When does your team practice? Are there set times of the week to practice, drill and rehearse? Is there a designated place for practice sessions?

Are the sessions filmed? Most people don’t like to be filmed, but it is the best tool for showing individuals what they are doing wrong. Seeing a negative behavior is the first step to correcting it. Listening to the presentations, you learn it is not so much what you say to the customer, but how you say it. View the film once for body language; the body must mirror the words being spoken. The second time, listen with your eyes closed and visualize what the presenter is talking about. Is the image being painted by the words the picture you want?

Presenting F&I products is different than presenting a vehicle; it is the science of presenting the invisible. Words are the paintbrushes that create mental pictures. Great pictures yield great productivity.


Life is driven by perceptions, not reality. From time to time, dealership senior management must ask, “How is the F&I manager perceived by the sales personnel? How are the introductions to the sales business manager? How does the F&I manager feel about the plethora of products he has on the menu?” The answers to these questions have a strong influence on productivity.

Some perceptions have merit, while most are fueled by opinions and half-truths. Senior management would do well to separate fact from fiction.


I was asked not long ago to sell something I did not believe in. My answer was “no.” F&I managers cannot be effective at selling anything they themselves would not own and use. Often, senior management has a different set of criteria for selecting particular products.

I often wish that senior management could see the personnel’s perception on products. If the F&I managers do not have faith in a product, they will not present it. For example, if F&I managers have doubts about the need for protective coatings, their doubts could be centered in either the application, lack of application or the actual product, but the remedy is same: Senior management should ask the vendor to spend time with the team who completes the application and, in front of the F&I personnel, perform the fire test on a vehicle. Once the F&I staff see the value of a product or service they will present it in a positive way, because they will believe in it.


Growth does not just happen, it is a result of planning and hard work. Performance must be measured, monitored and evaluated. F&I managers are competitors. They like feedback on how they are doing. Are they number one? If not, what dos it take to be number one?

Finance deals are a percentage of all retail deals seen by the finance department, so F&I performance is measured by percentages of sales. Service contracts, prepaid maintenance plans, protective coatings and security systems are all a percentage of retail sales; credit insurance products and GAP (guaranteed auto protection) are a percentage of financed deals.

People can usually reach and achieve a five percent growth without too much difficulty. Look at your performance percentages over the last 90 days. Raise the bar five percent for next month. With each success, your team’s confidence will grow and they will want to improve another five percent. If you improve five percent a month, that is a 60 percent increase in just one year.


Profit per retail unit is another measuring stick in F&I. The normal figure varies depending on where the dealership is located, the processes in place, and the products the F&I manager presents. A dealership in the Midwest with only service contracts and credit insurance to sell will be doing great to see an $800 profit per retail unit. While in the West, $800 profit per retail unit will not secure you a position; the mark is at least $1,000 PRU.

Some states are limited by the Department of Insurance as to what profits they can generate on insurance-related products. Pennsylvania, for example, only allows dealerships to mark up service contracts twice the wholesale cost, and it’s the same with GAP.

The public has become rate-sensitive over the past few years, so profitability in financing has been curtailed. Many lenders cap the dealership participation to two percent for contracts exceeding 60 months, and 2.5 percent for contracts fewer than 60 months. Captives have been moving inventory by using subventionary financing rates and/or rebates.

Rest assured, every F&I manager realizes that the vehicle must move first. Still, with all the market trends, F&I revenue continues to be a key department in every dealership.

With 2007 winding down and 2008 gearing up, the time is once more upon us to review the seven P’s of progress.

Dealer Marketing, December 2007, P. 43-44