I need some help with a F&I meeting
I am planning on presenting a meeting dedicated to F&I. The meeting will be for the sales staff, both managers and sales people.
I plan on putting a professional power point presentation together.
I would like to present some statistics on the nationwide trends in F&I, what the national average dealer income is from F&I, how F&I income contributes to the overall dealership bottom line, how service contract sales equate to customer retention etc.
I would also like to discuss with the sales staff the importance of a decent turn over to the finance department when customers are paying cash or arranging their own financing.
I am sure most finance managers agree, this is, and always will be one of our greatest challenges.
Can we all put our heads together here and make some practical suggestions that I can put into the presentation,
What I need is some verifiable statistics and some suggestions on the best techniques in persuading the sales force that we are on their side and our function is to be a support team for the sales force and not a department that just relies on them to make our living.
So suggestions of how we help sales would be appreciated too.
I will be very happy to share the power point presentation with anyone who wishes to use it at their dealership when it is completed.
Thanks
Jed Fraser
Replies to This Discussion
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Permalink Reply by Jed Fraser on
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Thanks Bill,
I already pay the sales people 5% of the back end, which I think is very generous. Unfortunately the days of cash in fist are over. Our office will only add the money to their paychecks.
What I am looking for is a more logistical approach. Something that will help the sales staff understand the importance of the finance department and its contribution to the dealership's overall wellbeing. Customer retention in the service and sales departments etc. I need statistics to show this.
Thank you for your input.
Bill Harrell said:Hi Jed,
I was a Finance Director for 18 yrs. The main thing to remember is make the sales staff feel like they are a part of the equation. If they do a proper turn to the finance dept I always compensated them. I did this as a cash in fist when the deal booked. I paid the salesman 2% of the total backend. I would pass the cash out every morning in the sales meeting. No matter whether it is 20 dollars or 120 dollars they always had cash in there hand. I would have the sales staff come back after the customer left finance and ask how much backend did we do. Our pvr went up as well. so everybody wins. 2% of 1800.00 is not that much when you have someone else helping you sale it.
Good Luck with your presentation
Bill
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Permalink Reply by Alan Aronson on -
Jed,
We would like to be involved in this meeting. I am no longer a finance manager but do have 7 years experience as one. We now have a product that can add $200-$800 to your F&I profit. We know that products are being stripped away from F&I managers every day. It will also be a very easy product to get your salespeople excited. If you would like we can disclose all the information about this product and pricing in this meeting.
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Hi Alan,
Send me what you've got to my email and I will take a look at it. Send it to jedfraser@aol.com
Alan Aronson said:Jed,
We would like to be involved in this meeting. I am no longer a finance manager but do have 7 years experience as one. We now have a product that can add $200-$800 to your F&I profit. We know that products are being stripped away from F&I managers every day. It will also be a very easy product to get your salespeople excited. If you would like we can disclose all the information about this product and pricing in this meeting.
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Permalink Reply by Chris Spensley on
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Hi Jed,
The use of nationwide statistics is risky, factors differ in performance and you run the risk of affecting morale, most can debunk these stats as "not in my store" or they are imported or they are domestic etc. Another practice is pointing out areas of potential profit lift relevant to your individual dealership or group re: How much above our current VSC sales percentage do you think is possible? People get behind numbers they create, using stats in these meetings may spin them into a discussion of the accuracy of the numbers versus improving performance.
The idea of increasing or improving the T.O. to finance is an old one, the best way to approach it in a meeting may be to discuss the benefits of 100% T.O. to the SALES department, history tells us that discussing how it will benefit F&I usually doesn't get you that far. One of the primary benefits is the deal is never really as deal until F&I touches it, so why not get them involved as soon as the customer says yes. This protects the sale and the commission, not turning a deal makes it subject to re-negotiation and unwinds...both easily avoided by the introduction to F&I as soon as possible.
Some other solutions as cited above are usinbg a "carrot" such as a spiff to reward compliance or a stick such as removal of a portion of commission etc. when a deal is not properly turned. I personally think that if the salesperson sees how it beneits their business and makes deals more "sticky" that usually helps the most. Do a Ben Franklin on why versus why not T.O. at the point of sale and that makes for an excellent meeting. Good Luck!!
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Permalink Reply by Geoffrey Veit on
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Jed,
I would, as others have mentioned, emphasize team and show why and how to be a team.
I would talk about several things that make the team attitude stronger
1. What is the proper introduction to F@I and why is it so important?
2. What seeds can be planted and how
3. What seeds definitely need to be planted?
4. What is a properly filled out credit application and why is it so darn important that the credit application is properly and completely filled out.
5. What should be done while the prospect is in F&I
6. Because F&I people are designed to improve a deal not make it, why does the customer need to have mental ownership before they go into the Buisness office?
That's probably two meetings
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Permalink Reply by Allen Geissler on
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It might be a good idea to bring a few repair orders in from service to demonstrate how expensive it is to fix a car. In my expierence, you can have all the meetings in the world, but it's nothing like closing a deal on the floor to get the salespeople on your side. I have also had a few of them watch video's of me with customers so they can see exactly what it is that I do.
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Permalink Reply by Dan Welte on
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I guess as a long time sales person with recent crossover to Sales Manager this topic hits somewhat home for me. When I was selling I would do everything in my power to try to have the finance part of the deal stay "in-house" because I knew that having the customer totally LOCKED UP before they left was way better then "hoping" they can get all them money I closed them at... just have them make it sound like an additional FREE service at no cost to the customer. The easiest way to relate to the salespeople is to paint a picture of each scenario ie: If the customer finances with the dealership your already have everything there. If the customer goes to their bank to obtain financing TONS of things could happen on their way to the bank. For one they could pass 4 other dealerships on their way to the bank and get wrapped up there. They could get to the bank, and the loan officer could disclose to your customer that you may be asking to much for your car. The bank may tell them that the dealership either needs to cut the deal a few thousand or they will have to come up with the difference... ALL of these things do nothing but cost the salesperson money (not to mention your dealership).
The best way to get your salespeople to do a proper TO to finance is to make it "not an option". They are Car Sales Professionals, and need to act like it. People respect professionalism no matter where they are, and if your salesperson has done a proper job up to that point... a proper TO should be second nature. Your salespeople should know where their customers money is coming from LONG before they are introduced to the F&I Manager. If your salesperson finds out that their customer has there own financing arranged they should have already presented their "sales pitch" on how competitive your Finance Department is, and if they have done their pitch properly the customers will be intrigued enough to let you work them just like any other payment buyer... that's what it comes down to 8 out of 10 times anyway.
As far as showing how them getting their customers to Finance at the dealership, I don't think showing the dealership's bottom line numbers is the route to go (personally). I remember being in those meetings and the first thing I thought was "yeah, well what does that pay me". Maybe instead of drawing up how much it contributes to the dealership, show the salespeople the potential that they could make if the take their professionalism to the next level.
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Permalink Reply by Norman M. Kaye on
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Jed,
I think it is great that you're current focus is on the profit center we call F&I. I am going to answer your request a bit bluntly so I hope you will forgive. As I am sure that you are aware salespeople are not necessarily "future thinkers"; but more of what's in it for me now! In a way I certainly respect that attitude as it gives them a certain instinct to close a deal now. Having said that it is my belief that they will find a power point presentation filled with powerful stats quite boring! In order to get them on board I believe that you need to both reward great TOs to finance and, on the other hand, thier must be consequences if they do not attempt. Thus, here is a different point of view. Ok, so you can no longer pay them cash on the spot or at salesmeetings. Can they fill their tanks with gas, gift certificates, lunch or dinner bills paid, dry cleaning bill ect. Anything that is instant gratification. The opposite is a loss of bonus dollars if a proper TO is not done. Now that does not answer your presentation question. Interactive roll play is what I found works best for F&I "meetings". There is nothing wrong with showing what their pay can be if they have a penetration level of 10%,25% 50% ect. but my advise, keep that short. Make it about what they do best...sell. If you want their attention let them share their success stories and their fears. Make it fun, not fun of them.
Hope these thoughts help a bit.........................Norm Kaye
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Permalink Reply by Gerry Gould on
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Jed,
I have attached a Word document detailing an F&I Turnover Procedure that works wonderfully in tranfering trust from the Sales Consultant to the Business Manager. Hope it helps.
Gerry Gould
Director of Training
UDS - Attachments:
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3 POINT TURN.doc, 21 KB
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Permalink Reply by SCOTT TYNER on
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Well, I like that you want to get the sales staff AND F&I to be on the same team. I sold cars for 10 years (as Internet Manager, Salesman, backup F&I etc), and F&I staff for the most part act like they understand the entire car business better than ANY salesperson.
Now this is in general of course, because I have worked well with most people I worked with ( some not so well) for the most part.
Maybe you could talk a little about the stuff I write below.
From what I have seen we have 2 BIG FEARS to deal with.
1. The F&I Manager is afraid the salesman will "spill the beans" if he knows too much about the deal as far as finance is concerned.
2. The salesperson is afraid of the customer because he is in the dark (or downright ordered to dodge the topic altogether) when the customer asks a simple finance question such as: what rate can I get?
I would suggest a happy medium (correct me if I'm wrong). Let me give you an example.
I'm working with a customer who is sold on the car (key point - sold on the car - ready to buy if terms are agreeable). Personally I could care less about F&I until it is time for that. I'm not selling my customer anything in F&I. So I have no problem not knowing exact rates anyway (besides isn't that impossible at this point?).
So here we are at the "write-up". I would like to show my customers the best and worst rates along with the payments assuring them that they will fall in between somewhere based on what their credit situation dictates. Now I want to do this with the full sticker price for obvious reasons.
If I'm trusted by management I don't even have to go to the "tower" until I've got an agreement to buy "if I could...". So if you give me the tools I need, I'll make it easier on everybody, including F&I and we'll all make a better profit and commission.
Thing is if I have a computer at my desk I don't really have to worry about whether or not a dealer trusts me to talk about all that stuff with a customer, because I happen to understand both points of view.
I simply go to any number of thousands of websites and find the lowest rate out there work up payments with 20% down at 36 months with the low rate and with the highest rate (say 20% and then 4% interest). and there you have it. "...ma'am we know your payments will be in between these two somewhere, now let's figure out what works best for your budget. What is your monthly income...." - moving smoothly into a COMPLETE credit application, and an agreement to buy today "if I can...".
I know what you're thinking. "Some of my salepeople can't do this, they mess up and we always have to sell with little profit, when they know too much." If they can't be trained to properly answer customers questions WITH knowledge (not without knowledge according to popular belief), Then the problem is you're calling someone a salesperson, who really isn't. Fix it by always being on the look out for quality people to hire. Don't just hire when you lose someone. Get a real salesperson.
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Gerry,
Thank you, this is great. I have something similar, but I like how yours is more in depth and explains to the salesperson that it creates a sense of teamwork and unity.
Gerry Gould said:Jed,
I have attached a Word document detailing an F&I Turnover Procedure that works wonderfully in tranfering trust from the Sales Consultant to the Business Manager. Hope it helps.
Gerry Gould
Director of Training
UDS
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Thank you Dan.
You have some very good points here that I will incorporate into my meeting.
Dan Welte said:I guess as a long time sales person with recent crossover to Sales Manager this topic hits somewhat home for me. When I was selling I would do everything in my power to try to have the finance part of the deal stay "in-house" because I knew that having the customer totally LOCKED UP before they left was way better then "hoping" they can get all them money I closed them at... just have them make it sound like an additional FREE service at no cost to the customer. The easiest way to relate to the salespeople is to paint a picture of each scenario ie: If the customer finances with the dealership your already have everything there. If the customer goes to their bank to obtain financing TONS of things could happen on their way to the bank. For one they could pass 4 other dealerships on their way to the bank and get wrapped up there. They could get to the bank, and the loan officer could disclose to your customer that you may be asking to much for your car. The bank may tell them that the dealership either needs to cut the deal a few thousand or they will have to come up with the difference... ALL of these things do nothing but cost the salesperson money (not to mention your dealership).
The best way to get your salespeople to do a proper TO to finance is to make it "not an option". They are Car Sales Professionals, and need to act like it. People respect professionalism no matter where they are, and if your salesperson has done a proper job up to that point... a proper TO should be second nature. Your salespeople should know where their customers money is coming from LONG before they are introduced to the F&I Manager. If your salesperson finds out that their customer has there own financing arranged they should have already presented their "sales pitch" on how competitive your Finance Department is, and if they have done their pitch properly the customers will be intrigued enough to let you work them just like any other payment buyer... that's what it comes down to 8 out of 10 times anyway.
As far as showing how them getting their customers to Finance at the dealership, I don't think showing the dealership's bottom line numbers is the route to go (personally). I remember being in those meetings and the first thing I thought was "yeah, well what does that pay me". Maybe instead of drawing up how much it contributes to the dealership, show the salespeople the potential that they could make if the take their professionalism to the next level.
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