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 Cathy Aron on
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I agree, Jed. Marketing is the process of attracting people to our business for the potential purpose of purchasing our service or product. Social Media/Social Networking is an opportunity to get to know people and build relationships that benefit one another.
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Permalink Reply by Johhny B on
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Hi Jed, let me tell you the problems with Sales vs Finance.
1. Some dealers cut front, to get a huge back end. Now, the bank dictates this sometimes, the salesman sold the car for $25k, the bank says $23k is max on the front end, you cut the front, roll the profit to the back and make a 3 pounder on the back. This is the way we do it and there is nothing wrong with it. The sales person, that sold the car, is expecting a $500 commission and when he gets his check, it is a mini. Do we tell him this? No, we are managers, a.k.a....stupid, so we just let him get his pay check and surprise...you can't pay your bills.
2.Other dealers pack the payment so much, that when the salesperson is negotiating with the customer and the monthly payment, not the price, is the only thing that is being negotiated, some desks will cut the price of the car and keep $100 leg in the deal. Example, my salesman has a guy @ $32k on a car, we negotiate the payment down to $700, the sales guy is not stupid, he knows $700 on $32 is a full pop deal, but what happens? He sees the cap sheet, on the way back to the F&I office, he sees the price at $29K, @ $700 a month, what does that mean, the desk cut the front, to keep the back, lets say the car is in line with financing, the desk just drops the price to hold the back. This is unfair to the sales people, so intern, the sales people hate finance.
What do I think you should teach? To be honest with the salespeople. If the bank says, cut the deal, tell the salespeople, if we can't get more money down, we will have to cut your front and then the finance guy calls the customer and brings them in and the finance guy goes for the bump on the down payment, not the salesman. Then, bring the salesman the F&I office and show them the approval from the bank, show them how you came to the numbers and show them, you have no choice, but to cut the front.
When the negotiation is going on, tell the salespeople, if we drop below $*** we will start to cut the front, at least the salesperson knows, if he cant hold, lets say $600 a month, his commission is going to be lower. The sales guy will work harder for his money, then for the F&I managers money. Train these people, teach them how finance works, show them everything and they will open up to the finance office to a great relationship with sales.
Lastly, managers are notoriously bad to salesmen, the sales guy thinks they are getting a $2000 paycheck and they get $400 and then when they complain, we treat them like s***, we tell them, they are thinned skinned and need to suck it up. You want a better dealership? Blow out the managers and train the salespeople, or at least, train the managers to treat sales better.
I would not look at the salespeople, as the problem with the turn to finance, I would look at finance. Is the F and I guy coming out to meet the customer? When the desk knows they have a deal, they should call finance and have them get involved, come out and say hi to the customer, they should walk the customer back to F and I, not the sales person. Don't tell me it is to busy on a Saturday, the F & I guy can come out and spend a few minutes with the customer, sit down and talk with the customer, find some common ground and walk the customer back to F and I.
Don't look at the salespeople to fix the problem, these people have the least amount of power in the dealership. Problems are always better fixed from the top down.
I was part of, one of the biggest and best Finance departments in the nation and this is how we did it, the F and I guy gets involved on every deal....early.
Guaranteed, you will have some F and I guy, running $900 a copy, that will complain about getting of his butt and talking to the customer, he would rather Facebook all day, then make some real money.
I am long winded.....I know....good luck....
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Permalink Reply by John Fuhrman on
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Jed,
As far as the statistics you need, I suggest going right to NADA. They should have up to the minute data that could open some eyes in your dealership. One of the things you should emphasize in your meeting is that the biggest single benefit to what you do is that no product can be sold in your office unless and until the product is delivered.
I have been in the industry since 1979 and in F&I training since 1992 and the fact is, not one deal has ever been lost due to a T/O to F&I. NEVER.
Plus, with all the "RED FLAG" rules, compliance laws and disclosure, sales departments aren't equipped to handle that. If the problems you indicate exist enough to have a meeting, it could be serious.
In keeping the meeting positive, ask the sales team individually why they resist proper T/O's, or other issues with F&I. Then create PowerPoint slides to deal with each and every issue. Solving their concerns will go a long way as opposed to just spouting facts and figures. Remind them that when they sell cars at invoice or below, the "flat" commission they receive has to come from somewhere.
Show a slide sharing how F&I profitability in many dealerships, is what's keeping the doors open. F&I is what ties up the deal with motor vehicle paperwork, while they have the opportunity to sell another car. And share your appreciation for what they do, because without them selling something, you are out of work.
Above all, if your meeting with the sales team, keep the meeting as brief as possible. Make the presentation 90% about the benefits to them and keep it positive. If you are lucky enough to get them in a room to listen to you, you have one shot at earning their cooperation. Keep them engaged.
Hope this is helpful
John Fuhrman
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Permalink Reply by Sandy P. Cerami on
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Jed,
Often the "Road to Hell" is paved with the best of intentions! I would caution you, from past experience, that using the "educational path" to collaboration may be a rocky road. I guess first thing first...What is your #1 objective that you hope to achieve through the presentation, and perhaps most importanly, what are the 2/3 road blocks you are concerned with right now in the current process?
SPC
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Permalink Reply by Tony Troussov on
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Hi Jed!
I'm excited to hear your training plans. It looks like you are gearing up to have extensive research and this board allows you to get feedback and all types of points of view from professionals around the nation!
For training to be effective there must be an element of "what's in it for me" for your sales and management staff. You already compensate your staff fairly well, and if the financial compensation is not enough, there are very few motivational items left on the table. Besides dollars and cents, there must be other benefits for your people. You might find out that no amount of statistics would motivate someone to action.
From my experience (currently with a sales force of about 140 sales people), I found that explaining the big picture and how they fit into it is the most persuasive path. How every finance opportunity allows the store to generate additional income and their role in it. How this additional income insures better cash flow. How the cash flow generate paychecks and additional inventory. How additional inventory benefits them. Ask them, which company do they want to work for healthy or unhealthy one? They know that there are plenty unstable dealerships out there and some of them are no longer in business (talk about those stores).
The best way to persuade them is by discovery process. You want to lead them with questions so they arrive at their own conclusions. If you want some assistance with that and power point ideas, give me a call. I have completed over 400 training presentations and it would be my pleasure to share with you what works and what does not.
Tony Troussov
612-804-1706
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