Debunking head-in-sand myth, but facing facts of F&I

By Rebecca Chernek

It's a myth that an ostrich buries its head in the sand. It merely seems like it when viewed from a distance.


The ostrich is really digging a h*** in which to lay its head and long neck flat, in an attempt to disguise itself like a mound of sand when it can't outrun its enemy.

I've concluded too many of today's finance and insurance managers are digging themselves holes. Not to hide from customers, but to bury their training manuals and all they've learned in workshop sessions.

I recently held an advanced workshop on the steps required to make a sale in F&I. It had a prerequisite: managers must have attended a 3-day workshop on menu selling principles.

Within an hour, I realized most attendees had completely forgotten the previously taught material. How was this possible? I had to assume they had buried the training manual in a drawer the minute they returned to the dealership.

Few had implemented the methods they had learned and few cared enough to find the manual and bring it to the advanced training session.

They thought they knew it all, and were disinclined to change course. Unlike the ostrich, who knows when it's better to hide in the sand, rather than trying to outrun its enemy, they preferred to stick to the old ways that have serious drawbacks.

Let's review some F&I strategies and issues.

The Interview

I strongly support the pre-sales interview. In training sessions, no one is allowed to leave the room when I'm covering the interview process. One manager admitted he had told his dealer I didn't cover the subject. I was miffed. Even if he had skipped out of the session, the material was in his manual! Had he ripped out the pages marked “Interview”? Obviously, he hadn't instituted a single thing we'd discussed.

Dealers and finance managers complain that sales are off and profits sliding downward faster than an Olympic luge. Yet far too many of them ignore using their past training and don't require follow-ups instruction.

Some who've attended training workshops say the problem with their personal failure belongs with the facilitator who couldn't hold their attention long enough for them to learn anything. This may occasionally be true.

A good workshop provides several easy, practical and effective steps to increase sales and profits. In order to see results in their dealership profits, however, attendees must change their attitudes and implement the proven methods.

Implementing Changes

If you attend a training workshop, your time will be wasted and money misspent, if you don't implement the suggested changes.

If your doctor tells you to lose weight or you'll suffer dire consequences, you'll heed his advice. It would be foolish to do otherwise.

If your golf instructor gives you three hints on how to drastically improve the swing, you'll practice until you have mastered it. You believe practice makes perfect.

The same holds true of F&I training. If you ignore the material provided, you shouldn't be surprised to find that nothing changes in your dealership.

Worn-out and ineffective procedures won't magically produce galloping profits. Do you wonder why you can't increase your per-vehicle-retailed or product index performance? Do you wonder why you have poor customer satisfaction scores?

How can you show the value of your products if you can't accurately describe them? How long has it been since you thoroughly read your product agreements or your finance and lease agreements? When was the last time you sat with your bankers?

Some ineffective F&I staffers aren't fully knowledgeable about products, but still endorse them. They can't show value, so they discount. When nothing works, they blame the economy.

Compliance

Compliance is not a dirty word. Several F&I managers have told me the industry has made too much of this “compliance thing.”

They know of no one who has gone to jail for deceptive practices. Of course these are the same managers who complain about reduced sales and profits and the loss of a significant number of customers.

Their dealerships may not have been fined for lack of compliance — yet. But they shouldn't assume their customers haven't figured it out and are staying away.

Thanks to sales tactics, they are on extended terms and buried beneath thousands of dollars with no hope in sight. Where are the car deals? The deals are sitting in driveways across the nation.

Sixty percent of your customers are buried in debt and the banks are no longer helping you with those high advances. So what do you do now?

Some of you thought those 84-month term deals were great. And you took advantage of those outdated customer-packing payments, and hid terms and rates. This practice is not only deceptive, it's stealing.

Why have you had to resort to outdated and deceptive methods to achieve sales? Because you don't know how to be upfront and sell the value of products. Once credibility is lost, it's seldom regained. That's a risk no dealership should take.

Keep Learning

Education doesn't come only from a college classroom. Dealership sales education is available in training workshops that specialize in the subject matter.

It's not too late to learn fresh sales techniques for menu selling of your products, to gain a more understanding of why the customer interview is vital before beginning the process, or to understand why compliance is essential.

It's no secret that the automotive industry is changing rapidly. Online virtual dealerships are gaining ground and may soon be commonplace.

They offer your customers “truth” and “compliance” and use various means to f win them over. They describe your menu products in detail and offer “fair” and “competitive” prices.

What can you do? Take steps to understand their methods and motivation and then produce an even better system for attracting and keeping well-satisfied customers.

Don't become an ostrich and bury your training manual. Don't ignore the effects of changing times.

Although an ostrich prefers to run away, it has powerful legs and can kill a lion with one swift kick.

Kick your decreasing sales and profit problems by confronting them. Keep learning and then put into action what you learned.

F&I trainer Rebecca Chernek is CEO of Chernek Consulting Inc. She can be reached at 404-276-4026 and chernekconsulting@earthlink.net.