The challenge in today’s market conditions is to fight the urge to cut corners just to make a deal. Remember the salesperson is often only looking to get a mark on the board and is less concerned with the overall result.

With volume scarce, the F&I office becomes critical to operational cash flow for the dealership’s very existence. F&I managers become key players and must ensure they are consistent in their process to extract maximum revenue from each sales opportunity. Following are the five key elements to examine. Some may seem obvious, but often knowing what to do and actually doing it requires the occasional reminder.

1. Are the markups on the products you offer too high or too low? Are your markups consistent for all customers?
It still surprises me to find F&I managers who only mark up their vehicle service agreements $400 to $500. While markups of $1,500-plus may be a bit much for today’s customers and finance companies to swallow, $1,000 is a good rule of thumb.

The beauty of this approach is, first, you are consistent for compliance on discriminatory practices. Second, you are giving yourself the flexibility needed to truly consult the customer on the program they feel is most appropriate. Let them choose. After all, if the markup on each program is the same, you and the dealership will produce the same bottom-line result regardless of which program customers settle on.

2. Are you meeting the customers on the showroom floor, or are they coming to your office cold turkey?
Have you ever noticed that your credibility is adversely impacted if the information you present for verification to finish the sale is inaccurate? Spelling of names, who’s on the deal, who’s first, second, etc. Many of these awkward moments can be avoided by visiting with the customer on the showroom floor and reviewing the key details to verify accuracy for documents to be prepared. It also gives you a chance to meet them before entering the confines of the office.

3. How many products/columns should you offer on your menu?
Marketing companies spend ridiculous sums of money studying the behavior of consumers. From their studies ,apparently, an odd number of choices is easier for a customer to digest, meaning three or five columns with five or seven products per column will be easier for the customer, as opposed to two or four columns with four or six products.

4. Do you believe in the products you sell?
Now, before you run off and answer too quickly, keep in mind it really doesn’t matter how brilliant a sales professional you may be. In the end, customers know sincerity when they see it. If you do not feel the benefits of a product legitimately help the consumer, there is no pay plan in the world that will motivate you to sell that product.

Ask yourself the following questions. Of all the products you offer, which is most difficult to sell? Often, this is the product that represents your lowest penetrations. The second question can help address your true opinion of the product. Do you have that product on the vehicle you drive every day to the dealership? Is it on your spouse’s, child’s or mother’s car? If the answer is a resounding no, then perhaps your true feelings about the value of the product are coming out subconsciously during your presentations.

Have the products installed on your cars and see how sales of that product will increase as you share personal stories of how you utilize the benefits every day.

5. Is the sales department working with or against you?
I realize this can be the elephant in the room that no one wants to acknowledge. Clearly, for you to maximize what is available for sale on the back end requires a coordinated effort between the F&I manager and desk manager. Now, I’m not even remotely suggesting that you need room in the payment (remember payment packing will send you to jail), but the question is, does the customer get turned to you consistently at 72 months with little-to-no down payment and a stripped-out interest rate?

Sure, once in a while, heck maybe even one in five (Pareto’s Principle 80/20) will mean the sales department has go to the wall just to sell the car. However, if half the deals that land in your office are as described above, something is wrong with the picture.

My suggestion is twofold. First, come to an agreement with the desk that all deals will start at 48 months with 20 percent cash down requested for first pencil proposals. The second pass should be at 60 months with 63- or 66-month options available to be presented to the customer before mindlessly jumping to 72 months on what may not even be the right vehicle for this buyer.

Conducting a daily save-a-deal meeting with managers is the best way to ensure proper coordination between the sales and F&I departments. After all, aren’t we all in this thing together?

By Kirk Manzo