What?

It is time to talk about the F&I department in the dealership and how the BDC (GRC) department can help improve product penetration. The typical discussion with regards to business development is always about lead handling and appointments. The BDC discussion is one that can go on for hours and even days because it is interesting to hear different opinions. There are schools of thought that believe in the BDC and there are schools of thought that believe that sales consultants should handle everything from start to finish.

For the sake of argument we will call it the GRC or Guest Relations Center because of the Dealer eTraining philosophy. What happens when a brand new GRC department that in the beginning does not have enough leads as the dealership is making the investment to buy more advertising opportunities? What happens when after going through old, dormant, dead (or whatever you call it) opportunities as well as new ones there is still enough time to make more calls?

A GRC department that Dealer eTraining has recently installed has received an incentivized opportunity to help F&I increase product penetration. They were offered a little something extra if they bring the customer back for a second opportunity (they get paid an incentive based on the product and only if it gets sold). At first when the idea was presented to me I was skeptical because the goal is to generate traffic to sell more cars. However, I did a lot of thinking. I realized that Guest Relations departments should do proper after sale follow up. I also realize the importance of the profit that F&I generates for the store.

In fact, when considering how many dealerships sales departments remain profitable because of the “found income” (F&I) it makes sense to incorporate some follow up to increase product penetration. The reality is that not everyone will make an appointment and come back to hear a presentation. However, a few customers might consider it and come in and even buy something. Remember, we call them guests because we want them coming back to us and not customers (they just come and go). Consider offering the customer a small incentive to come back for an appointment. What business manager is going to refuse an opportunity to sell an extra warranty or insurance product?

Let's evaluate this and consider a dealership that sells 150 units per month. Out of the 150 units there might be a percentage that is leasing (the common thought is that we cannot sell them anything). There will be a percentage that is paying cash and refuses to finance (the common complaint is that it is hard to sell them something extra). Let's say out of the 150 deals there were 30-40 deals where extra income was not generated (for whatever reason). So now we incorporate a phone process to attempt to bring back these 30-40 customers. Maybe only half of them decide to come in (15-20). If we can sell half of them 7-10 a warranty or tire & wheel we now increase product penetration. If each deal averages out to an additional $300 profit per deal we are looking at an additional $2100-3000 profit.

Now just imagine taking these statistics in a high volume store that sells 400+ units per month. BOOM!

It might not sound like a lot of money. However, the follow up is being done anyway (or at least is should be). Why not take a shot at an opportunity? The benefit to finance managers is they increase their spiffs from the product vendor and their performance is measured. The GRC representatives earn some extra money. But here is where that extra profit comes in handy. Dealers are always evaluating and concerned about the BDC (GRC) being a huge extra expense. This is what causes them to make drastic change and not have the right success in the BDC.