Just as sports teams suffer a few injuries along the road to championships, dealers inevitably suffer economic downturns as they work toward overall profitability. In both scenarios, preparedness and the ability for the team to pivot quickly can make all the difference. Teams win because they prepare to effectively respond to all opportunities and obstacles that could arise during play. When every teammate does what they are supposed to according to the game plan, the odds go way up that the team will win.
Now that we’re facing a challenging economy, your team is likely focused on improving PVR and overall performance throughout the inevitable period of recovery. The good news is that the game plan may not have changed as much as you think – you may just need a few tweaks to strengthen your lineup.
Each of the factors below are important parts of a dealership’s game plan during the best of times, but they become critical during times of uncertainty. Are any of these four must-dos missing or underperforming at your dealership? If so, a dedicated, comprehensive plan could be what it takes to help you weather this storm and drive PVR moving forward.
No. 1. Reposition F&I customer education to early and often in the sales cycle.
Today’s customers expect more transparency, so dealers need to adjust how and when they talk about F&I products. This repositioning is a central part of capturing more service contract sales.
Research tells us that consumers start the car-buying process online 80% of the time, so dealers can increase F&I attachment rates by providing F&I education and resources on their websites. Not only do consumers expect this for convenience and transparency, but it also pre-positions the dealer as a trusted advisor who has answers and wants to help. As social distancing continues to be top of mind for the foreseeable future, your online presence, including your F&I products, should be an important part of your game plan.
This doesn’t mean to only educate online. F&I conversations ideally should be happening throughout the sales cycle because they, like the vehicle itself, improve customers’ lives by supporting their lifestyles. The old way of selling F&I products at the end of the transaction positioned them as add-ons, but with today’s technology-dependent vehicle systems and on-the-go lifestyles, consumers are prioritizing convenience and easy protection solutions.
Take a look at our latest blog on digital retailing to start building a plan for selling F&I products online at your dealership.
No. 2: Train FSMs to consistently use the right discovery questions.
A key part of improving F&I attachment rates is doing a better job of communicating the value of F&I products to consumers. This might seem obvious, but it doesn’t happen without high-quality training and consistent execution. For example, Assurant Resource Automotive uses interactive training methods with group discussions, role playing, and individual performance evaluations to ensure each FSM has a thorough understanding of discovery methods and applies them consistently.
These methods include questions designed to determine where in the consumer’s driving habits and lifestyle your F&I products meet a need, as well as how to recognize when to steer the discussion to another discovery question tied to an appropriate offering. There’s a big gap in the industry between consumers who are aware of F&I products and consumers who see the value in those products, which means consistently using discovery questions can be the winning move in a sale. For example, 92% of auto shoppers know about vehicle service contracts (VSCs), but only 37% purchase them. Being able to clearly demonstrate the precise value of a VSC to a customer is a powerful skill.
Get started with a free, 2-hour F&I or sales training webinar.
No. 3: Engage management and build leadership support.
Just as on a championship team, your managers and leaders need to actively support your plan on the back end for it to be successful on the field. Ambition shouldn’t just happen at the individual level. It can be a hallmark of your entire organization.
A complete F&I sales improvement plan includes methods and tools that facilitate this buy-in. Some of these include:
- Establishing formal goals, objectives and processes.
- Adjusting your compensation model to keep your team motivated and drive success.
- Providing continuous feedback about individual and team performance.
- Adding fill-in resources when needed, so you don’t miss opportunities.
Schedule a free revenue analysis with an Assurant expert to start building the right game plan for your dealership.
No. 4: Have multiple options for F&I revenue generation
Increasing revenue from F&I products shouldn’t be limited to sales transactions. Participation options can provide additional revenue based on risk tolerance and need.
Some F&I providers don’t have robust offerings for reinsurance participation, and this limits the ways dealers can improve their overall revenue and profit with F&I programs. For example, do you have a goal for long-term income growth, or do you need cash flow now? Or maybe your needs fluctuate between these. Having access to a robust lineup of options, and the ability to switch, means your F&I participation can be adjusted as your needs change.
Participation options aren’t always emphasized when considering an F&I provider, but it can make a big difference in the flexibility dealerships have to choose the best model for now and in the future. This is especially true right now, when dealers may need to consider participation models that help them generate immediate cash flow. Do you know if your participation model is best suited for your goals?
Take a look at Assurant’s First Extended Dealer Obligor program, which offers increased ability to generate cash flow.
Bringing It All Together
Let’s talk about your game plan. We want to be on your team.