In a recent 2019 year in review article, Automotive News noted that new vehicle sales and F&I profitability were higher than what was originally predicted at the start of the year. As the article analyzed the trends that influenced this better-than-anticipated outcome, a broadening interest in education, online F&I research and growing F&I training programs were all factors cited.1
There’s no question that consumers are more informed than ever, with most auto shoppers conducting online research ahead of making their purchase decision. Your customers may already know the model, options, and paint color they want before visiting your dealership. And that means your customer experience has already begun and could extend to the F&I products you count on to drive up your margins, too.
As online and in-store interactions comingle to drive a complete customer experience with your dealership, many F&I teams are evaluating the role of digital retailing when it comes to F&I product sales and how to train F&I staff to drive profits in the hybrid world of digital and human-driven sales.
Below, our team of experts shared a few tactics that could help your team combine the online and in-store customer experience to increase dealership profit margins.
4 Tips From Our Team of Experts
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Provide F&I product information online to increase attachment rates
Given the critical role F&I products play in car dealership profit margins, it makes sense for them to be a central focus of the car sale throughout the process. Rather than wait until closing the sale to talk about F&I, let customers research your F&I options on your website as they shop. Studies show that customers who research F&I products during the pre-buying process have higher attachment rates at the end of a sale.2
By being able to conduct F&I research on your own website, buyers will be more prepared to purchase both a vehicle and F&I products once they come into your dealership. The Assurant Digital Engagement Toolkit can help you provide downloadable F&I product information, including easy-to-understand videos in English and Spanish that can make the value of protection products more accessible for your customers.
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Ask lifestyle questions to build a dialogue around the need for F&I products
These questions promote active listening and can help your F&I team better understand and drive the customer’s needs so you can position F&I as a relevant solution to potential problems instead of another product to buy. It’s important for the owner of a vehicle to picture themselves or their family in a situation where the products would benefit them. Questions to ask could include:
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How many miles a year do you usually drive? Discovery questions help determine which products and what level of protection best suit the customer’s needs.
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What technology feature on this new car excites you the most? This sets up a discussion about the high level of technology inside the car and the urgency to protect against the high cost of repairs or replacement of that tech.
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Where do you plan on taking your first trip in your new car? No one wants to break down away from home. This helps you explain the benefit of nationwide protection and included roadside assistance in protection products.
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Do you have room in the garage for the new car? Where do you normally park? This can help you determine the need for environmental protection, GAP or a theft deterrent product.
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Build an understanding of maintenance and repair costs:
According to an Assurant study, 72% of customers opt for third-party mechanics because they think they’ll get overcharged at the dealership.2 In reality, most car buyers don’t have a clear understanding of the costs of maintenance or the benefits of in-dealership maintenance and repairs. The national average cost of car repairs is $1,186 a year, but more than 85% of vehicle shoppers expect to spend less than that on repairs.2 Help your customers understand the true cost of repairs and see the value of protection products by inviting them to do the math. Keep it simple by focusing on one product at a time.
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Leverage F&I training to deliver positive customer experiences
Your F&I team comes from a variety of backgrounds, education levels, and skillsets. That means you need to train them not just on F&I, but also on industry fundamentals and professionalism. The Assurant Performance Institute™ provides formal classroom education, flexible online coursework, and in-person training for your dealership. This unique training is tailored to your specific dealership and employees so they can learn to build the customer relationships necessary to drive revenue in today’s sales environment.
An important distinction between F&I training providers is whether or not their training is a one-time event or a long-term game plan based on performance. If you can’t measure changed behavior, the training can be seen as a wasted investment. Assurant’s interactive teaching method simulates real world customer experiences, and one-on-one training continues at the dealership with regular performance evaluations to ensure a better experience and improved performance over time.
These four tips on F&I credibility scratch the surface of what Assurant can help you achieve with our automotive dealer partner solutions. Learn more to find out how we can help you connect with customers and achieve your F&I revenue and profit goals.
Next Steps to Help Increase Your Profit Margins
When it comes to growing your business and optimizing sales, it’s important to have the right partner to accelerate opportunities. We know it’s important for you to increase profits and provide customer satisfaction, so we’re sharing our insider knowledge. With over 50+ years in the auto industry and an entire team dedicated to F&I training and client support, we filmed members of our team sharing some of their most valuable tips for reaching customers and helping your business thrive.
Get More Assurant Insider Tips
Sources cited:
1 Automotive News, “2019 in Review” by Jackie Charniga.
2 Assurant 2018 study, Inside the Automotive Customer Experience.