The F&I Turnover Is a Vital Dealership Tool – So Make Sure You Have a Process to Do It Effectively - By Justin M. Osburn
Meat on the bone. That’s what dealership management and F&I managers want when it comes to in-store processes that maximize profitability.
Menu selling is a term everyone knows. But a real substantive sales/F&I process is often underdelivered.
As I reflect, I find it’s true that many of our warranty and reinsurance clients don’t have a solid F&I process before we get in the store and get to work.
It’s more of the same. You get it – it seems like the only way to prevent long waits for your customers is by shortcutting F&I sales. It’s not because you don’t want to improve back-end profitability, it’s just your limitations in people and process.
The F&I managers on the team, typically, are lacking a process and training.
So here it is – some introductory thoughts on one of the most critical F&I selling steps, one that can make a marked difference in your back-end PVR.
In far too many dealerships, the F&I TO (turnover), or customer interview, doesn’t even take place. But it is absolutely necessary because it’s such a vital tool for your operation and your customers.
I’ve seen dealerships that don’t close customers and throw them into F&I, dealerships with no relevant desking offense… I mean the list of breakdowns goes on and on.
So let’s take a moment for a brief overview of what a solid TO/customer interview is all about.
Before we begin, let me set the table and emphasize that the entire point of an F&I TO is to build rapport with customers and gather some background information to support what you’ll sell them.
Also, while it might sound counterintuitive, the F&I TO, if done effectively, speeds up the customer experience at the dealership.
That said, let’s dive in.
THE MEET AND GREET
Best practice for the TO introduction is for the F&I manager to go to the sales professional’s desk.
Don’t bring customers into the F&I office or move customers for the interview. Keep them comfortable.
Open with your name and title. Then quickly let the customer know what your four priorities are with them.
Those four priorities are ensuring their information is correct for titling and registration purposes, explaining funding options, reviewing what is covered and what is not when they leave the dealership and, finally, getting them on their way in their newly purchased vehicle as quickly as possible.
We train our clients and their F&I managers with word tracks detailing what to say throughout this entire process, but for brevity here’s an overview.
REVIEW THE FIGURES
After sitting down and joining the customers, attempt to build some quick rapport.
I’ve always trained on the FORM acronym to quickly build rapport. If you’re unfamiliar with FORM, it stands for family, occupation, recreation and motivation – basic topics you can talk about to create a conversation.
Next, using a credit application, review the prospect’s information for accuracy. Prior to reviewing figures, ask a series of probing questions to identify the customer’s potential product needs.
A few examples: How long do you plan on keeping the car? Did you or your sales professional verify your payoff? Is this the correct insurance information?
From here, a critical step is to review the agreed-on figures with the customer. That typically sounds like, “I understand you agreed to ____ months at ____ percent, with a down payment of $____ and $____ per month. Is that correct?”
That’s a best practice for many reasons.
First, obviously, for compliance. We want to ensure full disclosure is being made to the customer well in advance of purchase and contract execution.
We also want to be certain we’re on the same page with the customer as the deal is typically migrating from the desk or sales floor over to the F&I department (if applicable).
And we want to confirm the vehicle and the numbers are closed and there is no misunderstanding.
NEEDS DISCOVERY
Needs discovery is a fantastic tool to use in the TO to make sure customers are aware of their liability when they leave the dealership.
This is similar to the “We Owe” explanation in that we’re letting customers know what the expectations are once they take delivery.
For this part of the TO, we train our F&I managers to walk through what warranty is and isn’t remaining on the vehicle and who is responsible for safety inspections moving forward, as well as regularly scheduled maintenance and wear items.
Also, we want to spell out what is and is not covered. Make sure customers understand that the interior and exterior of the vehicle are not covered, nor are the tires and wheels, and theft and total loss.
We sketch out diagrams to illustrate the non-covered items of ownership as we walk customers through them, but the point is to be certain they’re clear about the list of seven or eight items they’re responsible for when they leave with their vehicle.
We also highly recommend including customers in that process by asking them if they understand what happens in the event any of those events occur. You want to make sure they really grasp what can happen to diminish their overall ownership experience.
Certainly, we want to prevent any potential negative experiences for our customers. Great word tracks make that discovery interactive and very informative for the customer.
TRANSITION TO THE BUSINESS OFFICE
Once we walk customers through their potential liabilities and illustrate them, the TO is concluded. Now it’s time to simply transition them to the business office.
That’s done by communicating to customers that you’re going to get the paperwork started, and you’ll be back with them quickly to get them down the road.
Offering a beverage or snack can be a good gesture at this point.
SUMMARY
The F&I manager can now return to his or her office, adjust the menu if necessary, print the initial delivery forms and prepare for the closing and documentation signatures with the customers.
This is a best practice structure of an F&I TO or customer interview. If your team is weak in that area, spending time developing it out will really support the next few steps in the process – moving through delivery of the vehicle and providing customers with options to cover their exposure in their ownership of the vehicle.
While I don’t have the space here to provide all the illustrations, training material and word tracks we use, we can certainly send you more information about them. Just email me at justin@arcnation.com and type “F&I TO materials” in the subject line. Our team will send those tools to you.
If you’d like more information about our warranties, reinsurance, F&I products and delivery training programs, feel free to follow this link and contact-us here. Our team of F&I experts (Car Guys) will be happy to review your current setup and/or provide you with a no-cost audit of your F&I products and processes.
Justin M. Osburn is founder and CEO of ARC Nation™, an Army veteran, a renowned dealer educator and industry speaker, and a self-described student of the auto industry. In addition to roles as a sales professional, F&I manager, general manager and dealership owner, Osburn served as retail 20 Groups moderator and consultant for the National Independent Automobile Dealers Association and was lead instructor for NIADA’s acclaimed Certified Master Dealer course. For more information, visit arcnation.com, or email justin@arcnation.com.
