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Contributing Author: David Robertson, Executive Director, Association of Finance & Insurance Professionals

Contributing Author:
David Robertson, Executive Director, Association of Finance & Insurance Professionals

The number of F&I professionals laboring under impossible F&I performance bogies appears to be on the decline. However, enough still struggle to warrant addressing the inequity of this scenario – with a few tips on personally avoiding the catch-22 trick bag.

The story is always the same. You must meet two requirements to keep your job. First, you can’t cheat the customers – commit an illegal or unethical act – or you’ll get fired. Second, you must consistently hit your performance quotas – IPRU, product penetration thresholds or a combination of both – or it’s adiós as well.

On their face, both requisites appear to be reasonable demands by any employer, regardless of the industry. However, in our business, they can carry a sinister and unspoken twist. By design, it’s virtually impossible to achieve the production thresholds set by management without “cutting corners” at some point in the F&I process. 

“But wait a minute, if I clip customers, I’ll get fired.” Well, not quite; if you get caught cutting corners, you’ll get fired. And, when it occurs, the manager who set those unattainable performance standards will be at a loss for words as to how or why it happened.

With few exceptions, there isn’t a dealership executive worthy of his or her demo and dealer tag who doesn’t know what constitutes realistic and sustainable income-per-retail-unit and aftermarket product penetration standards. It’s simply smart business to implement realistic performance objectives designed to bring out the best in one’s employees. Unfortunately, unrealistic objectives have the potential to bring out the worst in them.

And that’s exactly what purveyors of the catch-22 performance programs are counting on. “If I don’t hit my numbers, I’ll lose my job – and my ability to provide for my family.” A feeling of desperation that sets in motion a self-deceiving process that starts with, “If I only finesse this one customer, I’ll make my month.” A one-time indiscretion that quickly morphs into a pattern of practice. The hidden intent of the catch-22 performance standard quotas.

In my view, this scenario constitutes willful ignorance on the part of dealer management. A manager knowingly establishes performance objectives that cannot be achieved ethically, legally or logically – coupled with the admonishment that all transactions must be conducted in accordance with state and federal regulations and dealership policy regarding ethical conduct.

The key caveat is always left unspoken or undefined: “The F&I practitioner is left to his or her own devices to satisfy both requisites.” Ostensibly relieving the manager of any culpability when the bad acts are inevitably exposed.

Avoiding the Catch-22 Trick Bag:

  1. Perform Due Diligence in the course of interviewing, or during the introduction of a new direct manager with authority over the F&I department or the launch of a new sales practices policy, to get a clear understanding of the performance expectations and metrics (IPRU, products, CSI, charge-backs, etc.) of the potential employer, new regime or program. Ask questions about past activity and outcomes, using examples based on actual prior performance – not pie-in-the-sky hypotheticals. Reduce as much as possible to writing. Optimally, the sessions should be attended by those with greater authority than your direct boss, hopefully the general manager or dealer principle.
  1. Understand Expectations. Are the expectations in sync with the tools required to achieve them? Does the dealer contract for training in comprehensive product knowledge, conversion techniques, and the governing state and federal regulations? Does the store enforce 100% turnover, offer administrative assistance, provide a full array of funding and leasing resource options and a full complement of aftermarket products? Is the pay plan commensurate with the expectations?
  1. Be Realistic. If upon thorough investigation of all relevant factors and serious contemplation of all the variables, the performance standards appear to be unattainable – they’re generally unattainable. Save yourself the frustration, and career detour, that come with failing to do the impossible.  

If your boss wants to cheat customers for unrealistic economic gain, let him step up and do it himself. Truly successful dealerships utilize pay plans that, while motivating, set realistic expectations and goals. You want to be with a dealer that will make you better at your job in all aspects, including compliance and customer service. The better you become, the more profitable the dealership becomes, creating a win-win-win scenario, for you, the dealership, and the consumer.

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