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Contributing Author:
Joe Williams
Account Executive
EFG Companies

We’ve all experienced the repercussions of chargebacks. A customer refinances their auto loan and the dealership loses the rate markup. A customer cancels their products and the dealership loses the profits from those. Often, the negative effects roll downhill all the way to the F&I manager’s paycheck.

The goal, of course, is to minimize chargebacks. But, how can your F&I managers go about it? First, it’s important to understand what causes customers to refinance and/or cancel their consumer protection products. So, let’s start by putting ourselves in the customer’s shoes. Right or wrong, the F&I office is sometimes seen as a high-pressure environment. The in-depth discussions about their financial situations might make some customers disengage. If a customer leaves the finance office more disengaged, and feeling like they were pressured into a deal, you might have a refinance and cancellation on your hands.

The challenge for your F&I managers is to keep customers invested in the conversation and tone down the high-pressure atmosphere of the office. How? Simply go back to the basics of providing good customer service.

Reducing Chargebacks: Building empathy with the customer

How do your F&I managers introduce themselves to your customers? Where do they first meet the customers, on the sales floor or in the F&I office? Do they jump right into a customer’s finances, or do they take a minute to build excitement around the purchase?

At EFG, our trainers encourage F&I managers to introduce themselves to customers on the sales floor, asking customers what brought them in to make a purchase, and congratulating them on their choice. The goal is to use the introduction to connect with the customer and lay the ground-work for the F&I manager to quickly build a relationship with the customer and serve as the customer’s advisor in the vehicle purchase process.

Reducing Chargebacks: Attentiveness and active listening

During the introduction, credit application and warranty review, F&I managers have the opportunity to glean information that can help them tailor the F&I presentation to the customer in front of them. However, this requires building upon the advisory relationship, asking customers open-ended questions, and listening attentively. If they get a customer to open up, but they can’t remember what the customer said, they will have a hard time relating the benefits of your F&I products to the customer’s life and overcoming objections.

Reducing Chargebacks: Clear communication and product knowledge

There can be no clear communication without product knowledge. F&I managers need to know consumer protection products backwards and forwards in order to highlight the specific benefits that will most resonate with the customer in front of them.

Reducing Chargebacks: Goal-oriented focus

The F&I manager’s goal should be to provide the customer with financing that meets their credit and payment ability, and with valuable consumer protection products. And, that goal should be communicated to put the customer at ease and make them feel like they have an advisor on their side. When it comes to the product presentation, once again, your F&I managers should remind customers of your dealership’s dedication to their ownership experience and explain how each product benefits them directly.

Reducing Chargebacks: Time management

This is a biggie in today’s world of instant gratification. For years, customers have been asking for a shorter finance process. However, dealerships still struggle to keep the finance process under 30 minutes. Aside from finding areas to streamline or investing in technology to speed up the process, we teach F&I students to break down the finance process into its component parts:

  • Introduction
  • Credit App
  • Disclosures
  • Warranty Review
  • Product Presentation
  • Menu Presentation and close

Before each part of the finance process, F&I managers have the opportunity to reset their customers’ clocks by informing them how long the next process should take. At the end of each process, they should let the customer know whether they stayed within the time constraints, or if they even saved time. This helps the customer feel like the process is moving along.

At the end of the day, your customers should drive away feeling like they purchased the vehicle they wanted at the price, financing, and terms they wanted. And, they should feel comfortable with their decision to protect their second-largest investment. For this to happen, your F&I managers should take a customer-first, consultative approach to the finance process.

With more than 40 years of helping dealerships achieve their profitability and productivity goals, EFG Companies knows how to train your team to increase product penetration while reducing chargebacks. Contact us today to learn how.

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