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Contributing Author: John Stephens Executive Vice President EFG Companies

Contributing Author:
John Stephens
Executive Vice President
EFG Companies

One of the biggest struggles many dealerships have is breaking the different departments out of their silos to work together towards dealership initiatives. Sales teams tend to focus on just increasing front-end margin. On the other side, F&I teams tend to focus on back-end margin, financing, and product sales. The service drive considers itself completely separate from sales and finance, working towards completely different goals.

While the individual goals of each department are important, if they aren’t aligned under a general strategy for the dealership, they can often create tension and even serve as a deterrent to achieving larger dealership initiatives. While this may seem odd, just go with me here. To keep everyone aligned, go back to the basics of marketing: Product, Place, Price and Promotion.

Product and Place

Does your inventory mix meet the needs of your target consumer demographic? To determine this, take a look at your sales numbers for 2017 and look at what type of vehicles were the biggest sellers, i.e. sedans, SUVs, Trucks, etc. Talk with your service department to get a better understanding of what type of vehicles are coming through the service drive and the costs associated with certain repairs.  The service department can demonstrate where attention is needed relative to new technology and cost of repair as well as the costs of certain repairs for certain models.

For example, if you sell a large amount of diesel vehicles, your service department can provide you an overview of just how much more maintenance this vehicle requires, and the associated cost of that maintenance. This knowledge can then be applied in sales and F&I to better promote the benefits of a pre-paid maintenance plan for diesel vehicles.

In addition, by involving the service drive, you’re going a long way toward bridging the gap between service and sales by demonstrating that your service managers have good input to share with both sales and F&I.


Is your inventory eligible for financing? Answer this question by, again, evaluating your 2017 numbers to determine what percentage of sales were cash deals or financing. Within those financing numbers, take a look at how many deals included F&I products, and how many just covered the vehicle. If you don’t like what you see, there could be several simple fixes.

First, remember that your product determines your price. Take a look at your inventory mix, understanding that your inventory can determine what your F&I goals. For example, let’s say in 2017 your pre-owned finance penetration was 75 percent, but this year you are stocking more cash cars, priced below $6,000 on your pre-owned lot. Because these vehicles are ineligible for many products being offered due to mileage or age, you need to review products available and outfit your F&I menu with products that can be offered for those older model higher mileage vehicles and eliminate the so-called “ineligibles.

Whether you sell $50,000 new vehicles, or $10,000 pre-owned vehicles, it can be difficult to secure financing if your sales team isn’t taking F&I goals into account.

Think back to your “road-to-the-sale” training. Prior to demonstrating any vehicle, all sales people need to conduct an initial meet and greet, and qualification interview. While asking people about the type of vehicle they want is important, it’s equally important to ask simple qualifying questions, like:

  • What do you do?
  • Where do you work?
  • How long have you been there?
  • Do you own your home or rent?

The last thing your sales team should want is to put a customer in a vehicle they can’t afford. Once the customer gets to finance, they could lose the sale. If the customer stays, the dealership could still lose front-end margin or back-end margin – hurting sales and F&I commissions, along with dealership profitability.

When sales and F&I teams work together to land customers on a vehicle they like and can afford, the dealership has a better opportunity to secure financing to cover both the sale of the vehicle and F&I products, as well as the opportunity to service that vehicle. And, we all know that according to NADA, 83 percent of the people who service their vehicle with a selling dealership at least three times in their first year will purchase their next vehicle with that dealer.


The final step in creating an integrated dealership is to involve all departments in dealership promotion. Now, it can be tempting to only focus on inventory when promoting the dealership. After all, that’s the way it’s been done since the 1980s. However, today’s more demanding consumers want more than just product to get their business. They want to know why they should purchase at your dealership versus the one down the road, and price is no longer the main differentiator. This is actually good news, as these consumer demands can actually help foster a more integrated team mentality among sales, F&I and service.

If vehicle price is no longer the only point for promotion, customer service rises to the top. And, for dealerships to promote their levels of customer service, then a customer-first mentality needs to be present in all departments. The sales team presents vehicles meeting the customer’s wants, needs, and financial ability. The finance team provides financing and products that the service team has qualified as providing valuable benefits that customers need. During the sales process, customers are introduced to the service team, and during the service process customers are offered additional benefits for continuing to give their business to the dealership.

Of course, you can’t get to promotion without having the right inventory, F&I products, training, and financing. With more than 40 years helping dealerships achieve their profitability goals with product administration, training, recruiting and marketing services, EFG Companies knows how to put you on the road to success. Contact us today to get started.

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