Recently I stumbled across the Bill Murray movie Groundhog Day. I was quickly drawn into the plot – weatherman Bill Murray is reluctantly sent to cover a story about a weather forecasting “rat” (groundhog!). This is his fourth year to cover the story, and he makes no effort to hide his frustration. Upon awaking the ‘following’ day, he discovers that it’s Groundhog Day again, and again, and again. Bill Murray is forced to repeat the same activities day after day.
While this occurrence seems horrible in real life, it is the perfect scenario in the F&I office. Work the deal. Close the deal. Repeat – the same way every time. The rules and regulations imposed by the FTC demand that powersports dealers offer the same menu of F&I products to every customer… every time. But there’s more to be said for consistency. Sometimes, it can mean the difference between boosting profitability or leaving money on the table. How do you ensure consistency with every sale?
Consistency can be difficult to achieve. Let’s face it, every sale is different: different customer – different financing requirements – different person closing the deal. The combinations can seem endless. But there are two areas within F&I that can deliver consistency every time.
Consistency on the front end
While the sales person creates a “profile” of the customer during the interview process, the F&I “truth” is not fully revealed until that customer sits down in the office. Beyond federal requirements, it’s a prudent business decision to offer each customer the full menu of F&I products. Forming perceptions and pre-conceived notions can translate into leaving money on the table. The excuse of “He didn’t look like a prepaid maintenance guy” can equal several profit percentage points.
Make sure your menu of F&I products is always current. Does everyone know your flagship product has been enhanced to be more competitive with more coverage and additional benefits? Are they up to speed on the additional classes added to the product? You should always know the answers to these questions. Establish a practice of reviewing and updating your F&I menu at least monthly. If you receive new marketing materials, ditch the old literature – or recycle it and support your local school! Ensure that everyone is up to date on the products provided and their details. In fact, require your provider to offer frequent training on their F&I products.
And speaking of training, don’t rely on employee interpretation when it comes to understanding the details of potentially complex F&I products. Simply announcing to your team that you have a new product available – and handing them a brochure – leaves too much to chance. This hands-off approach guarantees inconsistency. A good training program will take you a long way toward consistency in the F&I office.
Consistency on the back end
Because each deal is finalized in F&I, this area of the dealership is the ultimate test of consistency at the end of the sale. Ensure there is a checklist in every jacket that includes at least all of the following:
- Completed Credit Application
- Authorized Credit Report
- Purchase Order
- Insurance Verification
- Driver’s License Verification
- Red Flags
- Privacy Discloser
- Privacy Notice
- Risk-Based Pricing Disclosure or the Credit Exception Notice
- Adverse Action Notice
- Payoff Information
- Customer Down Payment
Before closing out a deal, double check every item. F&I is the connector between all of the powersports dealership departments. It’s F&I’s responsibility to meet with every person who touched the customer and double check their items were completed. When your local, state or federal auditor arrives, having complete checklists in every jacket will ease the review process.
While consistency may seem boring, failure to implement a proven F&I process can result in lost profits and a compliance mess. Feel like you’re having a Groundhog Day at work? Great! You’re one step closer to maximizing profitability.