Creating a Culture of F&I

Q4 is here and that means it’s time to reflect on where your business is today and plan for what lies ahead in 2016. Many dealers not only forecast their future business, but also develop plans to create a cohesive team and workflow between all functional areas of the dealership.

Everyone knows the F&I department is an important driver of profitability – they get deals bought, sell profitable protection products, and ensure the delivery of the vehicle. Successful dealers don’t just think of F&I as a department, rather they adopt a culture of F&I throughout the dealership.

A culture is a way of life of a group of people – the behaviors, beliefs and values that they accept and pass along. As a dealer, do you understand the benefit of having your sales and service teams adopt an F&I culture? Where the employees believe in and accept the value of the F&I process and products as a way of doing business and impart it on everyone in both the showroom and service drive?

It’s obvious for dealers to see the value of training your sales team on F&I products.

Your sales people know many of their customers today work on a tight household budget. With a culture of F&I, they also know how a VSC helps them stay within that budget when their car unexpectedly breaks down. Or, that GAP protection will ensure customers can pay off their vehicle in the event of a total loss.

With knowledge and understanding comes acceptance of F&I. Training the sales team on F&I products, their features and benefits to consumers, and their value to the dealership as a whole will better equip them with the ability to familiarize customers with your products, ensuring a smoother transition to the F&I manager.

What may be less obvious to dealerships is how creating a culture of F&I benefits the service drive.

According to NADA, regular service customers are 17 times more likely to buy their next vehicle from their servicing dealership. Almost every product sold in F&I is geared towards increasing service drive retention. The language in most vehicle service contracts and maintenance contracts highly recommend customers bring their vehicles back to the selling dealership.

In addition, by educating the service department on the value of F&I products, you equip them to better serve their customers, creating a better customer experience and higher retention.

A knowledgeable service advisor can easily explain the benefits of a vehicle service contract or maintenance plan to a customer at a time when it is most impactful – when they see the actual cost of vehicle repairs. This can easily convert service customers to sales and F&I customers.

Imagine if every service advisor had the knowledge and ability to convert service customers to sales and F&I customers. Considering how many customers that service advisor sees in a day, or a week, the opportunity to drive customer retention and satisfaction increases substantially.

Creating a culture of F&I can significantly increase customer retention in every department. Remember, according to NADA, an increase in customer retention rate of just 5% improves dealership profit by 35%. And, it’s always less expensive to keep customers than to pursue new ones!

The only way F&I becomes a culture is by training your entire team on the value of F&I products. They can’t pass along what they don’t know, and won’t pass along what they don’t believe in. Creating a healthy culture of F&I throughout the entire dealership can have far reaching benefits, including higher customer satisfaction and CSI scores, higher service drive retention, and higher sales retention. Everyone believes it, embraces it, and ultimately, F&I becomes a way of life for dealership operations.

With almost 40 years of experience helping dealers achieve their profitability goals, EFG Companies knows how to turn your entire team into an F&I and sales driving machine! Contact us today to find out how.