Whether you are a franchise or independent dealer principal, you want to offer the perfect blend of F&I products that match your inventory and your customers – as well as delivering the highest revenue. It can be tempting to pick and choose products from a couple different providers, in search of the perfect mix. But at the end of the day, there are many drawbacks to taking an ‘a la carte’ approach to your F&I menu. Let’s consider a couple of case studies to shed some light on the challenges of an ‘a la carte’ approach.
Independent dealer streamlines F&I, sees business and revenue boost
Novak Motors prides itself on the quality, value, and level of service offered within each rooftop, and has been recognized as the nation’s #1 lease return outlet. With locations in Texas, New York and New Jersey, this leading independent dealer has been recognized by CarGurus, CARFAX, and DealerRater. But with all of these accolades, there was one major issue. Novak’s sales, F&I and back-office accounting teams were expending vast amounts of valuable time reconciling around three very different F&I providers.
Each rooftop was being serviced by a local F&I provider, offering different products that did not align across Novak Motors. While this approach might have worked in the past, today’s digital sales model has dealers selling vehicles across a number of locations. Trying to put together a customer-focused F&I package from three unique providers was nearly impossible – and was clearly leaving money on the table. An F&I audit quickly revealed the issues and the lost revenue. Dealer principal/owner Jim Calvert made the strategic decision to align under one provider, EFG Companies, positioning them as a strategic extension of their business. After one year of making the switch, Novak saw a 15 percent increase in unit sales, a 24 percent increase in VSC penetration, and a 21 percent increase in PRU. Novak also benefited from EFG’s proprietary recruiting methodology, its guided-discovery training model, and ongoing in-dealership engagement to streamline and maximize efficiencies in the F&I process.
By abandoning the ‘a la carte’ method, Novak also benefited from greater visibility into the auto group’s performance as a whole, enabling the company to make more strategic decisions to achieve long-term goals. “Within one year, I’ve received more data from EFG than my entire 20 years in the industry working with other providers,” said Calvert.
Veteran franchise dealer boosts customer and employee satisfaction
20-year industry veteran Nyle Maxwell’s primary goal was to increase his auto group’s sales and customer satisfaction momentum, recognizing that satisfied employees lead to happy customers, increased sales and increased profit.
“Our people are what make my company succeed,” said Maxwell. “Employee satisfaction means just as much to me as customer satisfaction and I’ve found the best way to motivate my employees is through regular training. If my employees know how to take care of their customers, the bottom line will take care of itself.”
With this in mind, EFG worked with Nyle Maxwell to implement significant training and recruiting initiatives across the company’s six rooftops, to align the dealership on culture, compliance, and performance with the goal of:
- Increasing profit per unit
- Driving unit sales
- Dominating the market
In addition to providing Nyle Maxwell with top performers through EFG’s proprietary recruiting and training methodology, EFG also recognized that to achieve Maxwell’s goals they needed to provide a value proposition beyond excellent customer service.
With this in mind, EFG developed Maxwell Forever, a private-labeled program based on EFG’s Drive Forever Worry Free Limited Lifetime Powertrain Protection. Maxwell Forever spoke to Nyle Maxwell’s brand promise of demonstrating a commitment to his customers, and rounded out the auto group’s F&I product portfolio by providing customers with complimentary coverage and F&I managers with an easy transition to upgrade customers to increased coverage levels.
After adopting the custom program, the Nyle Maxwell family of dealerships experienced a 36 percent year-over-year increase in F&I gross in used cars, a 27 percent increase in VSC penetration in used cars, and a 28 percent increase in overall VSCs sold. An ‘a la carte’ approach of just providing the product without the training to back it up would not have generated this level of revenue gains.
As we look toward a potentially more challenging 2021, both independent and franchise dealer principals need to look closely at opportunities for revenue. An internal F&I audit can reveal holes that are leaking unknown revenue as well as performance inefficiencies. Contact EFG today to give us the opportunity to review your F&I profit mix and provide you with the right solution for your business goals.