Tag: consumer protection products

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Dealership Training Economy

Make More Money on Returning Lessees

Contributing Author: Stephen RoennauRe-stating the obvious

  • Consumers held on to their cars much longer than normal during the recession or simply did without.
  • Post-recession consumers slowly came back into the car market. However, they were much more wary. Leases and used cars did better on average than new-vehicle sales.
  • Now, those lease terms are coming to a close, and dealerships can expect an influx of returning lessees, whom they can turn into new-vehicle owners.

What this means for 2014

According to “Automotive News”, General Motors saw those lessees start returning in November and they have only continued to grow.

Returning lessees pose a huge opportunity for dealership profit in 2014. Why? Because you’ve already done the legwork.

You’ve already built an ongoing relationship, bringing these consumers back to the dealership on a regular basis. Lease customers are on the hook, now you just have to reel them in with superior service and products.

What do we mean by service?

First there’s the follow-up. Evaluate your contact strategy for this audience. When do you begin contacting them? What is the contact frequency? What are your messages for this audience?

Remember, you don’t want to spam them, but you do want to stay top-of-mind. This is most easily done with your content rather than frequency. For example, many people, especially first-time lease customers, do not fully understand the process for lease-end. Educating them on the available options and inventory can go a long way toward influencing their purchase decisions.

You can also use your email communication to invite the customer in for a free trade appraisal to see how well the vehicle is holding its value. Simply getting them back to the dealership dramatically increases the chance of retaining lease customers. Remember, the customer who leased three years ago may be able to take advantage of better options. Many captives have stronger lease offers. Residual values in general have increased and the market has stabilized. Also, some lease programs waive the acquisition fee or security deposit on a re-lease or have other incentives for loyal lease customers. All these things add up to a greater opportunity for you to retain that customer.

In addition, it’s important to evaluate their experience in the showroom. You already have a database filled with information about their needs.

  • You know the current make and model of their car.
  • You know how many miles they drive.
  • You know their service history.

With these data points in mind, you can do much more than show them the new version of their car. You can offer suggestions on other makes, products, or financing options that might fit their needs better. When they come in, how prepared is your sales staff to meet their needs and exceed their expectations?

What about those products?

As with every customer in your dealership, returning lessees want the most for their money. After all, that’s the whole reason they chose to lease in the first place. Now is the perfect time to re-evaluate your F&I products and your provider. So, talk to your service advisers. They can tell you how quickly claims are processed, whether your admin is professional and courteous, and how many claims are approved. Those F&I products not only reflect back on you. Outside of the upsell opportunity, they can also help or harm your service drive, depending on how much red tape your service advisors deal with on a daily basis.

EFG Companies knows the importance of customer service combined with superior products. Everything from training to product administration has a single goal in mind – to be your partner for go-to-market success. Our agile product innovation and customization is backed by unmatched partner engagement and industry leading claims administration.

Make EFG your key to driving business. Contact us today.

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Dealership Training EFG Companies F&I

CFPB Crackdown – What You Need to be Compliant

Contributing Author: John StephensIn December 2013, the Consumer Protection Financial Bureau’s first blow to the automotive financing industry hit – and it hit hard. After an in-depth investigation, the CFPB ordered Ally Financial to pay $80 million in consumer restitution and another $18 million in civil penalties for having practices that made discrimination possible in their partner dealerships.

According to some consumer advocates, those dealership partners could now be sued by the same consumer’s receiving a refund check from Ally Financial. Why? Consider this situation.

Sally checks the mail one day and receives a letter stating that the lender backing her auto loan was forced to reimburse her and others who were discriminated against when purchasing their vehicle. She now has proof that the dealership where she purchased her vehicle employed discriminatory practices against her. With hard proof in the form of a check from Ally Financial, she contacts a lawyer and puts together a class action with all the other consumers the dealership allegedly discriminated against.

Now, another blow is about to hit. A consumer advocacy group in California is trying to place a proposal on the state’s November 2014 ballot that would prohibit dealerships from marking up interest rates on their auto loans. If this bill passes, it could provide the tipping point for lenders to change their policies and disallow dealerships from increasing their interest rates.

With the industry avidly watching to see how this will play out, now is the time to ensure the highest standard of compliance practices in your dealership. So ask yourself:

Do you have a compliance officer at your dealership? A compliance officer takes ownership of dealership compliance. They are responsible for the compliance strategy or business plan, determining holes, and the best and most efficient way to plug those holes.

How often do you provide compliance training? Automotive retail has always been a high turnover industry. Compliance training needs to be at the forefront as you add new employees, promote, and add new rooftops, etc. If your people don’t know the ever-fluctuating rules, how can they ensure they are abiding by them?

Do you perform regular compliance audits? By performing regular audits, you can be on top off inconsistencies within your dealership and address them before they get out of hand.

With this highly regulated industry, compliance is nothing new. However, the vague guidelines from the CFPB leave a lot to be desired in forming hard- and-fast rules. The best thing to do is consult with your legal counsel to ensure that your compliance strategy incorporates practices relative to the CFPB and general discriminatory laws. Some examples of these practices include:

  • Establish a published internal and external audit process that includes specific guidelines on the consequences of compliance violation.
  • Publish a schedule of training for both new and veteran employees to ensure all personnel are aware of the established guidelines.
  • Provide evidence of proper consumer disclosure.
  • Establish a “code of ethics” reviewing the policies and procedures signed off by all employees and new hires.

In addition, it is equally important to conduct thorough due diligence that all service providers, not just lenders, understand and are capable of complying with all state and federal laws by:

  • requesting and reviewing the service provider’s policies, procedures, internal controls, and training materials to ensure that the service provider conducts appropriate training and oversight of employees or agents who have consumer contact or compliance responsibilities;
  • ensuring the contract with the service provider includes clear expectations about compliance, as well as appropriate and enforceable consequences for violating any compliance-related responsibilities;
  • establishing internal controls and on-going monitoring to determine whether the service provider is in compliance; and,
  • taking prompt action to address any problems identified through the monitoring process.

With over 36 years in innovating and implementing proven go-to-market strategies in the dealership space, EFG Companies has made compliance a core facet of their business, influencing everything from product development to claims and client support.

Find out how compliance training from EFG can fortify your business to thrive while remaining compliant with current and future regulations.

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EFG Companies

Product Administration can Make or Break Your Repeat Business

Contributing Author: Barry CarterCongratulations! Your VSC penetration is up and so is your F&I income. Your F&I department is rocking on upselling consumer protection products with your vehicles. You can’t believe the success you are having with sales and F&I. Your customers are happy all the way until they leave the dealership and drive home. But guess what, their experience with you hasn’t ended.

Because your customers choose your F&I products, their experience with those products will reflect back on you. You can have the greatest closing numbers in the world, but if your F&I products don’t reflect the service you provide in the dealership, your customers will most likely not return for their next purchase.

Good experience with an F&I product goes beyond claims paid to the customer service provided to both your customers and your service center. Think on your own experience with call centers. The ones you hate are the ones that keep you on hold too long, don’t address your questions, or keep transferring you between departments. Good customer service includes answering phone calls immediately, listening to customer concerns, and answering all questions politely. This experience is often even more important than monetary matters. When looking at your product administrator, look beyond the number of claims paid and average amount paid to the customer experience. Ask yourself:

  • How quickly are calls answered?
    • Anything over 60 seconds is unacceptable.
  • What is the average call time?
    • There is an art to a good service call. It shouldn’t end too quickly, leaving the caller more confused, and it shouldn’t linger. Good adjusters or customer service representatives move the conversation along efficiently and end the call between 3 minutes and 5 and a half minutes.
  • How often are calls abandoned?
    • If more than 5% of callers hang up, there’s a problem.
  • What is the average availability of a service representative or a claims adjuster?
    • This affects everything else. Without at least 75% availability, calls will not be answered promptly, therefore more will be abandoned.
  • Is it easy for my customers to get answers to frequently asked questions, such as policy coverage or claim status?
    • These should be available in a number of places, such as online, within the administrators automated phone system, and in print form.

It’s pretty easy to tell whether your customers are having a good experience with your F&I products by just walking into your service center. If your team members are complaining about never getting through to the administrator to initiate a claim, get a status, or get payment, it’s likely that your customer is having the same poor experience. One conversation you never want to hear is:

Service Advisor: “We couldn’t process your claim with your product administrator.”

Your Customer: “I bought the car through you, what do you mean you can’t process my claim?”

Service Advisor: “It’s not us, it’s the product administrator.”

Your Customer: “I can’t believe this service! I’m never bringing my car here again and you can be sure I won’t buy from you again either!”

The best way to avoid the scenario above is to ensure a good customer experience from the day they purchase their car. With over 36 years in innovating and administering consumer protection products, EFG knows the importance of customer service and that our efforts reflect back on our clients. That’s why we perform monthly audits based on daily results to ensure that your customers and service advisors always have the best experience. We continuously strive to keep abandon rates below 5 percent, answer every call within 60 seconds and to provide answers or process a claim as quickly and efficiently as possible.

At EFG, your reputation is our business. Contact us today to find out more about our commitment to your success through product administration.