-
Creditor Insurances- Dealer Plan Financing
- Extended Warranties
- Non-Prime Financing
- Vehicle Protection Products
- Floor Plan Financing
- Road Hazard Warranties
- DMS Providers
- GAP Programs
- F & I Software
- Theft Deterrent Systems
- Menu Software
- Roadside Assistance Program
- Internet Solution Providers
- Nitrogen Programs
- Tracking Systems
- Accessories
- Presentation Videos & Tools
- Vehicle Insurance Carriers
-
Manufacturer Warranty
Refund Programs 
Improve F&I profits:
Use the following checklist as a tool to identify areas of opportunity. Rate yourself on a scale of 1 to 10:
(1 being poor and 10 being excellent).
The following will provide you with a guide as to what areas of the Business Office might require improvement:
Your Mind Set:
A. There is no doubt that it is far more difficult to sell a product or service that you don’t believe in. Symptoms that might indicate that you don’t have enough belief in the products you offer are:
no warranty on your personal vehicle
This situation could simply be a result of vicarious learning without any formal training. If you suspect that you could have a lack of belief affecting performance, you can quickly identify this with a complimentary telephone consultation with F-I Resource.
B. Prejudging customers wants, needs or desires also effects a Business Manager’s mind set resulting in poor performance. This occurs as a result of several situations:
1. the salesperson contaminates you by creating fear of losing the deal if you to sell them too much
2. you see that the customer is leasing the vehicle or the salesperson tells you that the customer won’t be keeping their vehicle for very long so you assume that the customer would have no interest in an extended warranty or vehicle protection products
3. you review the credit application and/or the credit report and feel empathy for the customer so you neglect to present all of the Business Office products that the dealership has to offer
4. your presentation is too long and you feel pressure from salespeople and sales managers to hurry up your turnovers resulting in ineffective product presentations
5. “These people never buy anything” is a comment heard as a result of stereotyping customers. A few unproductive turn-overs with a few customers that share a common demographic can taint your mind set.
6. A sales slump in the Business Office perpetuates the slump. You unfortunately believe that your next customer will not buy anything because the last several didn’t either creates a fear of failure or rejection that inhibits all of the products being offered with enthusiasm, conviction and assertiveness.
Finally, are you following the Business Manager’s Oath?
How many products should you sell?
Most Business Offices will sell three core products:
The reason for poor performance in the three core products is usually one or a combination of these causes:
The mind set of the Business Manager
i) A lack of product knowledge
ii) A poor presentation
iii) Unable to overcome common objections
iv) Closing with a ‘Yes” or “No” strategy as opposed to closing with options
vi) A low level of assertion and conviction
vii) A low level of enthusiasm
viii) Not presenting all of the products offered at the dealership
ix) Pressuring a customer to buy
x) Too short or too long of a presentation
The two most common sales processes of a Business Manager are:
If you have too many products to offer and you are step selling, the turn-over will likely be too long, confrontational and not very customer friendly. Most Business Managers will subsequently use a Menu strategy to shorten turn-overs when there are a myriad of products to offer.
A Business Office should add product offerings only after an acceptable level of performance is achieved in the three core product offerings. If this is not the case, training would be a wise investment.
Presentations:
A powerful product presentation consists of four objectives:
If your presentations do not satisfy these objectives, they need to be re-vamped. Most Business Managers do not have their presentations documented which might indicate that there is a fair share of ad libbing going on throughout the presentation. This signals that there could be a lack of consistency in the presentations and not every customer is being provided with the same quality presentation giving them every opportunity to buy the dealership’s Business Office products.
Poor product knowledge or a lack of facts, features and benefits in your presentations also could inhibit productivity. Telling a customer about a warranty, feature or benefit without SHOWING the customer does not improve performance.
Presentations or turn-overs that are too long also are not customer friendly or friendly to the sales staff and sales managers. Too short a turn-over indicates that the Business Manager is rushing through his/her presentations without stimulating a need and creating better value in the products that are offered. There is a balance that must be perfected so time your turn-overs to better gauge what improvements should be considered.
Many Business Managers have winged it from the get-go without any formal training so remember this definition of insanity if you want to improve your results.
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(1 being poor and 10 being excellent).
- My Attitude
- My Product Knowledge
- My Product Presentations
- My Sales Process
- Overcoming Objections
- My Closing Skills
- My Mood at Time of Turn-Over
- Number of Products Offered
- Educating the Dealership Staff
- Statistical Analysis
- External Factors
- Proper Staffing
The following will provide you with a guide as to what areas of the Business Office might require improvement:
Your Mind Set:
A. There is no doubt that it is far more difficult to sell a product or service that you don’t believe in. Symptoms that might indicate that you don’t have enough belief in the products you offer are:
no warranty on your personal vehicle
- no vehicle protection applications such as rust proofing/inhibitor, paint sealant or interior protection on your personal vehicle
- no loan protection on your finance or lease agreement for your personal vehicle
This situation could simply be a result of vicarious learning without any formal training. If you suspect that you could have a lack of belief affecting performance, you can quickly identify this with a complimentary telephone consultation with F-I Resource.
B. Prejudging customers wants, needs or desires also effects a Business Manager’s mind set resulting in poor performance. This occurs as a result of several situations:
1. the salesperson contaminates you by creating fear of losing the deal if you to sell them too much
2. you see that the customer is leasing the vehicle or the salesperson tells you that the customer won’t be keeping their vehicle for very long so you assume that the customer would have no interest in an extended warranty or vehicle protection products
3. you review the credit application and/or the credit report and feel empathy for the customer so you neglect to present all of the Business Office products that the dealership has to offer
4. your presentation is too long and you feel pressure from salespeople and sales managers to hurry up your turnovers resulting in ineffective product presentations
5. “These people never buy anything” is a comment heard as a result of stereotyping customers. A few unproductive turn-overs with a few customers that share a common demographic can taint your mind set.
6. A sales slump in the Business Office perpetuates the slump. You unfortunately believe that your next customer will not buy anything because the last several didn’t either creates a fear of failure or rejection that inhibits all of the products being offered with enthusiasm, conviction and assertiveness.
Finally, are you following the Business Manager’s Oath?
How many products should you sell?
Most Business Offices will sell three core products:
- Creditor insurances
- Extended warranties
- Vehicle protection
The reason for poor performance in the three core products is usually one or a combination of these causes:
The mind set of the Business Manager
i) A lack of product knowledge
ii) A poor presentation
iii) Unable to overcome common objections
iv) Closing with a ‘Yes” or “No” strategy as opposed to closing with options
vi) A low level of assertion and conviction
vii) A low level of enthusiasm
viii) Not presenting all of the products offered at the dealership
ix) Pressuring a customer to buy
x) Too short or too long of a presentation
The two most common sales processes of a Business Manager are:
- Step Selling and
- Menu selling
If you have too many products to offer and you are step selling, the turn-over will likely be too long, confrontational and not very customer friendly. Most Business Managers will subsequently use a Menu strategy to shorten turn-overs when there are a myriad of products to offer.
A Business Office should add product offerings only after an acceptable level of performance is achieved in the three core product offerings. If this is not the case, training would be a wise investment.
Presentations:
A powerful product presentation consists of four objectives:
- Create a need and curiosity for a product by informing the customer what coverage they have on their vehicle and the limitations of the coverage
- Provide a solution: tell them what you have to offer
- Tell and show the customer the features and benefits of the product
- Close with options
If your presentations do not satisfy these objectives, they need to be re-vamped. Most Business Managers do not have their presentations documented which might indicate that there is a fair share of ad libbing going on throughout the presentation. This signals that there could be a lack of consistency in the presentations and not every customer is being provided with the same quality presentation giving them every opportunity to buy the dealership’s Business Office products.
Poor product knowledge or a lack of facts, features and benefits in your presentations also could inhibit productivity. Telling a customer about a warranty, feature or benefit without SHOWING the customer does not improve performance.
Presentations or turn-overs that are too long also are not customer friendly or friendly to the sales staff and sales managers. Too short a turn-over indicates that the Business Manager is rushing through his/her presentations without stimulating a need and creating better value in the products that are offered. There is a balance that must be perfected so time your turn-overs to better gauge what improvements should be considered.
Many Business Managers have winged it from the get-go without any formal training so remember this definition of insanity if you want to improve your results.
“Doing the same things over and over again
yet expecting different results.”
yet expecting different results.”
Sales Process:
There are several sales processes that Business Managers use today:
A, Step Selling
B. Menu Selling
C. Staggered Selling
D. Sandwiched Selling
E. Load, Lock & Fire ( Shock & Relief)
All of these sales processes can produce excellent results and whichever process you elect to use will simply be a matter of personal preference. A Business Manager might elect to use a Menu or a Load, Lock & Fire sales procedure if there is a myriad of products offered. Some Business Managers will use a combination of strategies. For example, you could step sell creditor insurances and then menu vehicle protection products and an extended warranty.
A trending strategy is to stagger the turn-over. This is an ideal method for busy sale days or when multiple sales have occurred at once. The Business Manager sees the customer at the time of salebut only sells the tangible products that need to be placed on a get-ready work order. Warranty and creditor insurances are sold at the time of delivery. This does require two turn-overs but many dealerships have moved to having their customers complete the documentation at delivery with the Business Manager first to ensure accurate paperwork.
You should consider which sales process will work best for the culture of your dealership and also consider experimenting month to month to determine which one will work best for you.
Product Knowledge:
As indicated earlier, a lack of product knowledge is usually at the root of a lack of performance. Not fully explaining and showing a customer the limitations of the manufacturer’s mechanical, cosmetic, corrosion and tire warranties is a recipe for poor performance. If your customer is not enlightened during the presentation, there’s a good chance that you are not creating enough of a need and value in the products that you offer. Consider a complementary telephone consultation with F-I Resource to determine the need to acquire further product knowledge.
Closing:
If you are closing with a “Yes” or “No” strategy, change it immediately. Close with options and allow a customer a way to find a solution that will best suit their needs and financial budget. The classic taboo close that is heard in Business Offices to this day is “So, do you think you’d be interested in something like that?”
Overcoming Objections:
An objection is a statement or a situation that prevents us from moving forward to close a sale. A rebuttal is an attempt to change the customer’s perspective using logic, analogies and sometimes humour. They can be very clever or funny as long as they get the customer to do what you want them to do. Being prepared with an arsenal of rebuttals is a Business Manager’s responsibility.
Some of the most common objections that are heard in Business Offices today are:
“I’ve got plenty of life insurance.”
“I’m covered for that at work.”
“I won’t be keeping the vehicle that long.”
“I’m leasing it. I don’t need any of that stuff.”
“The vehicle already has a corrosion warranty.”
“The vehicle has a 5 year mechanical warranty.”
“It costs too much.”
“I’ll take my chances.”
“I’ll think about it and get back to you.”
These are just a sample and there are many more. If you are not competent at overcoming these most common objections, you will never reach your potential. Again, further training would be a prudent investment.
Is a Turn-Over at your Dealership a Celebration?
Have you ever personally purchased or leased a newer vehicle? It’s pretty exciting and it makes you feel special doesn’t it? You must take advantage of the emotional feelings that a customer experiences when purchasing or leasing a vehicle. Some ingredients in making a turn-over a celebration are:
+ COMPLIMENTING THE CUSTOMER’S CHOICE.
+ REASSURING THEIR DECISION.
+ GAINING THEIR TRUST BY INFORMING THEM WHAT IS GOING TO TRANSPIRE.
+ FUELING THEIR EMOTIONS.
+ RELAXING THE CUSTOMER AND OFFERING HOSPITALITY.
+ BUILDING RAPPORT: DURING MEETING AND GREETING AND DURING THE CREDIT APPLICATION, ASK QUESTIONS
ABOUT THE CUSTOMER’S PERSONAL LIFE, WORK AND INTERESTS
These are selling skills that some Business Managers naturally have. If they don’t, they can be learned through more training. People buy from people they like and Business Managers need to learn to be more likeable.
Do your Salespeople, Sales Managers, Service Advisors and the Service Manager Believe?
It’s difficult to sell or endorse a product or service that you don’t believe in. Even if you bonus or spiff your people on the sale of F&I products, many will not endorse them for their ethical reasons. This is a quick fix for most dealerships by having as little as a half day training session on the importance and value of Business Office products. You can do it yourself or hire a trainer to get it done for you. Why keep trying to push water uphill? If your team believes in what is sold in the Business Office, they will endorse your products.
Statistical Analysis:
If you are not recording the penetration levels and gross profit per transaction, it’s unlikely that you will be motivated to improve. Dealerships, performance groups and some manufacturers measure Business Office performance and compare results to similar size stores or brands. It’s one of the quickest ways to determine what product lines need improvement. Once identified, develop an action plan that will allow improvement in that area. You can consult your suppliers or F&I Trainers/Consultants to assist you in your quest. You cannot manage what you cannot measure.
Manufacturer Incentives, Cash Deals, Lines of Credit, Leasing and Extended Manufacturer Warranties:
This is a trend in the marketplace for dealers and Business Managers alike to rationalize and accept poor performance in the Business Office because of external factors allegedly beyond their control.
There are import Business Managers that generate over $1500 per unit and there are others who work for those brands that generate less than $500 per unit sold even though their manufacturers offers 4 or 5 year comprehensive warranties.
There are luxury brand Business Managers who work in dealerships where leasing penetration levels are at 70% or more who generate less than $500 per unit to those that generate well over $1000 per unit sold.
There are dealerships where either cash incentives from the manufacturer are strong or the demographics of their dealership draws many customers who pay for their vehicles with cash or use their lines of credit.
These are common objections that can prevent you from selling more products and as such, if there is any trending common objection preventing you to generate more income, you need to develop or acquire the necessary rebuttals or sales strategies to overcome them. There is no question that training is the prescription rather than accepting mediocrity.
Proper Staffing:
A single Business Manager can normally handle 50 to 70 turnovers per month with profitability and customer satisfaction. Beyond that, financial performance will most often decline. Ensure that you have the proper staffing according to your annual sales volume.
Some dealerships who do not quite have the volume to justify a second Business Manager will hire an administrator to assist the Business Manager. When a dealership turns a salesperson into a part-time Business Manager, they usually lose the individual to another dealership as they wish to pursue a full time career. Be careful who you hire—you could lose a top salesperson and your administrative assistant.
Furthermore, it is absolutely imperative that if there is more than one Business Manager in the dealership, they all be on duty during peak sales periods such as Saturdays. It is extremely frustrating for salespeople, sales managers and customers alike when there are long waiting times for a single Business Manager on a busy selling day.
Having a lack of coverage promotes haste and waste. It is not uncommon to see a single Business Manager make a pretty decent living from a high volume of sales yet producing poor gross dollars per unit sold.
There are several sales processes that Business Managers use today:
A, Step Selling
B. Menu Selling
C. Staggered Selling
D. Sandwiched Selling
E. Load, Lock & Fire ( Shock & Relief)
All of these sales processes can produce excellent results and whichever process you elect to use will simply be a matter of personal preference. A Business Manager might elect to use a Menu or a Load, Lock & Fire sales procedure if there is a myriad of products offered. Some Business Managers will use a combination of strategies. For example, you could step sell creditor insurances and then menu vehicle protection products and an extended warranty.
A trending strategy is to stagger the turn-over. This is an ideal method for busy sale days or when multiple sales have occurred at once. The Business Manager sees the customer at the time of salebut only sells the tangible products that need to be placed on a get-ready work order. Warranty and creditor insurances are sold at the time of delivery. This does require two turn-overs but many dealerships have moved to having their customers complete the documentation at delivery with the Business Manager first to ensure accurate paperwork.
You should consider which sales process will work best for the culture of your dealership and also consider experimenting month to month to determine which one will work best for you.
Product Knowledge:
As indicated earlier, a lack of product knowledge is usually at the root of a lack of performance. Not fully explaining and showing a customer the limitations of the manufacturer’s mechanical, cosmetic, corrosion and tire warranties is a recipe for poor performance. If your customer is not enlightened during the presentation, there’s a good chance that you are not creating enough of a need and value in the products that you offer. Consider a complementary telephone consultation with F-I Resource to determine the need to acquire further product knowledge.
Closing:
If you are closing with a “Yes” or “No” strategy, change it immediately. Close with options and allow a customer a way to find a solution that will best suit their needs and financial budget. The classic taboo close that is heard in Business Offices to this day is “So, do you think you’d be interested in something like that?”
Overcoming Objections:
An objection is a statement or a situation that prevents us from moving forward to close a sale. A rebuttal is an attempt to change the customer’s perspective using logic, analogies and sometimes humour. They can be very clever or funny as long as they get the customer to do what you want them to do. Being prepared with an arsenal of rebuttals is a Business Manager’s responsibility.
Some of the most common objections that are heard in Business Offices today are:
“I’ve got plenty of life insurance.”
“I’m covered for that at work.”
“I won’t be keeping the vehicle that long.”
“I’m leasing it. I don’t need any of that stuff.”
“The vehicle already has a corrosion warranty.”
“The vehicle has a 5 year mechanical warranty.”
“It costs too much.”
“I’ll take my chances.”
“I’ll think about it and get back to you.”
These are just a sample and there are many more. If you are not competent at overcoming these most common objections, you will never reach your potential. Again, further training would be a prudent investment.
Is a Turn-Over at your Dealership a Celebration?
Have you ever personally purchased or leased a newer vehicle? It’s pretty exciting and it makes you feel special doesn’t it? You must take advantage of the emotional feelings that a customer experiences when purchasing or leasing a vehicle. Some ingredients in making a turn-over a celebration are:
+ COMPLIMENTING THE CUSTOMER’S CHOICE.
+ REASSURING THEIR DECISION.
+ GAINING THEIR TRUST BY INFORMING THEM WHAT IS GOING TO TRANSPIRE.
+ FUELING THEIR EMOTIONS.
+ RELAXING THE CUSTOMER AND OFFERING HOSPITALITY.
+ BUILDING RAPPORT: DURING MEETING AND GREETING AND DURING THE CREDIT APPLICATION, ASK QUESTIONS
ABOUT THE CUSTOMER’S PERSONAL LIFE, WORK AND INTERESTS
These are selling skills that some Business Managers naturally have. If they don’t, they can be learned through more training. People buy from people they like and Business Managers need to learn to be more likeable.
Do your Salespeople, Sales Managers, Service Advisors and the Service Manager Believe?
It’s difficult to sell or endorse a product or service that you don’t believe in. Even if you bonus or spiff your people on the sale of F&I products, many will not endorse them for their ethical reasons. This is a quick fix for most dealerships by having as little as a half day training session on the importance and value of Business Office products. You can do it yourself or hire a trainer to get it done for you. Why keep trying to push water uphill? If your team believes in what is sold in the Business Office, they will endorse your products.
Statistical Analysis:
If you are not recording the penetration levels and gross profit per transaction, it’s unlikely that you will be motivated to improve. Dealerships, performance groups and some manufacturers measure Business Office performance and compare results to similar size stores or brands. It’s one of the quickest ways to determine what product lines need improvement. Once identified, develop an action plan that will allow improvement in that area. You can consult your suppliers or F&I Trainers/Consultants to assist you in your quest. You cannot manage what you cannot measure.
Manufacturer Incentives, Cash Deals, Lines of Credit, Leasing and Extended Manufacturer Warranties:
This is a trend in the marketplace for dealers and Business Managers alike to rationalize and accept poor performance in the Business Office because of external factors allegedly beyond their control.
There are import Business Managers that generate over $1500 per unit and there are others who work for those brands that generate less than $500 per unit sold even though their manufacturers offers 4 or 5 year comprehensive warranties.
There are luxury brand Business Managers who work in dealerships where leasing penetration levels are at 70% or more who generate less than $500 per unit to those that generate well over $1000 per unit sold.
There are dealerships where either cash incentives from the manufacturer are strong or the demographics of their dealership draws many customers who pay for their vehicles with cash or use their lines of credit.
These are common objections that can prevent you from selling more products and as such, if there is any trending common objection preventing you to generate more income, you need to develop or acquire the necessary rebuttals or sales strategies to overcome them. There is no question that training is the prescription rather than accepting mediocrity.
Proper Staffing:
A single Business Manager can normally handle 50 to 70 turnovers per month with profitability and customer satisfaction. Beyond that, financial performance will most often decline. Ensure that you have the proper staffing according to your annual sales volume.
Some dealerships who do not quite have the volume to justify a second Business Manager will hire an administrator to assist the Business Manager. When a dealership turns a salesperson into a part-time Business Manager, they usually lose the individual to another dealership as they wish to pursue a full time career. Be careful who you hire—you could lose a top salesperson and your administrative assistant.
Furthermore, it is absolutely imperative that if there is more than one Business Manager in the dealership, they all be on duty during peak sales periods such as Saturdays. It is extremely frustrating for salespeople, sales managers and customers alike when there are long waiting times for a single Business Manager on a busy selling day.
Having a lack of coverage promotes haste and waste. It is not uncommon to see a single Business Manager make a pretty decent living from a high volume of sales yet producing poor gross dollars per unit sold.
For further assistance or consultation, please contact:
info@f-iresource.com
