The automotive industry has gone through a major market transformation over the last two years that’s highlighted the importance of robust, compliant F&I departments and their managers. This year’s NADA Show was a great opportunity to observe how collaborative team work and constant refresher courses help your F&I support team to achieve more consistency and ultimately higher profitability for the dealership.
Auto dealerships of all brands and sizes tend to hold a few universal goals regarding F&I: selling more F&I products per deal and earning a higher return per vehicle sold. This is a very essential component of profitability for a dealership.
Five years ago, dealers reported most car shoppers purchasing F&I products such as tire and wheel protection (37.9%), exterior appearance products (37%), windshield repair (35.6%) and key fob replacement (34.8%).
Based on recent data that was revealed during the NADA Show recently, consumers today have prioritized ancillary packages in the following order: key fobs, tire & wheel replacement, windshield repair, exterior appearance protection, interior protection and theft deterrent.
Consumers (car buyers in particular) do more research online prior to walking into a dealership showroom than ever before. This has effectively changed the way car buyers’ preferences are shaped prior to purchasing a car.
Personalized product recommendations should be based on individual shopper needs. Shoppers learn about protection plans most suited to their lifestyle and driving habits while researching their model of preference. Dealerships can engage with their customers in a fun and exciting way to generate awareness and build trust. And by delivering specific product recommendations directly to your customers, you will be able to engage in more personalized conversations with prospective buyers.
This has significantly changed the F&I trend for dealerships. Previously, F&I managers educated and guided a customer through their preferences and choices. But now, customers walk in with preset expectations and preferences.
Educating buyers before visiting dealership showroom
They must use proactive platforms and online tools/networking to engage and discuss F&I products, and the first place to start, is the dealership website.
You can’t wait for a shopper to search for a dealership in your area, the current trends suggest that dealerships and their F&I teams must engage the audience where ever they can be found (e.g. social media discussing cars or looking at the latest models), and enticing them to visit the dealership website where the models are presented and F&I options are discussed (even if briefly).
78% of shoppers would be more interested in meeting with an F&I manager after learning about available products on a dealer’s website.
F&I products are critical to a dealer’s profitability, but the sales process often leaves car buyers confused and dissatisfied. Using the dealership website to discuss F&I options is a simple but effective approach to educating consumers before they ever arrive at your dealership.
Collaboration on F&I process
F&I focus meetings are much more constructive if they were held once a month, with dealership principals attending, discussing, and hopefully supporting the entire process as well as change implementation. The trends are changing rapidly, as oppose to traditional dealership operational management timeframes.
Rather than simply going over the numbers, managers need to discuss market changes, technology and tools, customer engagement prior to showroom visit, current performance obstacles, role play customer friendly techniques, and share best practices and discuss overall goals.
Monthly meetings are crucial for success. The more frequent these F&I meetings, the better and more effective will be the implementation. Collaboration between the dealerships’ teams, is essential in planning out and executing a successful F&I process.
Greater turnovers of F&I managers
Throughout last year, dealerships saw F&I employee turnover firsthand and about 72% of franchise dealers struggled to find and hire the right F&I employees in 2021. Unfortunately, this trend has been continuing in 2022 and many expect it to last will into 2023.
High turnover on the F&I team not only affects the dealership business processes but also result in lowering profitability.
Additionally, it also creates potential for liability.
When onboarding new F&I managers, relying on dealership training may lead to short coming with the quality of the professionals that are in charge of a very important aspect of a dealership’s business.
Many dealerships are now resorting to sending sales people to be training at a professional school for their F&I training in order to receive a thorough, and highly hands-on professional training.
In order to combat turnover and support your current team, offer continuing education programs.
Online training can serve as refresher training allowing F&I staff to easily complete modules, saving you the time and money and helping improve staff motivation.
The best way to prepare for changes in market trends is to be proactive.
Preparing, additional training, and supporting your F&I team to adapt to changes that can help drive revenue through 2022 and beyond will be the only logical approach to the long-term success of your dealership business.
If you are considering becoming an F&I Manager and work for a car dealership, Auto Dealer Institute can help. We provide Auto F&I Manager Training courses and we are the only licensed, independent F&I Training center in US with more than 32 years of experience. We help you with job placement as well as ensuring that our comprehensive sales training courses can provide you with what you need to learn to grow and adapt in a rapidly changing marketplace.
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