Ask These 9 Questions to Find Out
Increasingly, car dealer F&I departments are taking center stage in dealerships. And rightfully so, as they represent a significant source of dealer income. According to the National Automobile Dealers Association (NADA), nearly 37 percent of a dealership’s gross profit comes from the sale of F&I products and service contracts on new and used cars.
And the F&I solutions market opportunity is growing at a CAGR of nearly 9%, according to Pragma Market Research’s North America Automotive F&I Solution Market Report. Pragma also estimates the market was worth $647 million in 2022 and predicts it will reach $1,068 million by 2028.
NADA also reports that roughly 90% of new- and 73% of used-car purchasers relied on some sort of financing, purchased an after-sale product, or both.
Given their potential contribution to the bottom line and the valuable role they play in the dealership, F&I teams are under tremendous pressure to perform. A go-between with customers, dealerships, and lenders, they must stay motivated and vigilant. They’re on the customer front lines, expected to deliver an optimal experience as they help buyers make informed decisions, and to drive sales, all while keeping pace with the latest technology and increasingly complex regulatory compliance requirements.
Balancing all these factors is a craft, yet the pitfalls that plague performance potential abound. How can you optimize your F&I team and empower them not just to perform but to become elite?
How to Be Successful in F&I
Before you can envision success for your F&I team, you need to assess its health. Start by asking these questions:
- Do you have the right people with the right skills (or the capacity to develop them) in F&I seats?
- Do you have a compensation plan that motivates them to achieve high results without taking shortcuts?
- Do you have the internal capability or access to a partner that can assess gaps in process and performance?
- Do you set both realistic and stretch goals? Does your team achieve those regularly?
- Do they consistently get positive customer feedback?
- Are you executing the right processes, not just to attain high revenue and product sales, but to communicate, to identify problems before they get out of control, and to foster positive working relationships across departments?
- Are you able to develop methods of motivation that go beyond compensation, such as training, competition, and contests?
- Have you invested in technology that enhances your process, or are you burdening some of your best salespeople with administrative duties?
- Do you have the capability of providing F&I services in store or remotely? Are you able to meet the customer where they are?
Optimize Your F&I Team’s Performance with a Partner
Given the daily demands on your F&I team, it can seem impossible to stop the pace of business and be intentional about ensuring the health of your F&I department. This is where a partner can provide relief. A partner brings a consistent focus on optimizing your F&I team so you can prioritize running your dealership.
Our automotive practice creates a bridge in the F&I office between manufacturers and dealers, creating a win-win for both parties. The manufacturers are our clients, but the dealerships are our customers. When a dealer’s F&I team is successful, they sell more products for the manufacturer and drive more profitability for the dealership.
Just as golf caddies are core to their pros’ success, we come alongside F&I pros to optimize their performance. Caddies are in tune with their pros’ tendencies, strengths, and weaknesses and can identify opportunities and potential pitfalls. They act as a second brain, able to see things in a way pros can’t, allowing the pro to focus on execution.
Our team, all of whom have dealership experience, sit with F&I team members, observe their daily sales motions, assess their skills, pinpoint areas of opportunity for growth and/or refinement. They then determine and deliver the level of support they need most, working with them to evolve their skills, convert customers, drive revenue for their dealership, and increase their earnings.
And just as caddies have an instinctive relationship with their pros and the terrain of the courses they play, we know every inch of a dealership. This allows us to equip taxed F&I pros with the right tools to maximize both personal and dealership growth.
We do this by identifying their strengths and weaknesses and surfacing opportunities for skill, process, and performance improvement. Sometimes, that involves helping them remember things that made them successful in the past that perhaps they’ve gotten away from. Either way, we help them adjust their game to achieve a better score at the end of the round.
We observe and assess F&I pros’ capabilities and areas for growth. We then tailor a plan to help them achieve that growth. We help them hone their skills, learn new ones, coach them on customer experience and selling techniques, and offer mentorship and support.
The Benefits of F&I Auto Partners
As most golfers know, throughout any round, course management is more important than any single shot, and not every swing has to go for the green. Caddies help pros keep the total game in mind on every hole. In the F&I office, while products are important, an understanding of people is critical. F&I pros must be able to gauge customers’ motivations and guide conversations according to a wide range of buying behaviors to create the most fertile buying environment.
“The more your F&I team understands the products they sell and what their purpose is, the more they believe in what they’re selling. This in turn allows them to portray confidence and establish a comfort level with customers.”- Automate
We strive to be trusted partners to our dealers, helping them remove obstacles that prevent them from achieving their vision or their goals. We’re able to implement process improvements that empower dealers to get the most leverage and benefit from the manufacturer’s superior products, and we provide the reporting and data that lets them view performance and process in real-time.
The Benefits of Partnering:
|To Manufacturers: We help them compete with independent F&I products that may have a perceived price advantage but do not enjoy the strength of the manufacturer’s brand and relationships within the dealerships.||To Dealers: We provide 360° support to their F&I team on the products they sell, so they can confidently offer customers a superior product, optimize customer engagement, and generate higher revenue for the dealership.|
Oftentimes, either the manufacturer or dealer asks for more F&I training, but often, what F&I staff needs most is more nuanced support in the form of sales coaching, customized to their level of knowledge, skills, and potential, as well as reinforcement, encouragement, and mentorship.
We also connect F&I staff to the ongoing resources they need to stay in peak condition. For example, we liaise with the manufacturer and software vendors to troubleshoot for F&I staff. And to help dealers embody a culture of compliance, we’re building an F&I compliance training curriculum. To ensure F&I support flows from leadership, we also work to foster a dealership-wide commitment to changing behavior aligning around removing roadblocks to achieving its goals.
Optimize Your F&I Auto Team
Each program we establish is distinct and unique, customized for each manufacturer. That said, we follow some basic principles that exist between the manufacturer and the dealer to help both achieve the results they want. In the manufacturer’s case, it’s the customer purchasing their warranty products over an independent offering. For the dealer, it’s ensuring the F&I department contributes as much as possible to the dealership’s bottom line.
Our people are seasoned professionals who excelled in their careers in dealership sales and management roles, including F&I, before coming to MarketSource. That experience counts. So does their ability to see what is working and not working in thousands of dealerships across the country every week and to help their dealers strengthen or restore health to their F&I departments. And we’re able to bring to bear the wisdom we have from working with our clients in other verticals.
We stand ready to adapt to fluctuating market conditions, evolving customer buying habits, and a complex regulatory environment. The only way to stay ahead of those inevitable changes and ensure that we consistently innovate for our customers is to constantly pursue incremental F&I process improvement. We share best practices with our clients to ensure their realized improvements endure. And we belong to professional groups and talk with consultants to ensure we’re up to speed on the latest changes to regulatory requirements. We do all this because we’re in it for the long game…
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We help optimize dealers’ F&I staff to provide products and experiences that drive results and satisfaction for EVERYONE.