“Maximizing the back end” has been a mantra for dealers over the last several years. Using menu selling strategies takes dealers part of the way to the profits they need. Electronically connecting dealers to aftermarket providers – just as dealers already are connected to financing sources – is the next step in revolutionizing the F&I process.
Streamlining the End of the Back End
Increasingly important to dealerships are the back end profits from the sale of aftermarket products such as vehicle service contracts, GAP, security systems, paint and fabric sealants, and other aftermarket coverage products. However, until now, the more aftermarket products dealers sold the more potential grief a dealership had to deal with on the “back end” of the aftermarket product sales process.
Based on conversations with dealers and aftermarket providers, about 30 percent of aftermarket vehicle service contracts require some type of manual follow-up to correct errors. The most frequent problems include:
If this isn’t aggravating enough, the sheer volume of paperwork itself can be an obstacle to getting things right the first time and moving on to the next deal.
While the errors may seem relatively small, the consequences can be significant. Dealers who undercharge customers for aftermarket products are on the hook for the difference. Adding to the difficulty is the lag time between selling to customers and finalizing the contract, which can stretch to 45 days or more. Too many dealers have experienced the drop in customer satisfaction that occurs when customers drive off the lot after purchasing aftermarket products – such as wheel protection or a service contract – then return a few days later with a problem covered by the contract, only to learn the contract has not been processed.
Innovative dealers have been looking for a way to make aftermarket sales and contracting intelligent, fast, accurate and secure – a network through which dealers can electronically connect to their preferred aftermarket providers, similar to the network they already use to connect to their preferred financing sources.
Features of this aftermarket network include:
The key is making the process fit seamlessly with both the current dealership workflow and F&I systems.
Higher Profits, Lower Risk and Greater Visibility
Automating the aftermarket contracting process promises tangible benefits for dealers. Electronic rating of insurance and other products will drastically reduce errors by delivering accurate, real-time quotes from the service provider for all types of vehicles and products. Driving profitability and CSI, accurate numbers and verification of eligibility help to limit chargebacks and avoid re-contracting situations.
When dealers combine the aftermarket network with menu selling techniques, owners and general managers can get unprecedented visibility into sales performance, real-time reporting on aftermarket presentation performance, product penetration, gross-per-unit and profit.
Win–Win–Win for the Industry
What’s in it for aftermarket providers and agents? Fewer errors and electronic processing of contracts reduce administrative costs and allow easy remittance. Additionally, because dealers typically have excellent relationships with their providers and independent agents, the aftermarket network will ensure those relationships remain strong. Instead of rehashing the number of contracts sold, the amount owed or the accuracy of paperwork, dealers and providers will be able to collaborate on ways to sell more products and make more money.
Further, agents accustomed to helping out with paperwork after busy sales days will appreciate the extra time they have available to consult with dealership staff on ways to sell more products – and even achieve more bundle sales.
So it really is a win–win–win for the industry because of the tangible benefits for dealers, aftermarket providers, agents and, ultimately, customers.
What’s In It for You?
Higher profit – by increasing the speed, accuracy and efficiency of the aftermarket contract process and by avoiding contract errors that you normally would have to absorb.
Higher CSI – by tightening the aftermarket process so customers can move to the part of the sales experience they enjoy the most: taking delivery.
Greater insight into your cash-flow – by removing the complication and hassle out of the month-end remittance process.
Vol 3, Issue 11
Xtime announced the launch of three new features designed to maximize customer retention and dealer profits as well as the latest book from executive and service expert Jim Roche.