The Waiting Game In F&I: How Punte Hills Toyota Keeps The Customer Engaged

Initial classes last two days, but training continues whenever a new law arises. JM&A representatives visit the store to train at least twice per month. “Whether a manager is new or has been with us for 10 years, if a new compliance issue comes out, we train them all,” Hakes said.

However, most customers are not impressed with legal savvy. They simply want to buy a car and get on with their day. This leads the F&I team back to the first question: time. “Time is absolutely of essence to us,” said Hakes. “The whole process—car deal, finance, everything—should take about two-and-a-half hours. That’s the goal we shoot for.”

The irony is, most customers perceive finance to be the longest part of the process, stated Loren Coleman, finance director. “Most customers don’t mind the negotiation process when they’re buying a car,” he shared. “They’re completely involved and busy the entire time.” The problems start in one of two ways. Either the customer has a misconceived notion of how long the finance process is going to take, or the customer is left waiting because the finance managers are busy helping others.

The solution? Either get them into F&I as soon as possible, or keep them happily occupied. Puente Hills decided to do both.

Their first strategy is to merely be honest with the customer. Coleman said, instead of promising to get customers in and out in five minutes, they explain, “This is a process that’s going to take thirty-five to forty minutes because there is a lot of paperwork that has to be done, and it has to be done correctly.”.

If it’s a busy day, a finance manager will quickly touch base with the customer saying something like, ”You’re third in line. It’s going to be a bit of a wait, but we’ll get to you right away.” Hakes added, “As long as we tell them, they’re okay with it.”

Unfortunately, this doesn’t keep the customer from getting bored. Fortunately for Puente Hills, their facility has enough perks to vanquish boredom. For starters, they offer a restaurant serving breakfast, lunch and dinner. “If I have to, I have the ability to get the customer something to eat while they wait,” said Hakes. A spacious 50-seat theater plays G-rated movies from 9 a.m. until 7 p.m. (free popcorn included).  

Children can also enjoy a large enclosed playroom, with windows facing directly into five of the seven finance offices, giving parents an easy vantage point. “You can be sitting in F&I, listening to questions and still be able to watch them,” said Hakes.

Once the customer is ready to meet with finance, Puente Hills has one more tactic to ease the process: tackling the paperwork before it hits the F&I office.

The finance manager is first introduced to the customer on the sales floor. Next, the manager and customer sit down and proof the paperwork together—before even entering the office. Was the customer’s name spelled correctly? Is the address correct? The manager also reviews what the payments will be and other parameters of the contract. Finally, the manager asks a few quick questions: How long did you keep your last car? How many miles does it have? How often was it serviced?

All the while, the manager is mentally preparing a product menu to fit the customer’s needs. Next, Coleman said the manager returns to his office, sets the menu up “by virtue of what answers came about during the interview”, and brings the customer in.

Hakes and Coleman believe this interview process is what sets them apart from others. “Half the time, the finance office is known as the worst place to go,” shared Coleman. “The customer is thinking, ‘They’re going to change everything,’ ‘They’re going to raise my payment,’ or, ‘They’re going to try to sell me the world.’”

With the “pre-interview” step, the customer already met the F&I manager. “There’s no intimidation,” Hakes said.

Coleman added, “The F&I manager is no longer ‘that business guy.’ Instead he’s the person that sat down with the customer, where they agreed to buy the car, and let them know what was going to happen. The customer wasn’t waiting with the wrong type of anticipation to go into finance. They have a little bit of a comfort level, and that helps quite a bit.”

Just before the menu presentation, however, managers make one additional safety measure. “We’ve taken the initiative of fingerprinting our customers at all five Hitchcock Automotive stores,” said Hakes. “We’re one of the first.” The managers claim it is a necessary precaution against identity theft. “We don’t want to put anyone in jeopardy,” said Hakes, “by putting a car loan on their credit without them knowing.”

Hakes was not exaggerating. Last year alone, California reported 41,396 cases of identity theft—more than double of any other state in the U.S. other than Texas (see www.ftc.gov state data). Because the driver’s license is a primary form of identification in California, ID theft remains a growing issue. If ever a customer was using a false identity or had committed some other illegal act, Puente Hills could quickly match the prints on the police report with those in their database. “If they don’t want to get fingerprinted, we don’t sell them the car,” said Coleman. To date, no one has refused.

The manager is now free to present the menu, tailored for the deal and customer’s needs. The categories—platinum, gold, bronze and silver—originate with JM&A but involve a mix of products. “We present the products one at a time and let the customer do the talking,” said Coleman. “If the customer says, ‘Well, I really don’t need that,’ we ask, ‘Well, what about that product don’t you like?’ We dig deeper to find out what’s bothering them. Then, we address it again. We may do this three or four times.”

JM&A also allows financing on certain products, such as mechanical failure service or pre-paid maintenance contracts, at zero percent interest through a JM&A vendor. Jim McDavid, vice president of North America Sales of JM&A Group, shared, “Many special finance customers will take advantage of this opportunity,” said McDavid, “because their financial institution may not allow enough funding to provide for the purchase of F&I products.”

Overall sales in F&I average $1,500 per contract. Because every transaction is different, Hakes sees no particular product dominating the pack. “We push every product,” he said. “It’s up to the customer to decide what they want.” To this end McDavid reasoned, “At the end of the day, customers make purchasing decisions based on the experience and interactions they have with the F&I manager.”

Although the finance transaction itself is not videotaped, the entire dealership is outfitted with surveillance cameras. The sales office has four large television screens, wired to numerous areas of the store.

They also handle each deal with extreme scrutiny. To protect the paperwork, “Every finance manager has a door that swings shut and locks,” said Coleman. Furthermore, he added, “No deal is in their office when they go home; it’s in my office, and my door is locked every time I walk out of there. Only upper management has the key to get in.” The paperwork itself is stored in a locked location.

The following morning, Coleman audits every deal from the previous day, comparing the deal on the computer screen with the actual paperwork in front of him. Hakes is there too, discussing the deals with Coleman. “We try to use a couple sets of eyes to look at the deals after they’ve been done,” said Hakes. JM&A also visits the store twice a month and audits a random 25 deals.

The training, the facility and the safety measures are worth every penny to keep the customer comfortable, said Hakes, “because there’s nothing I can do two weeks from then, when the customer gets the survey in their hand.” For Puente Hills, the results are CSI scores that continually exceed Toyota’s standards. For the customer, it could be a renewed mindset of what a dealership is supposed to be. “Instead of, ‘I gotta go buy a car; I gotta go through this again,’” said Coleman, “it’s, ‘Let’s go down to Puente Hills and buy a car. The kids can play in the playroom!’”

 Vol 4, Issue 11