Training in the F&I Office

Training is important in every area of a dealership, of course, but the F&I office is one place in particular where dealers certainly want to focus on regular training. But where is the need greatest within the F&I office? Which areas need the most attention? It might not be where you think.

Customer Wait Time
According to Ron Reahard, president of Reahard and Associates in Tennessee, “One of the issues we’re seeing is that F&I managers tend to make customers wait until [the manager is] ready to talk to them. And that creates customer satisfaction issues, and it reduces our ability to sell products.”

Many F&I managers want to first conduct a full interview with the customer to gather information, then go back to their office and take time to customize the menu and craft the perfect presentation. The thinking is, if they can get the proposal just right, the customer will have to buy something. However, more often than not, this will result in just the opposite.

F&I managers who do this are “wasting their time and the customer’s time trying to figure out [in advance] what they can sell them or what packages they should offer…,” said Reahard, whose company provides F&I training and consulting to dealerships. “By the time they finally think they’re ready to talk to [the customer], the customer’s gotten more and more frustrated because they don’t know what’s happening: ‘Why is it taking so long? Why can’t I go in there? What’s he or she doing back there?’”

“The customer feels their time is valuable, and they don’t like people who waste their time …,” he explained. “The sooner we engage and interact with that customer, the more products we’re going to sell and the better the experience is going to be for the consumer.”

The Reahard and Associates chief said that in some cases, the menu software can be a factor as well. He points out that some F&I offices use a menu program that does not integrate with their dealership management system, or DMS, simply because they went with software that was free; they are unaware of the hidden cost—lost time that could translate into lost sales. “The information’s in their … dealer management system, but it doesn’t populate the menu,” he said. “They have to go in and re-key information to create a menu … and that’s time-consuming.”

He said in his experience, it is best for the F&I office to have a generic menu template that offers all available products to every customer, then the F&I manager can sit down and tailor that menu with the customer. “That way, the customer sees that you’re helping them, and you get the good will that goes with that,” Reahard continued. “Today’s customers like somebody who’s going to help them. They hate somebody who wastes their time. And if you’re not adding value to their experience, you’re wasting their time.”

Leadership/Relationships
Shari Vance, who founded IPS Agency in 2005 to provide dealers with income development tools, said that one area she has been focusing on when training in dealerships is leadership, which she described as an “unconventional piece” of F&I orientation. The idea applies not only to managing the staff within the F&I office but also figures heavily into the relationship between sales and F&I. “We need to teach [F&I personnel] how to better get along with people. That’s really all it is,” she said. “Most of them have never had any sort of leadership training.”

She referred to a book called “The Magic Question” by David Cottrell. In the book, Cottrell proposed that employees want to know six things from their managers:

1. What’s really important.
2. How they are doing as individual employees.
3. How their team is doing.
4. Whether the manager cares.
5. What difference they make as employees.
6. Whether the manager is worth following.

If the manager is able to answer those six things, the employees will then ask the “magic question,” which is, “How can I help?” Vance said this theory also applies to the relationship between the sales floor and the F&I office, even though one is not subordinate to the other. The architect of the Kentucky-based IPS Agency explained that it’s primarily a matter of being clear on each side’s expectations and perceptions. When the salespeople understand the job of the F&I office and what is needed in order for them to accomplish that job, things run more smoothly. “They’re going to work better together as a team, and when they work together as a team, dealership front-end profits go up as well as back-end profits.”

Randy Crisorio, president and chief executive officers (CEO) of United Development Systems, Inc., agreed that the finance office’s relationship with the sales desk is a critical area that in some cases can make or break things for F&I. Issues between the sales desk and the F&I office are “very prevalent,” said the head of Florida company helping dealers maximize their F&I operations for 30-plus years. The biggest problem occurs when a payment is quoted to the customer that leaves no room for the addition of back-end products.

“The relationship between the desk and finance and insurance is a big one, and the desk can crucify a finance and insurance department by virtue of their work ethic and how they promote deals. Or they can assist—they can stay away from payments,” said Crisorio. He added this is a training issue that goes back to compliance and how payments are quoted (interest rate, term in months, unpaid principal and monthly payment must be given) and said sales managers are “jamming” customers into payments inappropriately on a daily basis. The solution? “It’s all about getting out on the sales floor and getting involved in the deals early; not sitting in the F&I office waiting for a salesman to come and say, ‘Mr. and Mrs. Jones just bought a car,’ but being out at the desk when that paperwork comes to the desk and working with the sale manager as a team,” the CEO said. “Those deals work out the best.”

Ability to Discover the Customer’s Needs
Reahard observed that one area often in need of attention is an F&I manager’s ability to effectively discover a customer’s needs. Oftentimes, they ask only a handful of basic questions such as who’s going to be driving the car, how long they plan on keeping it and how many miles they drive. “They don’t ask enough questions so that they can help the customers see themselves in a situation where the product would benefit them,” he said.

Mike Cassinelli, a trainer at IPS Agency, said, “The No. 1 problem with failure of the customer interview is just simply that they don’t do it. You see F&I managers who, as they become older and more experienced and learn the tricks of the trade, stop going out on the showroom floor and talking to the customer.”

Reahard recommended that F&I managers have about 30 questions ready to ask a customer, but stressed that how the interview is conducted is just as important as the questions being asked. “They need to have that down to a science, so it comes across as a conversation, not an interrogation,” he stated.

Cassinelli agreed. “If you ask five or six … questions in a row, by the fourth or fifth one, the customer, whether they say it or not, is wondering, ‘Why are you asking me all these questions?’” This can cause a customer to put up their guard and become resistant to later efforts to offer products that might benefit them. “The whole purpose of the interview is so that … we can really start to figure out what is important to them with the car purchase,” he stated. If the interview is conducted improperly, the F&I manager might uncover the information he needs but lose the opportunity to use that information effectively.

Reaheard summed up things, saying, “When the customer says, ‘I don’t need that,’ if you can’t tell them why they do, you’re done. So it’s that needs-discovery part that you’ve got to get really good at.”

Properly Presenting the Menu
“Oftentimes, F&I managers will use the menu improperly,” said  IPS’s Crisorio. Many times, this means F&I managers inadvertently give more weight to certain products at the expense of others. “If there’s one telltale piece of evidence that we’re dealing with a weak F&I manager or one who is using the menu improperly, it’s that the results are only in two different categories—service contact and [guaranteed auto protection] GAP, two of the easiest products to sell,” he revealed. This can, of course, be a compliance issue as well if the problem has gotten to the point that customers are not being presented with the option to purchase all available products.

Compliance issues aside, F&I managers could be defeating the purpose of the menu and losing back-end profits by unintentionally steering customers away from products they might find beneficial and would otherwise purchase if given enough information. This can especially be a problem when it comes to lease customers and cash deals. Crisorio estimated that 85 percent of F&I products are sold with financed vehicles and said F&I managers have run away from cash deals for years because they couldn’t make the finance reserve. He pointed out, “These customers have money … They may want their car to look good—environmental paint protection, maybe paintless dent repair [would be desirable]. Perhaps they had a car stolen and need an anti-theft system. Perhaps they lose their keys frequently. ”

Improper menu presentation, he said, results from a lack of training and discipline. “We consider it to be a real weakness that requires focus and training on … a methodology of delivering the menu the same way, every single time.” Once that is being done, the dealership must regularly and consistently track the number of products sold and income per vehicle retailed and make certain F&I personnel don’t start taking shortcuts.

Ability to Engage the Customer and Create Interest
Along with proper use of the menu, F&I managers need to make certain they are engaging the customer rather than simply making a presentation. “The words that absolutely kill your ability to sell products are, ‘Let me show you something,’” said Reahard. “They’re trying to make presentations … and today’s customers are very resistant to a presentation.” Much like conducting the customer interview without making it an interrogation, the menu presentation process also needs to take on the tone of a conversation. “We constantly train on engaging the customer in the process so that it’s not a presentation, it’s a conversation,” he further explained. “If a customer wants to hear what you have to say, you’ve got a lot better chance of selling than if you force them to listen to what you have to say.”

Objection-Handling Techniques
IPS founder Vance said most F&I staff can use help with their objection-handling techniques. The problem is often a fear of rejection; they either accept it when the customer initially says no or they get to a point where they don’t really ask the customer to buy the product. “Let’s face it. People don’t want to be rejected. So, if I don’t ask you to buy something, you can’t really tell me no.”

She said it is important to not only tell F&I personnel how to handle an objection but to get them to rehearse their technique using role-playing until it becomes almost second nature. “They’re much more likely to use [the objection-handling technique] if they have it down,” she said.

Crisorio concurred, stating, “The role-playing that should be ever-present on the training side is overcoming objections. Answering questions is easy. The training to respond [to objections] is probably the most important piece.”

Asking Questions That Get a “Yes”
Sometimes selling a product is not a matter of whether you ask a certain question; it’s a matter of how you ask the question. “Too many F&I people do not ask good closing questions,” noted Reahard, adding that the F&I manager needs to ask a trial question that will get them a yes, then ask a closing question. The key is to make saying yes easy and no difficult. He said that questions like, “Is that something you’d be interested in?” should be avoided. Reahard illustrated the point with an example of selling GAP coverage which also pays the customer’s deductible up to $1,000. He said the best way to phrase the question is, “‘Wouldn’t it be great if you didn’t have to pay your deductible?’ I’ve never had anybody say, ‘No, I like paying that deductible. I look forward to writing that check.’ You always get a yes there, and when you get the yes, you’ve earned the right to ask a closing question.”

Consistent, Regular Training on the Basics
The biggest thing to remember is that everyone in the F&I office needs regular and consistent training, no matter who they are. “One of the things that happens over time is … we take shortcuts,” said Crisorio. F&I personnel, he said, “should avail themselves of every [training] opportunity … even if they’re superstars doing big numbers.” He emphasized training “that gets back to fundamentals—commitment, consistency, discipline [and] role-playing.” Regular training that focuses on these fundamentals not only ensures F&I professionals are always prepared and decreases the chances they’ll slide into bad habits or take shortcuts, but it also helps them discover new ideas to try.

Vol 9, Issue 9