The New Year is upon us. Have you made your resolutions? The first few months of the year is the perfect time to reflect on where you have come from and where you want to go. Most people resolve to lose weight, quit smoking or change their spending habits. This year, I encourage my fellow auto finance professionals to dedicate themselves to another form of self-improvement: Become the absolute best F&I manager you can be.
There are hundreds of articles on how to lose 20 pounds by summer. There are very few guides to making it a record-setting year in the F&I office. But, just like losing weight, you need to know where you are and where you want to be, and then you can create a plan to reach your goal.
Find the Baseline
Profit per retail unit (PRU) is a good starting point, but I encourage you to look deeper. There are programs that can generate detailed reports from your DMS data, but it is not necessary to talk your DP into buying fancy software. A simple spreadsheet can work wonders.
Look at your product penetrations and your average markup for finance and products. Is there a good balance of products and rate? Drill down a bit further. How many units were ineligible for products due to age or mileage? Which deals were maxed out at Line 5? Did GAP make sense or was the customer putting 50% cash down? What is your average rate markup?
As you start calculating, you will probably wish you had more data to work with. If you haven’t been collecting this information in the past, the first of the year is the perfect time to start. Every year, I find myself adding another bit of info to my spreadsheet.
Take your starting point and set reasonable goals for improvement. Just like weight loss, these goals are specific to you and your performance. Some people just need to lose 20 pounds (improve PRU); others just need to tone up a little (create a better balance between products and reserve).
I interact with finance managers within my organization and from across the country. I’ve found that many of the people who are drawn to this profession are driven by ego —myself included. We love hearing how well we are doing compared to our colleagues. There are numerous places that you can research and compare your stats to the national industry average, but before you get too confident (or desperate), remember there are always people that are above and below that number — that’s just how averages work. Focus on making yourself better every day. Even top performers can improve. So let’s say you want to increase your PRU by $100. What will it take to move that needle?
It could be as simple as getting a little extra service contract penetration and changing your mark-up by a few dollars. It could be identifying the one product that you — and your team — have been struggling to sell. Consider lowering your markup to increase acceptance and give you a net positive. Don’t just guess at it — put pencil to paper and do the math. Set specific, reasonable goals and keep them in front of you constantly. As long as you are focused, you will see an improvement.
Ask the Experts
With a goal in mind and a plan to achieve it, you’re on the right path. But you’re not alone, and you can’t be afraid to ask for advice. Pick your agent’s brains whenever they visit. Ask your trainers what is working at other dealerships. Join the discussions on Facebook, LinkedIn and other forums.
Speaking of Facebook, have you visited “Mad” Marv Eleazer’s Ethical F&I Managers page? Every August, it blows up with people asking who is going to be at Industry Summit in September. Many commenters gripe about how they can’t afford to go or take the time off. If they waited until August to decide, they’re probably right. You have to plan ahead to take advantage of training opportunities. Approach your GM or DP now with the request for training — it’s worth the time and expense.
Finally, ask a friend to hold you accountable to your goals. You’re more likely to show up at the gym if your workout partner is waiting for you, and you’re more likely to improve your performance with an F&I buddy holding you accountable. I’m fortunate to work for a dealership that is very interested in F&I. Many dealers leave the finance office on an island.
Whatever your situation, I encourage you to reach out to a coworker, an agent or a trainer you trust. Join me and Marv on Ethical F&I Managers or, if you’d like, send me an email. With hard work, focus and a little support, 2014 will be your best year ever. Cheers!
Kelly Wadlinger is the studio lead at Faulkner Fiat in Harrisburg, Pa., a position which encompasses the roles traditionally held by finance and
sales managers. [email protected]