After traversing through a world of masks, social distancing and government shutdowns, the automotive industry again finds itself in unknown territory. This time the terrain features unprecedented demand and inventory shortages amid skyrocketing prices.
There has always been value in F&I products. But people used to put up a brick wall when you started to talk about these products. Now they will listen.
As Vice President of Automotive Training Academy by Assurant, Ritch Wheeler surveys the new landscape and offers a few recommendations. The time is now, he says, for automotive dealerships to shore up their skill sets and grow their markets.
“It’s time to set best practices and get really good at interactions with customers, not just in selling a car, but from a business office standpoint,” he says.
1. Understand How People Buy Cars
Customers spend an average of 12.8 hours researching a vehicle and ancillary products online before purchasing a new vehicle, according to Wheeler.
The number of people who buy vehicles completely online is growing. Pre-pandemic just 3% of buyers purchased vehicles online. Post-pandemic a Roadster/NADA report, “Digital Retailing is Not DIY,” finds online sales jumped to 27%. Wheeler predicts that number will continue to rise.
“Now is a great time to embrace digital retailing and get really good at it,” he says. “There are a percentage of customers who will still interact with dealerships online after the pandemic and supply shortage ends.”
Wheeler recommends dealers bolster their online business opportunities by giving their websites an upgrade. Sites need good pictures and lots of them, a meet the staff section, and videos that explain F&I products, he says.
“With the inventory shortage, there are fewer people who will drive past your lot and call you on Monday morning,” he says. “But they will call you if they have a favorable first impression on your website.”
2. Web Upgrades
Pictures and video set the stage. “You need pictures, lots of pictures,” he stresses. “Even if those pictures are available elsewhere, you don’t want them leaving your site to access them.”
He also advises dealers approach their “Meet the Staff” sections differently. In the past, websites presented formal staff descriptions that shared education, sales awards, etc. Wheeler recommends a personal approach; this is the first time a potential customer meets the staff. “You need to humanize your staff online,” he explains. “Personalize them and make them likeable. People buy products from people they trust and like.”
The section might say: “Bob moved here from Waco, Texas, after graduating from Baylor University. He has lived in the area for 10 years. He has a wife, two boys, and two dogs. When he’s not at work, you’ll find him on the water fishing.”
Today’s customers are hungry for information, particularly about F&I products. “Consumers have a greater appetite for these products than ever before,” he says. “The pandemic made them feel more vulnerable and less certain about the future.”
Customers also want fast access to information. They prefer watching a 2–3-minute video to spending 15-20 minutes reading text. Effective websites reflect this trend, Wheeler maintains.
He recommends videos that operate as sales tools and present foundational information. For example, make a series of videos that answer the following questions: What is a service contract? What does a service contract do? What are the benefits of a service contract? How does roadside assistance work?
“Videos do not have to be highly manufactured sales tools,” he says. “People want authenticity. They seek someone they can trust. The videos should include clear descriptive terms and definitions and be easily found.”
3. Introduce F&I Earlier
“There has always been value in F&I products. But people used to put up a brick wall when you started to talk about these products. Now they will listen,” Wheeler says.
But the time to introduce F&I products is not when they pick up their vehicle, he says. “People withdraw from that. They say, ‘I’ll go home and do my research and connect with someone later. I will not make a snap decision on an F&I product after doing all this thoughtful research on the car.’”
With the current inventory shortage, more consumers put down deposits then wait for delivery. In that landscape, Wheeler recommends dealers introduce F&I products earlier. “We need to talk about these products at the time of commitment,” he says. “If they come in to put down a deposit, discuss their financing needs and protection products at that time. The conversation will stop that customer from spending the next six weeks looking for financing somewhere else.”
Many dealers fear introducing financing rates and F&I product prices too early. Wheeler says they worry the consumer will shop around for better rates and prices elsewhere. “But if we don’t give them something, they will get it on their own,” he says. “And when they show up to pick up their car, they’ll say ‘No thanks, I’ve already got my financing taken care of.’ And we have lost an opportunity to provide them with products or financing.”
Introduce competitive rates from the onset. “If you try to slide something past the customer, and they catch you, you will lose the whole deal,” he says.
Have a conversation with a purpose. Find out what’s important to the customer. Ask how the vehicle fits into their lives or products that may help protect their investment. Then present a menu of products, show their features and benefits, and tell how they will benefit them.
“This conversation provides an opportunity to capture financing and show customers protection options,” he says.
4. Get Education
“Everybody… and I mean anyone who will touch a car deal through that car buyer’s journey, whether digitally or in person, needs education,” says Wheeler.
Originally posted on F&I and Showroom