Preparing for the New Year
Out with the old and in with the new. The beginning of the year means that we should prepare for the new opportunities that a new year most certainly will bring.
* Archive old files. Dead files – the beginning of deals that never became deals -- are the main item here. Follow the dealership’s policies and procedures to archive dead files from the previous year. If you are new to F&I and unaware of the procedures, simply ask the office manager for empty file boxes and fill them with all the dead files. The documentation will typically include a buyer’s proposal (4-square), a credit application, a copy of the privacy statement, and perhaps evidence of an OFAC name search and a credit bureau. According to Regulation B, these documents should be archived for 25 months if they apply to a person, and 12 months when they apply to a business. Please keep in mind that you need to be able to prove the OFAC name search for a period of five years, a requirement separate from Regulation B guidelines.
* Evaluate the marketplace and your products. In order for F&I to be a profit center, the department needs products that the presenter believes will provide added value for the customer. Do you have the right product mix? If not, make an appointment with your vendors to find out what is available. Did you attend SEMA when it was held in Las Vegas? That is the place to see new technology.
* Review your lender relationships. How did your lenders work for you last year? Do you have a good match between your customers and the lending opportunities? How has the market changed over the past year? Are the customer credit scores up, down or the same?
* Run the year-end reports for senior management. Change is created from facts, not opinions. How many deals did each salesperson do? How many of those deals were financed? How many had service agreements? How many deals included aftermarket products? You will soon verify those who have a low front-end profit structure also have a low back-end profit structure. You will also verify the 80/20 Rule that 80 percent of your sales come from 20 percent of your sales force.
* Set the training budget. What do the numbers reveal? Are the percentages where you need them to be? If they are low, perhaps that great, loyal employee deserves an investment in their education. Schedule them for training, and keep the training date. Delay simply postpones the increase in productivity. I have actually heard some dealers say, “Oh, we’ll wait to see if the employee improves on their own prior to investing any resources in them.” My response to that line of thinking is this: If the person was good enough for you to hire in the first place, they should be good enough for you to invest in their education. When you implement what they learn, you can cash in on the benefits of education.
* Plan the F&I part of the sales meetings. As you all know, sales meetings should be educational and motivational. Bring good news to the meetings. Share the lending trends. What information is the magic bullet in making deals? How can the sales personnel tee up the sale for F&I? One of the primary rules of F&I is to build customer retention. A customer who has a positive financial experience during the ownership of a vehicle will be a return customer for the dealership and the sales professional.
* Clean your office. Look under the desk and all through the bookshelves. Although you are in the office for many hours a day, it should not look like you live there. A new year means the old trash must go.
* Check the arrangement of your office. Is it set up so that you have the undivided attention of the customer, or are they staring out the office door while you are making your presentation? If they are looking out instead of in, perhaps you can rearrange your office space so that the customers will be able to focus on you. Limit the distractions to maximize the attention.
* Place a mirror in the F&I office. The mirror will reflect light as well as keep you smiling when you are on the telephone. Depending on its placement, a mirror may also help to defuse hostile situations. People who are making a loud vocal statement will usually tone it down when they can see themselves during those times.
* Update your evidence/presentation book. Do you have current copies of repair orders and claim checks testifying to the performance of the policies to share with new customers?
2007 will be a great year if you are ready for your piece of the action.
World of Special Finance, January 2007