The Performance Track
Whether you work at special finance or mainstream finance, your performance must track. Although the F&I department is for the most part self-managing, there is a need to know closing ratios on each product or service represented in the F&I presentation. Accurate reports of numbers and percentages not only reflect productivity, they also serve as a baseline to measure progress and as the starting point for follow-up opportunities.
What to Track
Turns From the Sales Department: Who is turning customers? Who isn’t?
Products: Closing ratios – If the F&I department has a 53% closing ratio for service contracts, then 47% of the customers are saying “No, Thank you” to the protection plan at vehicle delivery. Follow-up to learn the reasons. Maintain a log of customer objections and share the comments with vendors, industry educators, and fellow F&I producers. Perhaps someone else has heard one of the objections before and has developed a unique way to turn the objection into a sale. Production reports are the departure point for follow-up letters and telephone calls. Then you’re ready to track closing ratios on the follow-up efforts!
Lenders: Buying habits – Who is buying what credit criteria? Approval times. Funding practices. How long does it take to turn a contract into dollars in the dealership’s bank account? How many deals are limited in the advance?
Profitability per retail sold unit: What are the averages each time you touch a deal?
How to Perform
The push for productivity is on. Just as academicians must heed the principle of publish or perish, in the vehicle industry we ignore percentages at our own peril. On the days when you wonder if it’s all just a numbers’ game, remind yourself that while senior management certainly looks at production figures, it is the percentages that drive our business. If the percentages are where they should be, the dollars will be in the bank account.
The competition to finance vehicle purchases is unrelenting. When you know the competition and what they have to offer, you will be prepared to make your own case with customers.
The definition of insanity is to continue the same process while expecting different results. Improvement begins with information. Stay on the performance track to review where you are, revise your game plan and then follow through.
World of Special Finance, October 2005, p. 18