F&I, meet Amazon.

Information-technology provider CDK’s new predictive analytics helps dealership finance and insurance managers sell aftermarket products in a way similar to the e-retail giant systematically figuring out consumers’ tastes and then recommending relevant products for potential purchase.

CDK MenuVantage Platinum features so-called prescriptive selling. The patented technology uses input from consumer, vehicle, deal and third-party sources to tailor F&I product presentations to individual car buyers.

“Instead of the traditional F&I menu of ‘good, better, best’ (in the case of presenting vehicle-service contract offerings), we do what Amazon does,” says Malcolm Thorne, CDK’s chief strategy officer.

“We determine what customers are most likely to buy and then present products accordingly,” he tells WardsAuto.

The crunched data comes from two sources. One is aggregated information on buying patterns of people demographically similar to a dealership customer who has purchased a particular vehicle and now is in the F&I office considering protection plans and the like.  

The other source is the past spending behavior of a customer who is in a dealership’s system.

Combined, “you can get a rich profile on who’s buying what,” Thorne says.

The process starts with customers completing a simple ownership survey. This information is merged with information in the dealership-management system, including purchase histories and the external data to identify the F&I products most likely to resonate with each customer.

All products are presented to ensure compliance, but the order in which they are presented changes based on the individual consumer. “The predictiveness varies by customer, brand and model,” Thorne says. “That’s the nature of the science.”

It’s a matter of giving both the dealers and customers what they want, says CDK CEO Brian McDonald.

“The consumers want car buying to be easier and shorter,” he says. “Customers are more attuned to Amazon and the way it recommends products. We’re trying to make F&I less disruptive for the consumer, but at the same time maintain the profitability for the dealer.”

Today’s car buyers expect a shopping experience that’s tailored to their needs and wants, McDonald says.

Thorne draws a parallel with another online giant, Netflix, and the way it recommends movies to subscribers. “I expect Netflix to know me and what I like. Consumers have the same expectation of dealers.”

Car buyers are increasingly comfortable doing much of the front-end buying process digitally. Their willingness to do that often is of greater extent than some dealers believe, says Vince Phelan, CDK’s senior director-marketing.

He points to a CDK survey gauging the readiness of consumers to use technology more to buy vehicles compared with dealers’ perception of that level of readiness.

“There was a huge gap between what the consumers said and what the dealers thought,” Phelan says. “The perception was that it’s a Millennial thing, but the survey indicates people across all age groups are ready to move more online during the car-buying process.”

Millennials like to car shop a certain way and they’re not fond of price negotiations, but it’s a stretch to think they drive modern technology, McDonald says.

“It’s tempting to say they do, but if you go back and look at the statistics on who were the early adopters of smartphones, it was older people.”

Nearly 90% of consumers cite personalization as playing a role in their purchasing decision, CDK says.

“The days of one size fits all in the F&I department are over,” says Justin Sprague, CDK’s vice president-product marketing. “This new solution is going to transform the F&I process.”

CDK developed MenuVantage Platinum with Darwin Automotive.

sfinlay@wardsauto.com