The fundamental goals and requirements of a dealership's finance and insurance department have not changed, but the tools available to help achieve profit, compliance, and customer satisfaction have.
There are a variety of options throughout the sales process that dealers should consider adopting. They can enhance the F&I department's efficiency.
It's easier to stay with what is familiar, and many in this business resist any change. Then again, there are always vendors hawking new products with incredible claims.
While these obviously need to be evaluated skeptically, to be completely resistant to all new technology is as flawed an approach as buying everything.
The balance that exists between introducing valuable new solutions and disrupting the existing F&I department flow needs to be evaluated by the dealer.
But when specific areas of weakness are demonstrated, or opportunity exists to drive efficiency, then the overall needs of the store should prevail.
Some areas of opportunity that many dealers have already embraced:
- Website credit applications are evolving. There are several solutions available that make the process more interactive for the customer, and actually enable automatic approvals. The website is the first place many consumers go to learn about the dealership. Any consumer that invests the time to complete a credit application is an exceptional prospect. The quicker and more complete the response, the better. It merits more than just an automated e-mail reply.
- Electronic menus should no longer be an option. Even a mediocre one works better than none at all. Aside from improving aftermarket sale rates, a well-designed menu helps eliminate entry error, chargebacks, and funding delays. Electronic menus that provide essential date and time stamping also deliver an additional compliance benefit establishing a formal record of the transaction.
- Electronic contracting still is not as widespread as it needs to be, but the dealer benefits are significant. Minimizing errors that delay funding, compliance benefits, and improved cash flow from the fast deposit of contract proceeds make this worthwhile and inevitable.
- Deal-structuring software is primarily used by the sales desk, but these systems can help F&I opportunities for additional profits. There are so many programs and lenders out there, it's impossible to memorize them all. Further, by showing consumers a variety of financing options, the odds of closing the deal are improved. Any subprime department of size should already be using some type of solution like this.
- Dealership-management systems and customer-relationship management data extraction solutions make segmented customer information available. Such data availability makes specific aftermarket follow-up easier. Post-sale marketing campaigns for service contracts or other aftermarket products, such as accessories or maintenance programs, are easily created.
Dealers can generate significant revenue by looking to exploit the information already in their database. They need to reach out to their existing customer base to capture this potential upside. Currently, dealers capture only a small percentage of this huge post-sale market.
Customers are spending the money for automotive accessories and warranties — just not with dealers. Dealers need to contact the customer directly and frequently, because the consumers are not looking to the dealer for these products. Vendors will do this outside work for the dealership.
It is vital that dealers look to technology beyond their DMS, and incorporate solutions where needed.
In many cases, the answer to improving profits, compliance and close rates already exists and is easily implemented.
F&I consultant Bryan Dorfler works with dealerships, lenders and aftermarket providers nationwide. He is at firstname.lastname@example.org.
Questions or comments about this column? Send us an e-mail at Dealers@wardsauto.com.