Go Easy on Menu Items

Okay, I agree a big benefit of menu selling is the ability to offer lots of finance and insurance products to every customer in a simplified way.

BRYAN DORFLER

January 1, 2007

3 Min Read
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Okay, I agree a big benefit of menu selling is the ability to offer lots of finance and insurance products to every customer in a simplified way.

But some dealership F&I managers take this too far. They offer literally every product imaginable. As a result, many menus have become so packed with so many options that much of the value is lost. The customer becomes too frustrated and confused to decide what to buy.

The menu is supposed to make things uncomplicated, but when it gets overloaded, the choices seem like bad election advertising — so much garbage that any choice seems like the wrong one.

When designed properly and thoughtfully, the menu offers a tremendous F&I sales tool because it simply lists and groups available products and services.

Dealers should be careful about drifting too far away from the proven successful formula of menu presentation. But at some point, the law of diminishing returns kicks in if menus get too overburdened.

It is natural for an F&I manager to want to have more and more products available for the consumer to select, hoping they will buy something.

But just as no dealer would stock every possible combination of vehicle make and model, hoping for that one particular sale, it doesn't make sense for an F&I department to have every conceivable product to offer.

I visited a dealership that squeezed 12 items in its premium package menu presentation. The font was so small you almost needed a magnifying glass to read the print. But, hey, they left nothing out.

There needs to be a balance between F&I wants, dealership priorities, and customer satisfaction and sales.

Here are some tips for avoiding menu sensory overload:

  • Make sure the F&I manager pay plan reflects what the dealership hopes to achieve. So, ensure penetration levels and compensation do not reward randomness of sales, but a concerted effort towards selling the core F&I products.

  • Limit Premium/Platinum/Executive product combinations to six items, seven at most. Beyond that, it becomes excessive and confusing. (A side note: someone needs to come up with something better than package names such as Silver/Gold/Platinum or Economy/Basic/Deluxe/Premium. They're so overused. If there are better ones out there, please share.)

  • Restructure the menu items to create small packages within the different plans to enable the sale of multiple similar products. For example, the Premium level “appearance package” could include paint and fabric protection along with a dent-removal plan. The “security package” could include an alarm along with a LoJack system. This creates even more value in packages.

  • Consider dropping any product on the menu that does not have a 10% penetration rate. Absolutely remove anything that does not reach 5%. Loading up a menu because one customer in 20 buys a product is the source of the problem. An exception: an introductory product that is being tested.

  • Beyond the core products, individual F&I managers might have products that they feel more comfortable with or excited about selling. When there is a specific product that someone believes in, they tend to have far greater success selling that. So consider allowing one product on each menu for the individual F&I manager to select. As long as the same F&I manager offers the same products to all customers there shouldn't be a compliance problem. Allowing limited customization and input generates greater buy-in from the F&I manager.

No evidence shows 10 items on a menu generates more sales than six. It is the quality of products and sellers that makes the difference, not loading up the menu and hoping for the best.

F&I consultant Bryan Dorfler works with dealerships, lenders and aftermarket providers nationwide. He is at [email protected].

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