CUSTOMER-FIRST FOCUS UNIQUE AT TOYOTA UNIVERSITY
Highly professional training solves consumer satisfaction shortfalls The problem was the same - whether at Crown Toyota of Knoxville, TN or the top-volume Longo Toyota in southern California. Plainly stated, it was customer satisfaction.That Toyota's 10-year-old Lexus franchise placed high in CSI while Toyota did not has been a heavy-duty problem.Studies by Toyota Motor Sales and Toyota dealers centered
November 1, 2000
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Highly professional training solves consumer satisfaction shortfalls The problem was the same - whether at Crown Toyota of Knoxville, TN or the top-volume Longo Toyota in southern California. Plainly stated, it was customer satisfaction.
That Toyota's 10-year-old Lexus franchise placed high in CSI while Toyota did not has been a heavy-duty problem.
Studies by Toyota Motor Sales and Toyota dealers centered on the F&I office as a key to the solution for the CSI shortfall. Poor CSI was affecting penetration levels for sales of F&I products and services, which in turn was a potential blow to repeat sales of Toyota vehicles.
"Training in a university-like setting on a highly professional basis, with closely monitored follow-up back at the dealerships, was what we decided to do to address the problem head-on," recalls Glenn Sugai, national manager, client development, of the University of Toyota's school of retail professional development, based at TMS headquarters in Torrance, CA.
"And the program of one-week courses has worked beyond our expectations. It's a rigorous 10-step curriculum at the school and afterwards in the dealership."
Mr. Sugai's evaluation is backed up by testimonials from the 850 graduates of the program since its inception in March of 1998. They represent 234 of the 1,195 Toyota dealers and a sprinkling of Lexus dealers who began enrolling their F&I managers in 1999.
"Even more gratifying," reports Mr. Sugai, "is the fact that our extremely demanding certification follow-up training at the dealership has been passed by 204 of the graduates.
"Being certified means that you have increased your concentration levels on service contracts, credit insurance and prepaid maintenance - and most important, that the dealership's CSI ratings have moved up, as well.
"We ask our dealers to invest substantially in University of Toyota tuition fees, and the return on their investment is what counts for them and us."
Cost of a week's training for F&I is $2,000, not counting air fare and housing. That exceeds F&I classes at any competitor's school, but dealers who have allowed their business managers to attend have been more than satisfied.
Utah megadealer Larry H. Miller says he was drawn to the Toyota Quality Financial Management (TQFM) program and the University of Toyota because his three Toyota stores had proven the "toughest area for scoring in CSI."
But a tour of the University's facilities persuaded Mr. Miller to enroll his Toyota F&I managers.
"It's a very special tool that, when combined with the quality of Toyota products, adds more value to the franchises," he explains. "Plus, we're experiencing lower chargebacks by up to 2%, and improved profitability."
At Crown Toyota, also a Volkswagen-Isuzu dealer in Holland, MI, Darryl Barkel returned to his F&I duties an enthusiast of the five-day course he took in mid-September.
"We sell 30 to 40 new Toyotas a month," Mr. Barkel says, "but we need to generate higher penetration levels for the menu of F&I products. One of the things they showed us at the University was that we talked more than we listened when the customers came in.
"Role playing on video focused on us being more like a customer, instead of selling and pitching products only. Our sales manager, David Frank, went to a TQFM class in Torrance the week after I went, which puts us on the same page in applying the lessons we were taught to improve CSI and penetration on each sale."
In terms of postgraduate benefits, the numbers have moved substantially higher at the F&I department of Toyota of Knoxville since financial services director Robert Stephens attended the University in late 1998.
Ticking off a 1999 product penetration rate boost to 51% from 44%; a CSI score increase of 1.5 points, and a service-contract average profit lifted to $147, Mr. Stephens concedes he didn't believe his "already good" F&I department could get any better.
"TQFM and the University are about helping customers," says Mr. Stephens. "It gets the entire dealership involved. This is an entirely different way of dealing with the customer."
The cheerleading among alumni even reaches the very peak of Toyota's dealer producers - the Roger S. Penske-owned Longo Toyota, whose new-car sales average 1,400 to 1,500 a month in the Los Angeles suburb of El Monte, CA.
Finance director Chris McCarty thought Longo was doing fairly well - until he attended an F&I course. The "new ideas" Mr. McCarty picked up prompted him to send all 14 financial service managers through the intensive five-day session.
One major result at Longo Toyota was changing the presentation of F&I wares to an "overview" process presented in a "no-pressure" consultative manner, says Mr. McCarty.
"Our sales penetration rate has risen since then," he adds, "as has our CSI to an all-time peak. And our profit-per-service contract is up by nearly $200."
Eventually, as interest grows among brands dualled with Toyota or Lexus franchises, courses may be offered to dualled-line personnel, and the six-trainer faculty expanded.
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