Can F&I and Modern Retailing Co-Exist?
Today’s consumers demand — and deserve — a fast and modern way to buy cars. The industry has taken great strides to get there, but there’s still a long way to go. Especially when it comes to F&I.
The F&I process is time consuming. Buying a car will probably never as quick as a trip to the store, but it doesn’t need to drag on for hours either. Including F&I as part of an easier, seamless process will help you attract younger customers and transition to Modern Retailing.
Modern Retailing is the marriage of technology and internal processes to better serve customers in a virtual world. The idea is to create a customer experience where the dealership follows the customer’s lead for how they want to purchase a vehicle. It recognizes that technology alone can’t transform the way we sell to meet current customer expectations. Internal processes have to change too.
Our last blog showed you how to tweak your internal sales structures to implement Modern Retailing. In this blog, we’ll focus on how current F&I processes hinder a modern workflow and what you can do to fix it.
What’s the problem with F&I?
One of the primary purposes of an F&I Manager's job is to develop relationships with customers. Salespeople are trained to get the best price for a vehicle, but the F&I Manager creates the relationship and gets the customer to buy additional products.
The thought is that F&I Managers earn more because they have the relationships with customers and financing sources. However, customers dislike spending time in the F&I office. Financing sources are also likely to remain with the dealership even if the F&I Manager leaves.
Why is it still done this way?
Most dealers are reluctant to change their F&I process because it's worked in the past. The current process may be good for dealers, but it makes it harder for customers to buy a car.
Think about it: A customer finds a car, negotiates a price and agrees on a monthly payment. Then they go to F&I to talk about add-ons, which increase the monthly payment. Why spend all that time negotiating price only to spend more time increasing it?
What’s the alternative?
The alternative is to bundle all aspects of a sale into one solution that reduces the paper trail and leads both the salesperson and customer through each step of the process.
It starts with a robust CRM that accurately calculates all aspects of the deal — including the agreed-upon purchase price and licensing fees. The CRM then pushes the deal to a digital menu presentation customized for the vehicle and customer. From there, the deal is pushed to a digital signing platform. Salespeople can't miss anything because they're working in one platform with prescribed next steps that need to be followed.
When you encompass everything in one solution and cut out the time-intensive F&I presentation, the process is shorter, customers are happier and you increase CSI.
How can you train salespeople?
You can't expect to hire someone without experience and throw them into a new salesperson role. Salespeople must be trained for this new role.
At the end of the day, vehicle contracts are lengthy legal documents. Train salespeople on the contract. Review the pages and make sure they know how to explain them. Then, include salespeople in all finance and CIT meetings.
You also need to hire for personality. Look for solution consultants who have a great personality, really listen to what customers want and work to help the customer. These qualities help build rapport and trust with customers, which in turn, help increase F&I sales.
F&I and Modern Retailing can coexist if F&I is included on one sales platform with a prescribed process that must be followed. Adopting a new process will be a challenge at first, but eventually it will become standard practice. When you have a more efficient F&I process, it's easier to give customers the modern experience they deserve.