Way back in 1971, C.P. Snow wrote about technology in the New York Times. He said, “Technology... is a queer thing. It brings you great gifts with one hand, and it stabs you in the back with the other.”

Many dealers are voicing that sentiment these days. Far too few have done anything about it. Some have learned to use computer software with skill. They use the apps on  iPhones, iPads, and Blackberries. They have created an effective Web site. They use  FaceBook and Twitter and LinkedIn for social networking. For others, these are merely words and technologies that test their ability to conduct both business and their private lives. Dealers, already feeling the brunt of the two-plus year recession and massive changes in the car industry, are becoming increasingly concerned about their ability to not only keep up, but to even remain in the playing field.

Why should dealers bother with such things? Isn’t the old way good enough? Nope!

Customers who always shopped on the lot are now shopping on the Internet before they take a step toward a dealership. They’ve researched every model in their price range and with the features they want. They’ve read a dozen articles about how to get the best deal. They’ve become more savvy than many sales people hired by dealerships; they know their credit score; they know where they can find the best price on insurance, window tinting, undercoating, you name it. Everything once sold to them by a finance officer from the menu is for sale on the Internet.

Are you one of the dealerships where handwringing has become a daily pastime? Have you taken a close look at your bottom line? Have you noticed what would happen to your finance portfolio if you removed your sub-vent rated and nonprime customers? Have the numbers of your  prime-financing customers dwindled to an all-time low? Perhaps you haven’t seen the drop in your captive financing yet, but beware, it’s coming just as surely as the first snowstorm.  

Snow was right, back in 1971! The Internet can either become a beacon for drawing in more satisfied customers to your dealership and vastly increase your bottom line, or it can stab you in the back. It can be your best friend or your worst enemy. How?

Statistics show that 80% of car customers go online before they make the decision to buy and before they come to your dealership. What are they researching? Brands, models, features and, most of all, prices. Most of all, prices. The majority of Americans in today’s economy are deeply concerned about their budget. They have a fixed amount to spend on a car payment and all the other expenses involved in owning it. The vehicle they choose must fit within that fixed figure. They cannot afford to buy on whim or to make a careless mistake. They won’t take the chance of being bamboozled into buying things they don’t want, don’t need, and can’t afford by a fast-talking sales or finance manger

Where do these savvy customers get their information? One of their first sources is Edmunds, the friendly consumer-shopping guide. Edmunds has never been and still isn’t the dealer’s friend. Edmunds does whatever is necessary to achieve the sale on vehicles and products from the Internet shopper . . . and then refers these buyer to specific retailers to  obtain a fee! Banks. Finance companies. Insurance companies. You name it.

Don’t let them get a strangle hold on your customers! If you haven’t already checked this article on Edmunds.com, perhaps you should do so right now!

Confessions of an Auto Finance Manager

In the Back Rooms of America's Car Dealerships
By Philip Reed, Senior Consumer Advice Editor and Nick James

Introduction

"Congratulations, you're getting a great deal!" the car salesman says, pumping your hand. "Let's sign the paperwork and you'll be on your way in your new car!"

At first you're relieved — the negotiating is over. But then the salesman walks you down a back hallway to a stark, cramped office with "Finance and Insurance" on the door. Inside, a man in a suit sits behind the desk. He greets you with a faint smile on his face. An hour later you walk out in a daze: The whole deal was reworked, your monthly payment soared and you bought products you didn't really want.

What happened to your great deal?

You just got hit by the "F&I Man," also called the finance officer. He waits in the back of every dealership for unsuspecting customers so he can increase the profit for the dealership and boost his commission.

In this four-part series, written by veteran auto finance manager Nick James, you will learn the F&I man's tricks and how to avoid them. When you're done, you'll be ready to safely navigate this crucial part of the car buying process, and the F&I man will never work his "magic" on you again.

— The Editors at Edmunds.com

Are you still ushering your customers into the office of your “F&I Man”? No? You have a Web site? You update it once a month? You have a tech-savvy employee who checks your e-mail messages every morning? BUT . . . how would you answer these questions?

When your potential customers come to your Web site, what resources do you have available to steer them away from online financing? Do you have a quick reference guide for their buying the vehicle that fits their budget and your financing terms? Is the information presented in a complete, forthright and friendly manner? Does it enlist confidence and trust? Will readers feel they’d get a no-nonsense financing deal from you?

If these online customers make a call to ask a few questions, does your finance manager answer them, or resort to the former game of “I can only reveal those options when you come in for an interview”? Does he or she become discouraged by the process of reviewing transactions over the phone? Does your Internet manager have direct access to your finance manager at all times; avoid posting rates and product pricing on your Web site; work well with your sales and finance departments? Have you utilized the I-chat technology now readily available to instantly answer your customers’ finance questions? How many phone calls to your finance department go unanswered on a daily basis? How are online customer calls being handled in your F&I office?

Reducing your finance penetration will not only effect the overall performance of your dealership, but will negatively effective your reinsurance investment. If your customers are financing with someone else, they could also be buying their other products. Take a long and serious look at the insurance products you sell, the agent who works with you, and the changes that must be made to keep you competitive with the technology available to all your customers. You must remain competitive in products offered, their quality, and their prices. Should you be considering a new partner?

What new and creative processes are you providing your current and potential customers within your Web site? Have you considered presenting your menu as a virtual finance manager? Do you have WebEx with a preloaded menu available for review with your customers whether they are onsite in your finance office or sitting in the comfort of their home? Why not?

An upfront sales approach is the best way to reestablish a thriving business in today’s technological world. Teenagers and college students are facile in the use of every conceivable tool involving the information highway. They are your future customers. They will find Edmunds and every comparable site and use the information to their advantage. Provide them with a dozen reasons to buy their vehicle and products from your dealership. Ensure them that financing their dream car with you is the only sensible choice.  

Although computer use and Internet technology has been around for several decades, it has taken a giant leap in recent years as more and more consumers realize they can save themselves time and money by letting their fingers do the walking. Another great American journalist, Sydney J. Harris, who wrote for the Chicago Daily News and later the Chicago Sun-Times, died in the late 80s; but, he was savvy about where technology would take us. He said, “The real danger is not that computers will begin to think like men, but that men will begin to think like computers.”

We’ve reached that point. Where in the world is your finance penetration? It’s time to find out! Do it . . . today.

CCI Learning Center offers “F&I Live On-Line Training” F&I Virtual Showroom.  Keep your finance penetration intact… increase your performance through our cost effective webinars… guaranteed!  Visit www.ccilearningcenter.com today!

Way back in 1971, C.P. Snow wrote about technology in the New York Times. He said, “Technology... is a queer thing. It brings you great gifts with one hand, and it stabs you in the back with the other.”

Many dealers are voicing that sentiment these days. Far too few have done anything about it. Some have learned to use computer software with skill. They use the apps on  iPhones, iPads, and Blackberries. They have created an effective Web site. They use  FaceBook and Twitter and LinkedIn for social networking. For others, these are merely words and technologies that test their ability to conduct both business and their private lives. Dealers, already feeling the brunt of the two-plus year recession and massive changes in the car industry, are becoming increasingly concerned about their ability to not only keep up, but to even remain in the playing field.

Why should dealers bother with such things? Isn’t the old way good enough? Nope!

Customers who always shopped on the lot are now shopping on the Internet before they take a step toward a dealership. They’ve researched every model in their price range and with the features they want. They’ve read a dozen articles about how to get the best deal. They’ve become more savvy than many sales people hired by dealerships; they know their credit score; they know where they can find the best price on insurance, window tinting, undercoating, you name it. Everything once sold to them by a finance officer from the menu is for sale on the Internet.

Are you one of the dealerships where handwringing has become a daily pastime? Have you taken a close look at your bottom line? Have you noticed what would happen to your finance portfolio if you removed your sub-vent rated and nonprime customers? Have the numbers of your  prime-financing customers dwindled to an all-time low? Perhaps you haven’t seen the drop in your captive financing yet, but beware, it’s coming just as surely as the first snowstorm.  

Snow was right, back in 1971! The Internet can either become a beacon for drawing in more satisfied customers to your dealership and vastly increase your bottom line, or it can stab you in the back. It can be your best friend or your worst enemy. How?

Statistics show that 80% of car customers go online before they make the decision to buy and before they come to your dealership. What are they researching? Brands, models, features and, most of all, prices. Most of all, prices. The majority of Americans in today’s economy are deeply concerned about their budget. They have a fixed amount to spend on a car payment and all the other expenses involved in owning it. The vehicle they choose must fit within that fixed figure. They cannot afford to buy on whim or to make a careless mistake. They won’t take the chance of being bamboozled into buying things they don’t want, don’t need, and can’t afford by a fast-talking sales or finance manger

Where do these savvy customers get their information? One of their first sources is Edmunds, the friendly consumer-shopping guide. Edmunds has never been and still isn’t the dealer’s friend. Edmunds does whatever is necessary to achieve the sale on vehicles and products from the Internet shopper . . . and then refers these buyer to specific retailers to  obtain a fee! Banks. Finance companies. Insurance companies. You name it.

Don’t let them get a strangle hold on your customers! If you haven’t already checked this article on Edmunds.com, perhaps you should do so right now!

Confessions of an Auto Finance Manager

In the Back Rooms of America's Car Dealerships
By Philip Reed, Senior Consumer Advice Editor and Nick James

Introduction

"Congratulations, you're getting a great deal!" the car salesman says, pumping your hand. "Let's sign the paperwork and you'll be on your way in your new car!"

At first you're relieved — the negotiating is over. But then the salesman walks you down a back hallway to a stark, cramped office with "Finance and Insurance" on the door. Inside, a man in a suit sits behind the desk. He greets you with a faint smile on his face. An hour later you walk out in a daze: The whole deal was reworked, your monthly payment soared and you bought products you didn't really want.

What happened to your great deal?

You just got hit by the "F&I Man," also called the finance officer. He waits in the back of every dealership for unsuspecting customers so he can increase the profit for the dealership and boost his commission.

In this four-part series, written by veteran auto finance manager Nick James, you will learn the F&I man's tricks and how to avoid them. When you're done, you'll be ready to safely navigate this crucial part of the car buying process, and the F&I man will never work his "magic" on you again.

— The Editors at Edmunds.com

Are you still ushering your customers into the office of your “F&I Man”? No? You have a Web site? You update it once a month? You have a tech-savvy employee who checks your e-mail messages every morning? BUT . . . how would you answer these questions?

When your potential customers come to your Web site, what resources do you have available to steer them away from online financing? Do you have a quick reference guide for their buying the vehicle that fits their budget and your financing terms? Is the information presented in a complete, forthright and friendly manner? Does it enlist confidence and trust? Will readers feel they’d get a no-nonsense financing deal from you?

If these online customers make a call to ask a few questions, does your finance manager answer them, or resort to the former game of “I can only reveal those options when you come in for an interview”? Does he or she become discouraged by the process of reviewing transactions over the phone? Does your Internet manager have direct access to your finance manager at all times; avoid posting rates and product pricing on your Web site; work well with your sales and finance departments? Have you utilized the I-chat technology now readily available to instantly answer your customers’ finance questions? How many phone calls to your finance department go unanswered on a daily basis? How are online customer calls being handled in your F&I office?

Reducing your finance penetration will not only effect the overall performance of your dealership, but will negatively effective your reinsurance investment. If your customers are financing with someone else, they could also be buying their other products. Take a long and serious look at the insurance products you sell, the agent who works with you, and the changes that must be made to keep you competitive with the technology available to all your customers. You must remain competitive in products offered, their quality, and their prices. Should you be considering a new partner?

What new and creative processes are you providing your current and potential customers within your Web site? Have you considered presenting your menu as a virtual finance manager? Do you have WebEx with a preloaded menu available for review with your customers whether they are onsite in your finance office or sitting in the comfort of their home? Why not?

An upfront sales approach is the best way to reestablish a thriving business in today’s technological world. Teenagers and college students are facile in the use of every conceivable tool involving the information highway. They are your future customers. They will find Edmunds and every comparable site and use the information to their advantage. Provide them with a dozen reasons to buy their vehicle and products from your dealership. Ensure them that financing their dream car with you is the only sensible choice.  

Although computer use and Internet technology has been around for several decades, it has taken a giant leap in recent years as more and more consumers realize they can save themselves time and money by letting their fingers do the walking. Another great American journalist, Sydney J. Harris, who wrote for the Chicago Daily News and later the Chicago Sun-Times, died in the late 80s; but, he was savvy about where technology would take us. He said, “The real danger is not that computers will begin to think like men, but that men will begin to think like computers.”

We’ve reached that point. Where in the world is your finance penetration? It’s time to find out! Do it . . . today.

CCI Learning Center offers “F&I Live On-Line Training” F&I Virtual Showroom.  Keep your finance penetration intact… increase your performance through our cost effective webinars… guaranteed!  Visit www.ccilearningcenter.com today!

Dozens of newly created automated menu systems are popping up on Internet sites and through sales vendors claiming their use will vastly increase dealer profits while limiting liability. Of course each system is “the best one available!” Can you believe the advertising hype?

Most F&I trainers support at least one or more of these systems and the vendors who sell them. Some have even become vendors themselves. They say they can guarantee a substantial increase in any dealer’s bottom line, IF the dealer signs up with them today!

I fully support the idea of an automated menu system, but my support comes with words of caution. “No technology will ever replace an enthusiastic finance professional who consistently offers their products while being interactive with the customer and determined to enhance their overall buying experience.”

If your finance manager doesn’t completely understand the concept behind menu selling, it won’t matter what automated system you use or which vendor you believe. An automated menu does speed delivery time, and it will reduce errors (which in and of itself is useful, considering the cost of an F&I employee who hasn’t been properly trained), but no automated menu system will EVER do the work for you. Person to person dialogue is still imperative. That’s how dealership trust and loyalty is gained and retained.

For the past decade, I have visited dealerships nationwide as a consultant and reviewed countless transactions for proper menu presentation. Here’s the truth. Far too many of the menus have either been omitted from the deal jackets or significantly altered, based upon the F&I associate’s individual decision. The base payment has been deleted, the APR, the relevant buying numbers, and any significant disclosures are wiped from the face of the menu. That decision is almost always due to the F&I manager’s comfort level, degree of training, or personal desire to hit his pay plan goals. Keep in mind that the menu provider is not responsible for mandating full disclosure and certainly won’t take accountability for any tampering with disclosure terms.          

A transparent selling system puts all the cards on the table for every customer and allows that customer to choose whatever product he or she wants or needs. Or doesn’t want, because it isn’t needed! Regrettably, full disclosure and bankable candor are still not a conventional practice. Many finance managers still don’t buy into the necessity for a transparent selling system, even though their pushy selling techniques put the dealership’s reputation at risk or diminish customer retention. No automated menu system is going to get them to comply with federal regulations. It will do nothing to gain their trust or get them to change their ways. A crafty manager will simply figure out how to delete and modify and adjust, until the system suits his long-used and outdated F&I methods. Ironically, dealers can implement checkpoints to mandate that 100% of the menu be presented to 100% of their customers 100% of the time. .. . but few succeed in this attempt. Even when the menus are printed and signed by the customer, they are free from any notations (sterile) and there is no evidence of an actual presentation or engagement with the finance manager. No indication that the finance manager tackled an objection! Just because the F&I manager had the customer authorize the menu form doesn’t mean the menu was delivered as trained to do.

One of the benefits of menu selling is to prevent the prejudging of customers by presenting every product 100% of the time utilizing consistent pricing. A finance manager who operates from fear of the unknown often deletes one product or the other and discounts them prior to the presentation of the menu! Unless those terms and products are locked down, an automated menu system will not deter this behavior. Nor will it substitute for a well-rehearsed professional sales associate.

Automated systems are here to stay. Some are much better than others. Regardless of which one a dealership decides to use, the results promised and expected will not take place if the foundation for menu use hasn’t been well established. Until everyone in the dealership knows and understands the basic fundamentals of menu selling and the concept of why transparent F&I sales work, investing significant dollars in an automated product will be a waste. You can’t speak or write French, until you have the vocabulary. Becoming fluent in speaking “menu selling” comes with proper and ongoing training.

CCI Learning Center is a leader in providing finance & insurance training for automotive, RV, and powersport dealers nationwide. CCI recently announced its new online F&I workshop: F&I Fundamentals & Integrity Sales. Learn how to effectively enhance your menu presentation with this customized, cost-efficient live online workshop that will get your finance manager back on track. Nothing great has ever been easy. If you keep on doing what you’ve been doing, you keep on getting what you got! CCI continues to offer all its services, including on-site training at a minimal cost through efficient reinsurance programs geared towards enhanced future attainment. Contact CCI today for a free 20-minute analysis.

Dozens of newly created automated menu systems are popping up on Internet sites and through sales vendors claiming their use will vastly increase dealer profits while limiting liability. Of course each system is “the best one available!” Can you believe the advertising hype?

Most F&I trainers support at least one or more of these systems and the vendors who sell them. Some have even become vendors themselves. They say they can guarantee a substantial increase in any dealer’s bottom line, IF the dealer signs up with them today!

I fully support the idea of an automated menu system, but my support comes with words of caution. “No technology will ever replace an enthusiastic finance professional who consistently offers their products while being interactive with the customer and determined to enhance their overall buying experience.”

If your finance manager doesn’t completely understand the concept behind menu selling, it won’t matter what automated system you use or which vendor you believe. An automated menu does speed delivery time, and it will reduce errors (which in and of itself is useful, considering the cost of an F&I employee who hasn’t been properly trained), but no automated menu system will EVER do the work for you. Person to person dialogue is still imperative. That’s how dealership trust and loyalty is gained and retained.

For the past decade, I have visited dealerships nationwide as a consultant and reviewed countless transactions for proper menu presentation. Here’s the truth. Far too many of the menus have either been omitted from the deal jackets or significantly altered, based upon the F&I associate’s individual decision. The base payment has been deleted, the APR, the relevant buying numbers, and any significant disclosures are wiped from the face of the menu. That decision is almost always due to the F&I manager’s comfort level, degree of training, or personal desire to hit his pay plan goals. Keep in mind that the menu provider is not responsible for mandating full disclosure and certainly won’t take accountability for any tampering with disclosure terms.          

A transparent selling system puts all the cards on the table for every customer and allows that customer to choose whatever product he or she wants or needs. Or doesn’t want, because it isn’t needed! Regrettably, full disclosure and bankable candor are still not a conventional practice. Many finance managers still don’t buy into the necessity for a transparent selling system, even though their pushy selling techniques put the dealership’s reputation at risk or diminish customer retention. No automated menu system is going to get them to comply with federal regulations. It will do nothing to gain their trust or get them to change their ways. A crafty manager will simply figure out how to delete and modify and adjust, until the system suits his long-used and outdated F&I methods. Ironically, dealers can implement checkpoints to mandate that 100% of the menu be presented to 100% of their customers 100% of the time. .. . but few succeed in this attempt. Even when the menus are printed and signed by the customer, they are free from any notations (sterile) and there is no evidence of an actual presentation or engagement with the finance manager. No indication that the finance manager tackled an objection! Just because the F&I manager had the customer authorize the menu form doesn’t mean the menu was delivered as trained to do.

One of the benefits of menu selling is to prevent the prejudging of customers by presenting every product 100% of the time utilizing consistent pricing. A finance manager who operates from fear of the unknown often deletes one product or the other and discounts them prior to the presentation of the menu! Unless those terms and products are locked down, an automated menu system will not deter this behavior. Nor will it substitute for a well-rehearsed professional sales associate.

Automated systems are here to stay. Some are much better than others. Regardless of which one a dealership decides to use, the results promised and expected will not take place if the foundation for menu use hasn’t been well established. Until everyone in the dealership knows and understands the basic fundamentals of menu selling and the concept of why transparent F&I sales work, investing significant dollars in an automated product will be a waste. You can’t speak or write French, until you have the vocabulary. Becoming fluent in speaking “menu selling” comes with proper and ongoing training.

CCI Learning Center is a leader in providing finance & insurance training for automotive, RV, and powersport dealers nationwide. CCI recently announced its new online F&I workshop: F&I Fundamentals & Integrity Sales. Learn how to effectively enhance your menu presentation with this customized, cost-efficient live online workshop that will get your finance manager back on track. Nothing great has ever been easy. If you keep on doing what you’ve been doing, you keep on getting what you got! CCI continues to offer all its services, including on-site training at a minimal cost through efficient reinsurance programs geared towards enhanced future attainment. Contact CCI today for a free 20-minute analysis.

For most dealers nationwide, a one-pricing sales strategy is a tough concept to accept. To even suggest that their sales staff should be given the authority to finalize every transaction at their desks and include the menu presentation without sending any customer into “the box” is heart-stopping for them. What about banning the F&I office altogether?  

Naysayers will tell you it can’t be done. You have to lock down customers in the traditional F&I office in order to sell money-making products that earn profits. No sales person can possibly sell the car and aftermarket products as well!

Well, one dealer I know is doing just that and very successfully. During these tough economic times, Colonial Toyota in Milford, CT, made a critical decision. The dealer chose to ban the F&I office and let his sales staff take charge of every transaction from beginning to end.  He gave them all the title of “sales manager.” I applaud Colonial Toyota for realizing that today’s customers have changed and they needed to initiate their own changes to capture their business.

I was hired to train these sales managers in the proper and most effective presentation of menu presentation. I was skeptical at first, and then wholly impressed by this dealer’s innovative “out of the box” thinking. The sales staff was enthusiastic and infused with optimism. The showroom is humming to a different beat of the drum and the excitement is palpable. Customers are buying and liking the upfront honesty projected by the staff.

Ironically, far too many dealerships still don’t understand the necessity for transparent selling. They would rather stick to the status quo and continue to use outdated sales techniques. Their F&I managers tout their use of menu selling, but their process is seldom conducted with proper disclosures. They rarely review the base payment with customers for fear that any upfront disclosure will reduce their personal income. Although there are several great menu software providers on the market, the reality is that individual dealership menus are often changed to accommodate the missing base payment or itemization of cost. Dealers and F&I managers fear they cannot make a profit by being upfront with their customers. It’s time to set fears aside.

One-price vehicle sales and the menu go together. Take Saturn, for example. Back in 1989-1990, when they first opened their doors with a brave new concept of “one-price” sales, the so-called experts in the industry said it wouldn’t work. Customers wanted to haggle for the best deal. Customer wouldn’t pay retail for a car without the bargaining process. Surprise! Customers did buy Saturns with the one-price offer and were happy to do it. The showrooms were packed with customers and the cars were hard to come by!

Especially to today’s recession market, more dealers should think seriously about changing their ways. Perhaps they should get on the phone and talk with other dealers who are successfully using the one-price sales system. They will learn that a transparent finance process is the best way to increase overall profits, while limiting liability and keeping customers coming back for more. They will learn that, sometimes, it’s best to just clean out the barn! Get rid of old practices that aren’t working. This clean-up process comes with an important “fiat,” of course. The sales staff must receive thorough training in how to effectively fulfill their new obligations. Dealers will have to make an investment in their education so that everyone is on the same page.

AutoNation demonstrated that one-price sales on pre-owned vehicles is not only feasible, but profitable. In 1996, when this pioneer of menu selling opened its doors to transparent selling policies, their showrooms were open environments. Like Saturn, the showrooms were soon packed with customers who weren’t dragged from one office to another. They were sold the vehicle of choice and a menu presentation followed. The pessimists were astounded by the results. How could anyone make a profit this way and, especially, by being honest and not playing the game? In AutoNation’s menu selling, every product was priced consistently and offered 100% of the time to every customer! And . . . no customer was ever sent into “the box” for a grueling, much dreaded, pressure-filled sales battle! 

The more transparent your sales procedure becomes, the more income you will generate.  That’s a fact. But it’s also true that nothing good comes without hard work. Changing ingrained habits is a daunting task. Doing a complete turnabout is scary. Learning innovative techniques may seem risky, but the rewards are plentiful. Now is the time for your dealership to take a new look at its old ways of doing business.

Most of us had to spend considerable time learning now to use computers and the Internet and the plethora of software available for running our business. The long hours spent were worth it. Our office work was streamlined. Communication with customers and suppliers improved and business profits grew. The quantity of documents filed in already bulging cabinets was significantly cut. We became leaner and more proficient.

When initiating a change in procedures, training is critical. You want your staff to feel secure and optimistic. This only comes when they can meet any customer at any income level and guide them intelligently into making the right choices. Give them the tools to be their best. Customers buy from those who exude self-confidence and know how to communicate effectively. Give your sales team new responsibilities, new techniques, new expectations, then train them in how to be successful in their endeavors and then watch them reel in the profits!

CCI Learning Center provides online workshops for any professional in or out of the automotive business who seeks a position in management. We work with automotive, RV, credit unions and call centers nationwide. CCI Learning Center will be offering a new online workshop on developing an “in-house, virtual finance office” soon! Your dealership can be open for business on a 24/7 basis. We are experts in teaching your team how to increase profits by thinking outside the box! Give us a call . . . today!

For most dealers nationwide, a one-pricing sales strategy is a tough concept to accept. To even suggest that their sales staff should be given the authority to finalize every transaction at their desks and include the menu presentation without sending any customer into “the box” is heart-stopping for them. What about banning the F&I office altogether?  

Naysayers will tell you it can’t be done. You have to lock down customers in the traditional F&I office in order to sell money-making products that earn profits. No sales person can possibly sell the car and aftermarket products as well!

Well, one dealer I know is doing just that and very successfully. During these tough economic times, Colonial Toyota in Milford, CT, made a critical decision. The dealer chose to ban the F&I office and let his sales staff take charge of every transaction from beginning to end.  He gave them all the title of “sales manager.” I applaud Colonial Toyota for realizing that today’s customers have changed and they needed to initiate their own changes to capture their business.

I was hired to train these sales managers in the proper and most effective presentation of menu presentation. I was skeptical at first, and then wholly impressed by this dealer’s innovative “out of the box” thinking. The sales staff was enthusiastic and infused with optimism. The showroom is humming to a different beat of the drum and the excitement is palpable. Customers are buying and liking the upfront honesty projected by the staff.

Ironically, far too many dealerships still don’t understand the necessity for transparent selling. They would rather stick to the status quo and continue to use outdated sales techniques. Their F&I managers tout their use of menu selling, but their process is seldom conducted with proper disclosures. They rarely review the base payment with customers for fear that any upfront disclosure will reduce their personal income. Although there are several great menu software providers on the market, the reality is that individual dealership menus are often changed to accommodate the missing base payment or itemization of cost. Dealers and F&I managers fear they cannot make a profit by being upfront with their customers. It’s time to set fears aside.

One-price vehicle sales and the menu go together. Take Saturn, for example. Back in 1989-1990, when they first opened their doors with a brave new concept of “one-price” sales, the so-called experts in the industry said it wouldn’t work. Customers wanted to haggle for the best deal. Customer wouldn’t pay retail for a car without the bargaining process. Surprise! Customers did buy Saturns with the one-price offer and were happy to do it. The showrooms were packed with customers and the cars were hard to come by!

Especially to today’s recession market, more dealers should think seriously about changing their ways. Perhaps they should get on the phone and talk with other dealers who are successfully using the one-price sales system. They will learn that a transparent finance process is the best way to increase overall profits, while limiting liability and keeping customers coming back for more. They will learn that, sometimes, it’s best to just clean out the barn! Get rid of old practices that aren’t working. This clean-up process comes with an important “fiat,” of course. The sales staff must receive thorough training in how to effectively fulfill their new obligations. Dealers will have to make an investment in their education so that everyone is on the same page.

AutoNation demonstrated that one-price sales on pre-owned vehicles is not only feasible, but profitable. In 1996, when this pioneer of menu selling opened its doors to transparent selling policies, their showrooms were open environments. Like Saturn, the showrooms were soon packed with customers who weren’t dragged from one office to another. They were sold the vehicle of choice and a menu presentation followed. The pessimists were astounded by the results. How could anyone make a profit this way and, especially, by being honest and not playing the game? In AutoNation’s menu selling, every product was priced consistently and offered 100% of the time to every customer! And . . . no customer was ever sent into “the box” for a grueling, much dreaded, pressure-filled sales battle! 

The more transparent your sales procedure becomes, the more income you will generate.  That’s a fact. But it’s also true that nothing good comes without hard work. Changing ingrained habits is a daunting task. Doing a complete turnabout is scary. Learning innovative techniques may seem risky, but the rewards are plentiful. Now is the time for your dealership to take a new look at its old ways of doing business.

Most of us had to spend considerable time learning now to use computers and the Internet and the plethora of software available for running our business. The long hours spent were worth it. Our office work was streamlined. Communication with customers and suppliers improved and business profits grew. The quantity of documents filed in already bulging cabinets was significantly cut. We became leaner and more proficient.

When initiating a change in procedures, training is critical. You want your staff to feel secure and optimistic. This only comes when they can meet any customer at any income level and guide them intelligently into making the right choices. Give them the tools to be their best. Customers buy from those who exude self-confidence and know how to communicate effectively. Give your sales team new responsibilities, new techniques, new expectations, then train them in how to be successful in their endeavors and then watch them reel in the profits!

CCI Learning Center provides online workshops for any professional in or out of the automotive business who seeks a position in management. We work with automotive, RV, credit unions and call centers nationwide. CCI Learning Center will be offering a new online workshop on developing an “in-house, virtual finance office” soon! Your dealership can be open for business on a 24/7 basis. We are experts in teaching your team how to increase profits by thinking outside the box! Give us a call . . . today!

Full Disclosure Menu Selling or Not?

You would think with the magnifying glass on car dealerships around the country today, F&I managers would take heed of the importance placed on full disclosure selling.

You would think they would understand why disclosing a base payment, the APR, the term and all buying numbers prior to offering other product options is critically important.

Unfortunately, there is still confusion regarding “full-disclosure” menu selling. 

Utilizing the menu to offer 100% of the products to 100% of their customers 100% of the time is good business . . . BUT, it’s not the entire story.

Gone are the days when choosing certain products to sell to certain customers works. A consistent pricing matrix for products offered is crucial. Overcharging one customer for a product, because we think we can get away with it or because we learn they have poor credit history is no longer an acceptable business practice.

A full disclosure menu is utilized to ensure that every customer clearly understands the terms of the contract prior to the negotiation of other products. The key word is “prior.” This means the manager is not vague in negotiation efforts and did not confuse or manipulate the customer. It means the manager can demonstrate that every customer is treated fair and square.

A menu, although not a mandatory document, states that the dealership is honest and forthright in presentation efforts and that the customer personally selected products after fully understanding the basics of the sale. It states that the dealership has no purposeful intention to manipulate or confuse its customers. 

Managers have the responsibility to ensure utilization of the menu safeguards the dealer against potential liability. If this premise is understood . . . why don’t we have more managers buying into the practice?  One reason is that certain managers lack the skills required to overcome objections. For some, it’s due to the fear factor.

Manager who want to succeed in menu use must prepare, study, rehearse word tracks, and conduct practice interview sessions. Those who decide to ignore these steps won’t be ready to deal head on with the customer’s concerns. Sometimes, when the deal comes into finance from the sales department, the customer has not been told the exact monthly payment or even what they agreed to pay for the vehicle. Some stores still have no buyer’s agreement signed by the sales manager or customer before the deal comes into the finance office. It’s up to the finance manager to disclose this significant information.

This may sound absurd to some reading this blog, but the truth is many stores still support “box” closing. Box closing and menu selling do not go hand-in-hand. Managers who tell me they can effectively box close and utilize a “full disclosure menu selling presentation” increase my anxiety level. The two methods of selling just don’t mix. Time after time, I review menus that aren’t complete—the base payment or the buying numbers have been deleted. I have often reviewed menus where the finance manager has deleted the disclosure terms. This is a dealer-controlled sales procedure, but for the record, we should call it what it is, option selling, box closing and step selling. The idea behind full disclosure menu selling is that the customer knows the base payment, the APR, the term, and all the buying numbers prior to the negotiation of products. This has always been important . . . but after two years of enormous changes in the car selling industry, it rises to the top of the list. Savvy customers want to be treated with respect and honesty. When they are, they become valuable word-of-mouth advertisers for the dealership and repeat customers.

Full disclosure menu selling works. It’s a great way to increase overall performance without jeopardizing dealership business. It retains customers for life. Menu selling is not just about the finance department. Menu selling is a “culture”. . . a belief. The store must support full disclosure selling from the sales person on the lot to the sales management and everyone in the business office. To pretend that compliance begins in finance is a foolish practice. Having every manager on the same page with the same message will increase profits significantly, while keeping the customer coming back time after time.   You don’t have to break laws to break records!

Full Disclosure Menu Selling or Not?

You would think with the magnifying glass on car dealerships around the country today, F&I managers would take heed of the importance placed on full disclosure selling.

You would think they would understand why disclosing a base payment, the APR, the term and all buying numbers prior to offering other product options is critically important.

Unfortunately, there is still confusion regarding “full-disclosure” menu selling. 

Utilizing the menu to offer 100% of the products to 100% of their customers 100% of the time is good business . . . BUT, it’s not the entire story.

Gone are the days when choosing certain products to sell to certain customers works. A consistent pricing matrix for products offered is crucial. Overcharging one customer for a product, because we think we can get away with it or because we learn they have poor credit history is no longer an acceptable business practice.

A full disclosure menu is utilized to ensure that every customer clearly understands the terms of the contract prior to the negotiation of other products. The key word is “prior.” This means the manager is not vague in negotiation efforts and did not confuse or manipulate the customer. It means the manager can demonstrate that every customer is treated fair and square.

A menu, although not a mandatory document, states that the dealership is honest and forthright in presentation efforts and that the customer personally selected products after fully understanding the basics of the sale. It states that the dealership has no purposeful intention to manipulate or confuse its customers. 

Managers have the responsibility to ensure utilization of the menu safeguards the dealer against potential liability. If this premise is understood . . . why don’t we have more managers buying into the practice?  One reason is that certain managers lack the skills required to overcome objections. For some, it’s due to the fear factor.

Manager who want to succeed in menu use must prepare, study, rehearse word tracks, and conduct practice interview sessions. Those who decide to ignore these steps won’t be ready to deal head on with the customer’s concerns. Sometimes, when the deal comes into finance from the sales department, the customer has not been told the exact monthly payment or even what they agreed to pay for the vehicle. Some stores still have no buyer’s agreement signed by the sales manager or customer before the deal comes into the finance office. It’s up to the finance manager to disclose this significant information.

This may sound absurd to some reading this blog, but the truth is many stores still support “box” closing. Box closing and menu selling do not go hand-in-hand. Managers who tell me they can effectively box close and utilize a “full disclosure menu selling presentation” increase my anxiety level. The two methods of selling just don’t mix. Time after time, I review menus that aren’t complete—the base payment or the buying numbers have been deleted. I have often reviewed menus where the finance manager has deleted the disclosure terms. This is a dealer-controlled sales procedure, but for the record, we should call it what it is, option selling, box closing and step selling. The idea behind full disclosure menu selling is that the customer knows the base payment, the APR, the term, and all the buying numbers prior to the negotiation of products. This has always been important . . . but after two years of enormous changes in the car selling industry, it rises to the top of the list. Savvy customers want to be treated with respect and honesty. When they are, they become valuable word-of-mouth advertisers for the dealership and repeat customers.

Full disclosure menu selling works. It’s a great way to increase overall performance without jeopardizing dealership business. It retains customers for life. Menu selling is not just about the finance department. Menu selling is a “culture”. . . a belief. The store must support full disclosure selling from the sales person on the lot to the sales management and everyone in the business office. To pretend that compliance begins in finance is a foolish practice. Having every manager on the same page with the same message will increase profits significantly, while keeping the customer coming back time after time.   You don’t have to break laws to break records!