It’s been said that there is infinite difference between mediocrity and superiority. Ask yourself: is your dealership really running as efficiently as you would like it to? If your first reaction to that question is simply that your business has done about as well as expected over the past year, maybe it’s time to re-evaluate your opportunities. Your entire team—from sales to the finance office—are likely expressing your attitude.
So, if you have trouble holding onto good salespeople, if your F&I Manager is performing below the average, if your CSI score is not where it should be or your charge backs are higher than the norm—maybe it’s time to think through your new year resolution?
One of the most common culprits standing in the way of mediocre dealerships achieving superiority is a disconnect between sales and finance, particularly when it comes to compliance. Become your own change master, hone in on F&I compliance to bolster your own expectations and get your dealership on track to propel itself from mediocrity to superiority. Compliance is not a dirty word. A consistent plan often encourages an increase in profits.
Here are some New Year’s resolutions you may want to consider:
1. Resolve to make F&I compliance a priority throughout your dealership. Compliance with every FTC regulation should be strictly enforced and supervised throughout your dealership. F&I online training can bridge the gaps between finance and sales, ensuring all are synchronized working in unison. Consider appointing a compliance officer keep the politics to a limit.
2. Resolve to make menu selling a priority throughout your dealership. Menu selling is not something that begins in the F&I office. Menu Selling is a dealership philosophy, beginning when a customer sets foot on the property and continuing throughout the entire sales process, in both front and backend negotiations. Menu selling is about being upfront keeping your integrity intact from the beginning of the sale to the F&I department. Maximize profits through a consistent presentation that initiates confidence, creditability and accuracy that instills customer resilience. Make sure to present all your products to all your customers all the time not just because it’s best practice because it creates synergy and diminishes prejudging- which has already been proven to increase product sales.
3. Stay completely up-to-date on compliance and regulations. In 2011, the FTC received 77,435 automobile-related complaints about new-car and used-car sales. Staying in compliance and training staff will limit or lessen complaints about your dealership.
Every dealership has had three years to study the Dodd-Frank Reform and Consumer Protection Act, and is responsible for ensuring that every single employee understands the fallout from bad decisions.
If you can’t keep up with the regulations, hire an F&I consultant who will keep you up to date and who will vigorously train and retrain your staff. Don’t turn a blinds eye or say, “this will never happen to me”. Throw your ego’s out the window the 80’s mentality has long left the building.
4. Maintain rigorous control over spiff programs. Evaluate spiff programs that aggressively sell one product over another. A spiff can undermine menu tactics. Your team must understand they cannot purposely confuse or otherwise entice customers to purchase products simply because of a spiff. We know payment packing isn’t the right way to go, no shortcuts in discussing payments and rates, no speaking in F&I “code” that isn’t understood by customers, no presentation of the menu before the base payment, and no hedging on the buying terms of the products regarding APR and term.
5. Resolve to manage your reputation. You may have been able to take your dealership’s reputation for granted in the past with no consequences, but the continued growth of social media networks and online business review sites mean that to continue to do so would be foolishly tempting fate. Everyone touched by your business—from customers to employees, past and present—have the capability of spreading negative comments that could tarnish your company’s reputation and put profitability at risk. These same people can also file an instant complaint with the Consumer Financial Protection Bureau (CFPB), which has made the task easier through email complaint processes and use of a “hot line,” all with promised anonymity. If you haven’t checked out the CFPB website put it on your highest priority list. You might say you have no concerns regarding CFPB but if your bank decides to pull back not do business with you that will put you behind the pack of dealers who can offer better financing arrangements to their customers. To be a leader means to act like a leader.
If you have settled for mediocrity in the past and have set the bar low for yourself and your people, it’s time to take executive-level responsibility seriously. Be visible. Ask questions. Raise expectations.
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