Wednesday, September 29, 2010

Toyota Dealer bans the F&I Office???

Well, I'm still not sold on this - but I have been hearing a lot about the concept of letting the salesperson complete the transaction from start to finish with a customer. This report is from a sales trainer who I respect - but in this case, don't agree with.

"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?

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 They would rather stick to the status quo and continue to use outdated sales techniques.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"

And look at what happened to Saturn by the way...

AFI's take on this:

I fully agree that the more transparent your sales techniques are - the more money you will make.

I also know that human nature will always take the path of "least resistance".

For example - if a salesperson badly needs his _x_th car to hit a bonus level - and it's the eve of the last day of the month - he or she will give ALL the gross of the car away, work the manager for maximum trade ACV, quote the customer payments at "buy rate" and sell ZERO F&I products.

Prove me wrong.

Some (most) people really can't be good F&I Managers, just like some F&I Managers can't be good Sales Managers. You really don't know until you give it a try.

Like our buddy Obama - imposing his "Grand Experiment" on our country.

I wish Colonial Toyota the best in their experiment and hope it works out.

My opinion is to still have the F&I Manager come out and greet the customers before them coming into the F&I office (building transparency).

F&I Manager: "Hello, congratulations on the purchase of your new vehicle.

My name is _______ and I am the business manager here at _______. My job is to take care of all the legal issues such as your title work and registration, as well as go over the mandatory disclosures related to your purchase.

The process will normally take about 20-25 minutes. To help expedite the process, I have a few questions to ask before I can prepare your paperwork. Can we sit and review those now?

This will lead into the interview. (a good topic for a future post).

Next topic: GAP Objection Handling

Back to the AFI Today homepage

1 comment:

Marv Eleazer said...

Who was it at the F&I Conference that was crowing about his company's own "Grand Experiment" trying to create hybrid sales/F&I employees? Uh-let me think now *scratching head* oh, now I remember, Kevin Westfall.

I gotta say a lead balloon will fly higher than this thing will. I didn't read any F&I comparisons since this process has been adopted by Colonial only that "Customers are buying and liking the upfront honesty projected by the staff" The trainer certainly means well and I dearly love her by the way, but until I see this practice in action with proven stats over a 2 year course I'll oppose it.

Marv Eleazer

Failure is only the opportunity to begin again more intelligently.
-Henry Ford, Automobile Manufacturer