Today’s car shoppers are deeply concerned about affordability, more informed than ever before about the finance and insurance (F&I) options available, are less willing to spend time dealing with paperwork, expect a personalized sales experience and are willing to walk away from a long-time business relationship if they’re not happy with how they’re treated. When your customers measure their dealership experience, the time they spend on F&I decisions and paperwork can make or break your customer satisfaction index (CSI).
F&I is a critical component of dealership revenues and profits. According to NADA data, the F&I process generates about a quarter of dealerships’ gross profit across new and used vehicle sales. Roughly nine out of every 10 new-vehicle purchases involve F&I, with more than 45 percent including a service contract.
This means there’s more pressure on your dealership’s F&I team to get things right.
Fortunately, there are 3 steps your dealership can take to make F&I more valuable both for your business and your customers. In this blog, Mastermind discusses:
1. Why Customers Care About the F&I Experience
We’ve written before about the overall state of F&I in the auto industry, but it bears repeating: Financing has always been a pain point for consumers, but the evolving nature of sticker prices and financing products means affordability now tops auto shoppers’ concerns.
This is the practical reason customers care about F&I as a component of their car buying experience. The other reason customers care is because it’s their least favorite part of the process of buying a car. The reasons customers dislike dealerships’ F&I experience range from it being cumbersome to the embarrassment of having to discuss personal finances with a stranger to the ever-present fear they’re getting ripped off.
For dealers committed to building a culture driven by customer experience, F&I must be a focal point of the overall customer experience strategy. This includes not only employee training and feedback processes, but also ensuring your team has the right information and tools at hand to make the experience as fast and frictionless as possible.
2. Why the F&I Department Matters
According to FICO, 46 percent of U.S. consumers ranked “one-stop shopping” as the #1 factor for choosing dealership financing. To meet buyer expectations, dealers need to ensure their F&I process is as efficient and convenient as possible. Failure to do so risks the entire sale.
For one in six customers in the U.S., just one bad experience is enough to get them to stop doing business with a company they’d previously been happy with. In the dealership environment, this means you can’t even take loyalty customers for granted when it comes to their F&I experience.
Among other factors, that means paying attention to not only what’s being sold, but how your team is selling it. For instance, one traditional sales model that drives many F&I rooms is what’s known as the “300%” rule of selling 100 percent of your products to 100 percent of your customers, 100 percent of the time. That may have worked in a time when the salesperson was the primary – if not only – source of information for the consumer on F&I options, but it’s not an effective model for today’s Internet-first consumer.
In an era where the federal government has websites warning against credit life insurance products, F&I teams need to take a more personalized approach to which customers are open to being presented with the full suite of potential products and which have come into the dealership knowing what they want and just want to get the paperwork done.
In conjunction with this, many dealers focus on constantly increasing how much of the F&I process they can accomplish before the customer ever arrives. If your dealership has committed to predictive marketing powered by an automotive sales platform such as Market EyeQ, much of the “homework” has already been done, since the analytic-driven personalized offers that brought the customer in the door are the basis for any F&I discussions.
Market EyeQ’s insights into your prospects and customers – powered by data from IHS Markit, CARFAX, TransUnion and more – give F&I teams a starting point for building an attractive set of offers, products and terms that fit the customer’s individual wants and needs. Market EyeQ’s insights eliminate the need to try to sell everything, allowing the F&I team to focus on selling the most appropriate products and delivering an excellent customer experience.
3. Improving the Relationship Between Sales & Finance
One major opportunity for improvement in the F&I customer experience is to simplify and refine the handoff between sales and finance. Some dealers are improving the sales and finance relationship by making the showroom salesperson the primary touchpoint for F&I services, but there’s a growing consensus the training requirements alone for the two roles make this an extremely challenging model to do correctly.
Instead of loading showroom sales teams with additional responsibilities, a more sustainable option of reducing the disconnect for customers between sales and financing is to base both processes on a sales platform like Market EyeQ that ensures everyone is working from the same information and insights about the customer. With these dealership data mining tools in hand, your F&I team can start with the right marketing offer, minimize the paperwork and time involved and improve your customers’ experience in their least favorite part of your dealership.
Are you looking for ways to improve your customers’ F&I experience without sacrificing your dealership’s bottom line? Contact us today for a demonstration of how Market EyeQ can help.