Last month, I talked about an F&I manager with a year in the business that was stuck at a $400 deal average. Then she added $150 just by learning how to sell her theft product without much reliance on anyone but herself. In other words — she quit making excuses. Now she’s on a slow and steady path to find $800 per copy and once she hits that then she’ll go after more.
After my last trip to her store, she had studied up on her lender programs and all of the products she had available to sell. We took on tire and wheel, since research showed she could pick up a quick $150 on her deal average, because she wasn’t selling many of those. Probably sounds too good to be true, right? Well, I’m happy to say it’s entirely true. And speaking of tire and wheel, from the latest that I’ve unofficially heard, more than 20 percent of dealers don’t bother to sell tire and wheel. Now that doesn’t mean that 80 percent of dealers sell tire and wheel, but that they merely have it available if a customer really wants it.
She had one obstacle to overcome first. Her store only had tire and wheel for street bikes. That’s it! Street bikes. Her current penetration was at 23 percent, but with half of the store’s volume going to ATVs and UTVs, it was easy to see how her penetration next month would be at 46 percent. Right? Yes!!
After she found a provider for the tire and wheel we had to figure out how to sell it, which was pretty easy. Just add it to the menu.
There are two critical pieces of information you need to sell this product consistently: First, we must uncover why the customer needs the product. Second, make sure that your dealership has products available for every unit that you sell.
Many managers subscribe to the “herd theory” in F&I: If we can show the customer that a high percentage of others have chosen to buy this protection, it will make sense to them why they need to buy it as well. Unfortunately, nothing could be further from the truth.
See, it really doesn’t matter to the customer how many others have purchased the product; they just want to know why it makes sense for them. And many customers are completely unaware they have a real need for the product. The best place to start making them aware is by including tires in your explanation of the factory warranty. This will allow you to make the customer aware that the factory warranty only covers defects in parts and workmanship, not damage due to a road hazard.
What is the warranty on the tires in your showroom? Don’t guess, open up the warranty booklet and take a look. There’s usually something in there but its pretty much nothing.
Once you know what your customers need, make sure that you’ve got the products available for every unit sold in your dealership. This dealer who just started selling tire and wheel on most everything in her store (no dirt bikes) and her profit jumped up higher than expected. At the thirty-day mark, she had added another $81 to each deal. This process cost her less than the theft did last month. Just a little research to find a provider, sign up and sell. During her 100 unit months that means she’ll have an extra $8K in her coffers. Like I always learned, if that number sounds unrealistic to you, just cut it in half. How’s $4,000 sound?
Sometimes what we really need is to talk to other managers out there to find out what they might be selling that we’re not and this was one of those cases, but she wasn’t asking.
Don’t overload your dealership up with products just to have them. Make sure that you’ve got everything that you need, and if you’re not sure, then ask someone what you’re missing. You can’t sell it if you don’t have it.
Tommy Ady is a powersports sales expert with more than 25 years in powersports retail business. He founded The WriteBack in 2013, which has become the #1 performing sales tool in the North America. Top 100-ranked dealers use his programs, along with the highest performing F&I managers in the country. His entertaining training shows are broadcast via YouTube to dealers every week.Click here for reuse options!
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