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Who should sell F&I?

Dealerships have to find the right staff members for the department to prosper

By Liz Hochstedler
Associate Editor

F&I can be a profit center for a dealership, whether it’s a standalone department or an offshoot of the sales department. Yet many dealerships struggle with F&I because they don’t know how to properly staff it.

The ideal F&I staffer can significantly increase sales, but many dealers use their lack of knowledge about the department as an excuse to not properly staff it. Fortunately, for dealers big and small, F&I sales can contribute to the bottom line if a few considerations are made. Dealers should ask:

Who should staff F&I?

If a full department is needed, what qualities make an ideal F&I employee?
What training should be provided to F&I personnel?

Who should work F&I?
Any dealership that has a large volume of sales should have a department that solely focuses on finance and insurance sales.

“There are multiple reasons for this,” said Troy Billen, assistant vice president of sales for McGraw Powersports Group. “Your finance department fosters relationships with your finance companies, your service contract companies and other aftermarket companies. They will know the products inside and out. They know how to overcome objections and be able to take the time to explain the features of the products, the advantages of having the product and the benefits to the customer. And they don’t have to rush off and greet the next customer walking through the door, answer phone calls for curious customers or write the next service order. They are able to concentrate on the customer in front of them and the needs of that customer.”

Typically, larger, successful dealers have a dedicated F&I employee, says Brian Weaver, vice president of sales for McGraw Powersports Group. But each dealership has to do determine if an F&I staffer generates profit for the dealership. For some, if an F&I staffer can generate an average of $500 per unit, that employee will effectively pay for himself or herself. Other dealerships might need that person to earn $1,000 in F&I per unit. And others can afford a variety of performance numbers because most F&I employees work on commission, so if they don’t sell, the dealership won’t have to pay them.

“You’d have to number crunch and look at it,” said Peter Jones, director of business development at Galt Enterprises.
For dealerships owners who find they cannot afford an extra staffer, F&I should still be sold, but it will have to be done by someone already working at the dealership. For some, the ideal candidate would be the operations manager, and for others it would be the sales manager. Many dealerships ask their sales staff to sell F&I.

“I think it makes sense for it to be management,” said Sarah Weaver, dealership/affinity marketing manager for Dairyland Cycle Insurance.

Billen, a former F&I manager himself, says all dealership personnel should be trained on F&I in case the dealership cannot afford an F&I person or the dedicated staffer takes time off. But F&I should have a point person as well.
Jones says the F&I department leader isn’t a sales manager in most dealerships.

“It’s very difficult for someone to be a sales manager and then an F&I manager because it’s challenging to make money both in the front and the back, and it’s rarely seen as successful,” he warns.

But sales staff members can successfully sell F&I if they aren’t afraid of losing the sale.

“I don’t think it’s a legitimate fear. I’ll be blunt here — I think it’s an excuse,” Billen said.

If a salesperson has the proper technique when marketing the vehicle as well as when they’re offering F&I, they shouldn’t lose the sale. As Brian Weaver explains, in all other situations when adds-ons are offered, customers usually don’t turn down a sale. For example, if a man were to buy a button-down shirt at a department store, he wouldn’t turn down the sale of the shirt if the associate offered a tie at the point of sale.

“If you don’t offer F&I, one thing’s for certain — you’re not going to sell it,” Weaver said.

The key to a salesperson’s F&I pitch is timing. A salesperson shouldn’t present F&I until after the unit sale is closed to further prevent the unit sale from being affected by the offering of ancillary products.

“You want to make sure you present the products at the right time,” Brian Weaver said.
For the most part, Billen says, F&I products can be soft sold. Even with a soft sell, dealerships can expect about 20 percent penetration.

Personal qualities
What’s more important than which position will cover the F&I department? The personal characteristics of the staffer selling the products.

“It depends on the personality of the person. It has to be someone who is not afraid to sell, is not afraid to ask for the order and is not afraid to overcome obstacles,” Jones said.

Some candidates might be too analytical and not good at sales. A salesperson might be great at making the pitch but awful at the paperwork that must be filed.

“He has to be personable, have a good personality and be a good salesperson,” Billen said.

Jones suggests that salespeople, if not selling F&I themselves, prep customers for the F&I presentation by mentioning the products before the customer is led to F&I. Also, F&I personnel should exit their office to greet customers, rather than waiting for the customers to come to them.

“It’s more important what happens prior to that customer coming in there, so a lot depends on the dealer’s sales process,” Jones said. “The customer should be turned over with at least seeds planted.”

After the F&I staffer meets with the customer — if he or she wasn’t the one to make the sale — a reputation must be built with the customer. During that time, the customer’s needs should be laid out. After making the pitch, the F&I staffer is tasked with overcoming objections, which plays into the staffer’s confrontation skills.

“I always recommend that they first get all the objections out on the table before they handle them, and that’s to avoid a ping pong match,” Jones advised.

If all objections are heard at once, it’s possible more than one can be handled at the same time, and minor issues can possibly be ignored.

“The entire process, from beginning to end, is equally important,” Jones said.

Each person handling F&I, whether they’re dedicated members of a department or team members from other department, needs to undergo training.

“Finding your style of selling is important,” Billen said. “Being educated on the products and being able to overcome those objections are essential in being comfortable in the finance office. You will find different things will work with different customers. This is no different than on the sales floor. Go to conferences, take training seminars, read books and listen to other people, your rep and people in other dealerships find out what they were encountering. Get as much information as you can get and keep learning.”

Jones recommends F&I personnel attend online training and webinars frequently to continue learning, but he also advises that those employees attend on-site training at one event or facility at least once per year.

“You always pick up something new. If you pick up one nugget, then it’s worthwhile,” he said.

To sell insurance, at least one staffer at each dealership has to have a property and casualty insurance license. Sarah Weaver recommends this employee be a seasoned veteran that will not likely be leaving the dealership. The license required about 40 hours of classroom or Internet education and a test.

“Overall, on average, it takes about a week of time to actually prepare for the test,” she said.

In most states, the class costs $100-$250 per person, and the state-run test costs about $100. A the licensed employee can then work at the dealership but needs to become an agent of an insurance company to sell insurance and keep the license active. Continuing education is also usually required every two years in most states. But Weaver says the effort has proven effective for many dealerships, as those who work in states that require insurance for vehicles can have their customers drive straight off the lot. Also, many financing companies require proof of insurance before they finance a unit.

“The ones who have done it and have done it successfully have really added insurance into their menu,” she said. “Those who have never seen the revenue may not know it’s OK to go ahead.”

Dealers should be mindful of who is selling their F&I and how they’re trained.

“By not concentrating on these products,” Billen said, “you’re leaving money on the table, and your dealership is losing tens of thousands of dollars in profit a year.”

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