As automotive sales numbers continue to soften, business managers need a new approach to closing more deals.
With today’s soft vehicle sales market, advances in technology and changing consumer behaviour, finance managers might want to think about upgrading their training.
“We’re very busy,” says Ron Reahard, F&I trainer and President of Reahard and Associates. “When business slows down, dealers definitely need the additional revenue that the F&I department can generate. And when it’s slow, F&I managers also have time to do training.”
In particular, F&I managers need to brush up on product technology. “The business evolves and cars change,” says Reahard. “Technology changes, and regulations change. If you’re going to sell service contracts, you need to know something about cars.”
Paint-less dent repair
A sales pitch won’t sell a product. “Consumers will pay good money for someone who can add value to their purchase experience, someone who can answer their questions, educate and inform them,” says Reahard.
It stands to reason that if a finance manager wants to sell paint-less dent repair, they need to understand metal memory and why paint-less dent repair is the preferred way to repair body damage. And if they want to sell environmental protection, they need to know what thermoset enamel is, how cars are painted today.
“If you’re going to sell tire and wheel road hazard, you better know what the aspect ratio of a tire is, and why that is so important,” explains Reahard. “As the finance manager, you should be bringing value to the equation, not making people listen to a sales pitch.”
Consumers don’t understand how advanced technologies have impacted virtually everything on a car. “It’s not that you have more problems, but when you do, they’re a lot more expensive to deal with,” says Reahard. “You don’t fix anything. The trend is to replace, not repair. On my latest vehicle, they don’t even turn the brake rotors any more, they throw them away.”
Not their first rodeo
So the days of feature advantage benefit presentations in the finance office are over. “This is not their first rodeo unless they’re a first-time buyer,” says Reahard. “Everyone knows what a service contract is. The way you present contracts has to change.”
One of the focuses in training is creating customer interest. “That’s a real change for a lot of finance managers,” says Reahard. “In our experience, if today’s consumer feels that you’re trying to help them, they’re very interested in what you have to say. If they feel you’re trying to sell them, they couldn’t care less. A friend of mine calls it ‘commission breath.’”
Consumers depend on the Internet to research their purchases. “It never ceases to amaze me that when somebody can find something on the Internet, it’s true.” So Reahard has worked with OEMs to create a consumer website, to which finance people can take their customers. “If you’re buying a new Honda, you can see the warranty in action on the website, as well as what’s not covered, like tires. It’s a big change for finance managers to use the Internet, to give themselves third-party credibility.”
Robert Sevigny, VP of National Sales, LGM Financial Services Inc., notes that consumers are more informed today than they ever were, and that’s only going to increase. “Managers need act as advisors to consumers,” he says. “The consumer has to feel that they are purchasing products that answer their needs—not a cookie-cutter approach where everybody gets the same product. It needs to feel tailor made.”
Although Canada does not have regulators like the United States, there are still regulatory bodies that set the rules, like OMVIC in Ontario, AMF in Quebec, FICOM in British Columbia, etc. “Regulators are more and more active, they want to make sure that consumers understand what they’re buying,” says Sevigny. “People need to understand. They need to have everything explained carefully, and have support documentation of what they’ve purchased.”
Regulators can do spot checks. “Products need to meet guidelines,” says Sevigny. “It’s important for F&I managers to be up to date on what changes have been made, and what the current regulations are.”
He emphasizes that training is not an event, it’s a process. LGM recently released a learning management software to track which financial managers have followed a certain training program, and how they scored. “If you know your FSM has the product knowledge, understands the process, it’s certainly a step in the right direction,” says Sevigny.
Sevigny feels the industry has been slow to adapt to change, but can’t keep postponing their response. “Change is going to come at a faster rate than ever before,” he says. “We need to be able to adjust on a dime. And because the speed of change is increasing, training becomes more and more important.”