Automotive News - October 17, 2016 - Supplement - S4

4 ❙ OCTOBER 17, 2016 SPONSORED CONTENT BEST PRACTICES IN F&I Optimizing your transparency and your customers' time W " "At a dealership, F&I is typically the last thing a customer does before taking delivery; it's one of the last pieces of the puzzle. But the top-performing dealers have a holistic approach to F&I that starts with the culture of the store." Gabe Garroni, VP-sales, U.S. and Canada for Ally " hen thinking about best practices in F&I, what might automatically come to mind is the customer's experience in a dealership's F&I "box." But experts say doing right by the customer begins long before the F&I contracts are being signed. "When I think about F&I best practices and the most consistently successful dealerships, it starts well before the actual F&I process," says Gabe Garroni, VP-sales, U.S. and Canada for Ally. "At a dealership, F&I is typically the last thing a customer does before taking delivery; it's one of the last pieces of the puzzle. But the top-performing dealers have a holistic approach to F&I that starts with the culture of the store." Steve Hall agrees. Hall is founder and president of driversselect, a Dallasbased dealership that sells 600 cars a month Garroni: Early out of one location, ofproduct info fering customers a "newbuilds trust. car alternative": an inventory limited to what it calls nearly new cars, vehicles one to two years old with less than 29,000 miles. Driversselect targets customers who want cars with newer styling, technology and warranties, and it offers Hall: Instill right prices on average beattitudes, values tween 20 and 40 percent among staff. less than MSRP because of the heavy depreciation in various new-car values. Like his retail model, Hall says his approach to F&I isn't typical. "What works for us is starting internally with our staff, rather than externally with the customer. In order to deliver the best experience in F&I, we have to make sure we have the right culture, including the right values, compensation and sales practices to support it," he says. Driversselect uses a standard F&I process with fixed pricing-no negotiating. The dealership also limits the number of financial products it presents: basic financing, only one type of extended service contract and GAP for those who need it. That simplified approach and limited F&I menu, Hall believes, eliminates much of the discomfort for both employees and customers. "So many dealers negotiate on price, then try to get all their profit back on the F&I," Hall says, by pushing a variety of F&I products at buyers. "The temptation is there to try and generate higher margins, but we have to be disciplined and true to our approach. We've put so much equity into our brand; it takes only one point in a sale to wreck what you've done." The bottom line, he says, is that the driversselect standardized approach "squeezes as much friction out of the F&I process as we can." Want to create the best F&I environment for both employees and customers? Consider these F&I best practices: Start internally Studies routinely show that customers dread the F&I part of their dealership experience. "If a customer wouldn't want to be in your envi- ronment, it can be that your employees don't want to be there either," says Garroni. "The best dealers commit to building a culture in the store that makes F&I a comfortable place to be for both employees and customers. That kind of top-notch environment begins with recruiting, hiring and developing leaders at every position in the store to ensure the appropriate culture is supported." Creating a happy, enthusiastic workforce also depends on creating a consistent work environment, and providing fair compensation and benefit packages. At driversselect, for instance, 80 to 85 percent of employees' pay is salary-based. Not being dependent on commissions gives employees security and confidence in the system, Hall says, which in turn allows them to provide customers with the best F&I experience. "They don't feel they are giving anything up by being transparent with customers," he says. "They aren't holding back information and they're not worried about giving up a deal." continued on next page

Table of Contents for the Digital Edition of Automotive News - October 17, 2016 - Supplement