The rise of digital automotive retailing has changed the F&I game

The automotive industry has come a long way since the days of customers walking onto the lot and spending hours perusing the showroom floor. The rise of digital automotive retailing has changed the game, allowing customers to complete their entire shopping journey online, from the comfort of their own home. With the arrival of the pandemic, the industry had to move quickly to adapt. With this, we have started seeing digital retailing mandates coming directly from OEMs.

Why the push for digital retailing? It’s simple—customer satisfaction creates loyalty. Fully integrated digital retailing solutions, that include the ability for a customer to review and pick their own F&I products, not only improves the customer’s buying journey but also increases dealership sales and gross profit.

A study published in the Journey of Interactive Marketing in 2020 found that when customers were provided with detailed product information and the ability to self-select F&I products, they were more likely to make a purchase and had higher levels of satisfaction with those purchases.¹

According to the 2020 Cox Automotive Digitization of End-to-End Retail Study, the number of shoppers buying F&I products online is also increasing. In fact, 61 per cent of customers who purchased a vehicle online also purchased at least one F&I product online. The study also found that customers who shop online express more interest in F&I products than those who shop in person. For example, customers who used a digital retailing tool to purchase a vehicle expressed interest in an average of 2.5 products, compared to 1.2 products for those who purchased in person.²

Moreover, dealerships that offer digital retailing tools have seen a significant increase in gross revenue. The study found that dealerships that offer a fully integrated digital retailing solution saw an average gross profit increase of $360 per new vehicle sold and $260 per used vehicle sold. This is in addition to the profit center created by the inclusion of F&I products.

Beyond the financial benefits, offering digital retailing solutions that include F&I products can also improve customer retention in the service department. When customers purchase extended warranty they are more likely to return to the dealership for service and maintenance, rather than taking their vehicle elsewhere. In fact, the study by Cox Automotive found that 62 per cent of customers who purchased extended warranties returned to the dealership for service compared to just 32 per cent of customers who did not purchase extended warranty.

The benefits of digital retailing that includes F&I products are clear, and so as the Canadian market continues to evolve, we’re seeing full F&I integrations being developed. It is important for dealerships to embrace these solutions as they become available to fully capitalize on these sales opportunities.

Another exciting development in the automotive retailing space is the emergence of pre-qualification tools for customers. These tools allow customers to learn about their vehicle affordability before even selecting a vehicle, similar to getting pre-approved for a mortgage. This information can help customers make more informed decisions about their purchase to avoid the disappointment of falling in love with a vehicle that is outside of their budget.

Including F&I products up front not only helps manage customer payment expectations but also allows dealers to have two chances at selling F&I products. The customer can choose to add their own F&I products online, or if they opt-out, the dealer has another chance to sell them on the F&I turnover.

The next generation of prequalification tools will take this even further by not only telling a customer what they can afford but also providing a list of vehicles that match their budget and financing options, including F&I products. This will not only improve the customer experience but also help dealerships close more sales and increase gross revenue by presenting customers with vehicles they are more likely to purchase with greater potential for profit.

Digital retailing is not a fleeting trend in the automotive industry. It has become a necessary part of the customer buying journey and it’s time to hop on the digital bandwagon.

Citations:

1. DeBellis, J.M., & Etgar, M. (2020). Self-selection of add-on products: A laboratory experiment on framing effects. Journal of Interactive Marketing, 51, 107-120. https://journals.sagepub.com/doi/full/10.1016/j.intmar.2020.03.001
2.  Cox Automotive. (2020). Digitization of end-to-end retail study. Retrieved from https://www.coxautoinc.com/wp-content/uploads/2021/01/2020-Digitization-of-End-to-End-Retail-Study-FINAL.pdf

The post Taking F&I out of the box appeared first on Canadian Auto Dealer.

Gross profits are up and floor plan interest is low; some areas of your financial statement have never looked better.

There is a level of uncertainty in the automotive industry today.

The vehicle supply chain is broken and will take months to repair. Retailers are dealing with a hungry customer base, while sitting on virtually empty car lots. Manufacturers are demanding higher sales volumes and providing little remedy to inventory shortages. Owners expect results. Your dealership profitability must grow, and excuses fall on deaf ears.

It’s really tough these days. Just when things were starting to normalize, the auto industry threw us another curve ball.

Despite all the negativity in the air, this unprecedented supply shortage is offering dealers a ray of positive light. There are areas of your financial statement that have never looked so good.

It’s true, dealers are financially healthier today. More fiscally responsible and better managed. Today’s “challenges” are helping dealers be better organizations. Here are a few examples:

Gross profits are through the roof

In microeconomics, the law of supply and demand describes the relationship between the quantity of a commodity available for sale and the prices they can be sold for. When supply chains are operating normally, prices will naturally settle at an equilibrium point and the economy will run efficiently.

The current inventory shortage we are facing is breaking this fundamental formula of modern economics. With little inventory available, dealers can effectively sell cars for whatever price they want.

There are areas of your financial statement that have never looked so good.

For this first time ever, dealers seem to be in the driver’s seat of this transaction. There is little negotiation. Dealers are “walking customers.” Sales staff are fighting over inventory allocations. Cars are effectively sold before they even get off the truck.

This is resulting in the highest gross profit per unit month the industry has ever seen. According to NADA, in June 2021, the average new car generated $3,336 in gross profit (8.3%) vs $2,098 in 2020 (5.5%). As a whole, the new vehicle department, including F&I, added 32% margin vs. 23.5% in the same month last year.

Used car averages were just as strong, generating 14% gross profit in June 2021 vs. 11.4% in 2020. Each used car is averaging gross profit of $3,429 per unit and netting $1,083. Used-to-new ratios are through the roof too, approaching 90% throughout the summer.

I fully expect this trend to continue. I think it’s great! Variable operations are finally starting to look lucrative again. Maybe we should focus on building bigger showrooms?

Floor plan interest is practically nothing

The real losers of the inventory shortages are the big banks. For the first time in my career, floor plan interest costs are negligible on dealer statements. And with most OEMs offering floor plan credits to their network, dealers are basically making money in this area. It’s unprecedented!

The average dealer is holding less than 50% of the inventory they need to meet market demands. To be clear, historically, a typical dealership holds a two month supply of vehicle inventory at any given time. Today, they are lucky to meet the four-week mark. There are dealers in rural markets with less than 10 new units sitting in their lot.

Imagine that, a car dealership with nothing but tumbleweeds rolling across their property. This scary visualization is the reality of the industry in the summer of 2021.

Interest rates continue to be at an all-time low. In August 2021, the Canadian prime lending rate sat at 2.45%. In June 2000, this same rate was 7.5% per annum. Lending institutions are basically giving money for free.

This, coupled with dealers’ lack of inventory, is resulting in major cost savings in variable expenses. It’s a beautiful thing: in these hard times, dealers have accidentally figured out a way to win this chess game.

This industry continues to surprise me. Sometimes it has a cruel sense of humour, giving you the thing you want most at the worst possible time. You just have to laugh at the irony. However, remember that success in automotive retail comes from resilience, fluidity, and of course entrepreneurialism.

Stay focused. Stay positive. Find momentum. This too shall pass. Before you know it, your lots will be overflowing with inventory, you’ll be discounting cars to win business, and your borrowing costs will inevitably increase again.

The post The hidden benefit of the supply shortage appeared first on Canadian Auto Dealer.

It’s been drilled into dealers’ heads that customer service, not price, can help differentiate between competitors. The same holds true for lender partners who work with new car dealerships.

J.D. Power’s 2015 Canadian Dealer Financing Satisfaction Study measures dealer satisfaction in 1,300 new car dealerships based on nearly 6,300 finance providers, including captive and non-captive.

For those unfamiliar with the study, the responses are compiled into an overall satisfaction Index Score Ranking out of a possible 1,000 points. Satisfaction is measured in four segments: prime retail credit, retail leasing, floor planning and non-prime retail credit.

This year’s results continue on last year’s trend. But there’s a lot F&I managers can learn from this study, especially since it has Canadian data.

The most satisfied dealers work with lenders who focused on providing a personalized service and a high level of support. That tended to result in more satisfied dealers (with a score of 943) than those who did not (who scored 744).

“Support” in the study includes helping dealers understand their lending options, how they can maximize profits, reduce expenses and retain customers.

Not at all surprising, dealers also crave speedy contract funding in the application and approval process, along with the underwriter personnel in place to facilitate credit approvals. Anything to help business managers speed up and help alleviate some of the paperwork — a huge pain point in the F&I process — and cut down on customer wait times.

Dealers also preferred having a central point of contact in underwriting, whether an individual or a team, than no dedicated support.

This helped boost satisfaction by about 81 points in the prime retail credit segment and 76 in the non-prime retail credit segment.

In fact, the study revealed nearly one-third of the dealers are willing to pay a roughly 0.70-basis-point premium for an “enhanced” service and financing experience.

That just goes to show that offering the lowest price isn’t enough to satisfy a customer and beat out the competition.
But lenders are already aware of this. This survey has been released for 17 years. So what differentiates lenders from the rest?
Mike Buckingham, senior director of the automotive finance practice at J.D. Power, acknowledged both captive and non-captive finance providers are doing well with their sales teams.

“When we talk to the lenders out there, everyone is focused on improving the dealer experience. Clearly they know it’s a very competitive marketplace out there,” said Buckingham.

But he added, “Where we see some of the lenders going to the next level is really building a business partnership with the dealer. Trying to help dealers maximize profits and retain customers — those are really marks of the higher performing lenders.”
For a second consecutive year, BMW Financial Services came out on top with a score of 936 points — the highest dealer satisfaction in the prime retail credit segment.

Runner-up Mercedes-Benz Financial Services was not far behind at 920 points and then Honda Financial Service firmed up third at 895.

Note all three are captives, with good systems, good processes and strong and long-standing relationships with dealers.

Years ago, post-recession, pricing was higher and there were more restrictions on underwriting, said Buckingham.

Today, the market is strong, the credit risk is generally low (even despite creeping debt levels) and the cost of funds is low. Today, it’s all about having that collaborative relationship between lenders and dealers.

That’s why captive finance arms like GM Financial are aiming for speedier service and happy customers. Earlier in May, Automotive News reported GM Financial is working with its dealer partners to take the reigns on some of the F&I process as part of its efforts to become a full-line captive finance provider.

To win the sale and satisfy or retain customers, F&I managers need to work with their sales team and help provide their expertise on how to close deals. That way, everyone wins.

The post Customer service always wins appeared first on Canadian Auto Dealer.

Sometimes small gestures can make a big difference in customer experience. Especially when that customer is deciding on a big purchase for the first time — like buying a new car.

Now that Millennials, born between the early 1980s and early 2000s, are jumping into the car market, dealers need to find ways to cater to this unique demographic. After all, Millennials do make up one of the fastest growing segments in new vehicle sales.

It’s up to the F&I manager to ensure these young buyers can not only afford their new vehicles, but also understand their potential needs down the road.

Think about a first time Millennial car buyer. The entire car buying experience is likely going to be overwhelming, despite all of the research that Millennial has done.

Your F&I office is probably even more of a mystery. But you can make the process more comfortable for that young buyer.

A good friend of mine shared her recent car buying experience. It was the first time she had purchased a new vehicle from a franchised dealership, and she didn’t leave out a single detail.

Besides raving about her new Hyundai Elantra and all of its features — and low monthly payment — she also had kind words for the dealership staff who helped her with the transaction. Paul, an F&I manager, was one of them.

Make the experience more personal and less like a process. Get to know your Millennial clients. Show them products you think they might need — and can afford — based on their driving habits, instead of the generic list of products you have available.

It wasn’t about speedy service or state-of-the-art technologies that led to her great F&I experience. It was more about the ways Paul made her feel at ease about her big purchase.

After learning that her birthday was coming up in a couple of days, Paul presented a $100 birthday credit to help celebrate her new purchase. He told her to treat herself to a nice meal.

To her, it was an incredibly thoughtful gesture. Paul later told me it was actually the first time he had done that for a client, but he wanted to make her feel like part of the dealership’s family.

It didn’t stop there. She also walked away with a tire and rims package after learning how an extra few dollars could help her save money on costly repairs down the road.

She also felt peace of mind knowing she could contact Paul on his cell phone after business hours if she had any more questions about her vehicle, or if she wanted some advice.

Not once in the entire car buying process did she feel like she was being taken advantage of. And that’s why she awarded the dealership 100 per cent on the Hyundai customer satisfaction survey.

Small things, big difference.

PAUL’S TIPS:

Here’s how you can appeal to your Millennial clients:

• Explain how graduates and first time buyers can find ways to save money on their car insurance.

• For any Millennials going through the process alone, recommend they consult their parents or family members who have experienced purchasing a new vehicle before making a decision. This shows the clients that you have their best interests in mind and are on their side.

• Millennials are often impulsive buyers who are always looking to load up on technologies and features. Present them with the benefits of the products and solutions they find interesting, and then ask them to mull over the information on their own time. Give them the space to conduct research and make their own decisions.

• Make the experience more personal and less like a process. Get to know your Millennial clients. Show them products you think they might need — and can afford — based on their driving habits, instead of the generic list of products you have available.

The post Millennial matters appeared first on Canadian Auto Dealer.

No one likes looking at a cluttered website.

An abundance of text and headings with multiple drop down menus are bound to give the user a headache.

But there’s one heading that’s noticeably absent from many Canadian franchised dealer websites: F&I product offerings.

For F&I managers, that could mean lost sales and potential profitability.

That’s according to a recent F&I study by MakeMyDeal, a Cox Automotive company that created a communication platform in which consumers and dealers can negotiate a purchase deal online.

Of the 500 car buyers surveyed in September 2014, eight in 10 respondents would prefer to learn about F&I products online and on their own time before they enter a dealership.

The majority of consumers are more open to hearing about products from an F&I manager after they have a better understanding of them, according to the survey.

Amongst the findings, 63 per cent of consumers would be more likely to buy F&I products if they could learn about them on their own before finalizing their vehicle purchase.

Consumers have spoken. They want to take matters in their own hands, rather than being ambushed and overloaded with product information during the sales process.

It’s clear the F&I buying process needs to move into the 21st century. So what’s preventing dealers from making that transition?

To get a better idea, I spoke with Mike Burgiss, the founder and vice-president of MakeMyDeal, and the driving force behind the survey.

Burgiss says dealers are worried about losing control, and that’s what’s keeping them from moving their F&I products into the digital age.

“Information is a form of control, and the notion of giving up information feels like loss of control of the deal structure,” he says.
Burgiss advocates providing the F&I information to the consumer, without turning it into an Amazon-like transaction.

Not everyone would agree with Burgiss. It’s no secret car buyers aren’t the biggest fans of dealerships and the whole car buying experience.

Accenture’s latest study revealed three quarters of car buyers would like to see the entire car buying process moved online, including financing, if it were possible.

AutoNation has recognized those changes to public sentiment, and is investing heavily into its e-commerce initiatives. Now that the new vehicle retailer has become a household name, it’s even launched its own private-label F&I products (a whole other initiative) and plans to sell the entire line of products online by 2016.

But what MakeMyDeal wants to do through its beta product is provide consumers with the information they need about F&I products to make an informed decision, says Burgiss.

This includes a realistic monthly payment set by the dealership that incorporates the costs associated with the car sale, along with the F&I products by coverage level.

Having the product information online also makes for a better conversation, as opposed to a consumer passively listening to an F&I manager rattle off a list of products.

The online education approach is in no way a threat to an F&I manager’s role. In fact, Burgiss strongly believes the Internet will only help F&I managers speed up the process and take away some of that pressure to sell.

“Car dealerships are fearful that the Internet will become a robot. Robots replace people. The Internet is not a robot. The Internet is a power tool. All it does is speed things up,” says Burgiss.

Though Burgiss is not advocating for an online transaction process, dealer websites can still look to e-commerce driven sites, like Amazon, to learn how to showcase their F&I products. Online shopping sites include product descriptions, spec sheets, images and videos.

I came across a popular Toyota dealership in Toronto that features its F&I product information online in a smart and creative way.

The F&I product landing page shows a diagram of a car with the various protection products and kits that the dealership offers.

When you click on the more detailed product sections, you’re taken to a page that has short, punchy descriptions of the product, along with a brief minute long video of each one.

This is a simple and effective way to educate consumers about your F&I products, without the sales pressure.

Why not give this a try and see if it works for your dealership?

The post Make the shift appeared first on Canadian Auto Dealer.

Canadian dealers have been a doing a tremendous job of growing their F&I sales.

Data from Dennis DesRosiers of DesRosiers Automotive consultants shows that Canadian dealers made a total of $1.5 billion from insurance/warranty/other products in 2013, although there is no way to determine the breakdown between the revenue generated from new and used vehicles.

But how much attention do F&I managers pay to their used car buyers, who are also looking to purchase additional insurance and protection products?

Looking at the current automotive marketplace, they could well be missing out on lots of opportunity.

According to data from DesRosiers, there were 2.72 million used vehicles sold in Canada in 2014. That accounted for 59.6 per cent of the total new and used vehicle sales that year.

In a presentation on Canadian automotive market insights and trends at the recent AudaVision 2015 conference held in Toronto, DesRosiers talked about the “mountain of older vehicles,” in the marketplace that are good quality.

DesRosiers said the vehicle survival rate is doubling and added, “now that 10-15 year old vehicles are affordable and built with high quality, consumers are embracing ownership of older vehicles.”

He also said dealers are positioned perfectly to capture more used vehicle sales, and that includes revenue in the business office as well.

Dealers are also aware of the growing number of subprime customers who are more likely to finance a used car than a new one. These customers are becoming increasingly important and require skilled salespeople and F&I managers to deal with them.

OEMs are also jumping on the F&I opportunities in the used vehicle market by offering some valuable products as part of their certified pre-owned (CPO) programs, said Luc Samson, Vice-President of Sales and Administration at iA-SAL.

The thinking being that by offering a used car buyer a good F&I experience, he or she might be tempted to buy a brand new vehicle when the time comes to trade it in.

Samson said in his experience, the average gross profit per unit is often higher on used vehicles than on new ones. That’s even the case after factoring in administrative costs and other fees.

There are lots of product offerings for used car buyers in the marketplace that dealers find quite popular, including extended warranty, creditor insurance and Guaranteed Asset Protection (GAP) insurance.

These products tend to have high penetration, making them appealing to a business office manager once they’ve delivered the finance acceptance for the customer.

There’s even a high demand for appearance protection products for used car buyers, said Samson.

He said a buyer who has just purchased a $13,000 used car might still want to protect their investment and get undercoating or paint protection in the same way a $30,000 new car buyer would.

Let’s face it: a used car buyer is going to tell their friends, “Hey, check out the new vehicle I just bought!”

Ned Calija is the used car manager at Hyundai Mississauga. He’s noticed over the last few years that used car operations have grown considerably at his dealership, and it now sells one used vehicle to three new ones.

There’s especially a big demand at his dealership for vehicles that are gently used and only a year or two old, said Calija.

Calija said about 60 per cent of the used car buyers will purchase an extended warranty on their vehicles at his dealership.

He can recall many times when an extended warranty was a bonus for a used car buyer. One customer ended up with a malfunctioning alternator just three days after purchasing the vehicle, and was happy to have an extended warranty on the vehicle.

Based on all of the market conditions and the number of products out there, there’s no shortage of opportunities for business office managers to generate money from used car buyers.

But after speaking with Samson and Calija, it’s important the business office comes up with products and packages that suit individual used
car customers.

They should also consider the term for which the customer is financing the vehicle.

Samson said when dealing with a subprime customer, the dealership will want to trade in that vehicle within the next 24 or 36 months, instead of waiting for the duration of the term, and resell them another vehicle at a lower rate.

That means adjusting the protection base on the terms of the vehicle if they end up wanting to trade in the car, so the balloon payment is not too high.

Viewing and treating used car customers no differently than your used car buyers will help your team generate more F&I business opportunities.

The post Missing the mark appeared first on Canadian Auto Dealer.

CONSUMERS ARE WELL ARMED with information when they walk into the dealership to “validate their research” and select their model.

We’ve written a lot about how salespeople are transforming into product advisors and sales consultants, as the balance of power in the vehicle knowledge game has tipped towards the consumers.

This has all resulted in more self assured buyers, which actually is a good thing — that is until they wade into the unfamiliar territory of the F&I office.

When car buyers enter the F&I office, many don’t know what to expect next. Even for experienced car buyers, the processes and offerings vary greatly by dealerships and are constantly evolving.

“The part of the process where the brakes get put on is generally at the F&I office,” says David Wilke, Manager, National Training, at LGM — a provider of finance and insurance products in the automotive industry.

Wilke doesn’t believe that there’s a lack of process in place. F&I managers can recite their process on command. And it’s not that they aren’t showing the customers their paperwork or swivelling their screens around to verify things like monthly payments and trade numbers.

The problem is that F&I managers are not allowing customers to drive that part of the process.

A “PUSH” OR “PULL” APPROACH
The breakdown between customer and F&I manager usually happens when there’s a lack of communication about the direction of the conversation.

The F&I manager knows there’s some paperwork that needs to be filled out, some products to present and some questions to ask the customer.

The customer knows that an interaction with an F&I manager is about to take place. But the customer doesn’t necessarily know what that conversation entails.

I spoke with Wilke to get a sense of the kinds of current conversations going on in F&I offices. He trains F&I managers through courses offered by LGM’s national PowerTrain program.

What Wilke often sees is F&I managers “pushing” the conversation with the customer.

That’s when the F&I manager holds all of the control in the conversation. Basically, the manager is imposing or “pushing” the process on the customer without giving any chance for input.

The better and more transparent approach, says Wilke, is to have the customer drive the process which is considered more of a “pull.”

In other words, tell customers that we have to do X number of things but let them choose what they want to do next. Let them take the wheel.

James Sellner, Sales Manager at Volkswagen Waterloo, is all for being open and transparent about the F&I process with the customer.

A big fan of LGM’s training program, Sellner, who spent about seven years in the F&I office before migrating to sales, learned that explaining each step throughout the F&I process to customers can help make a big difference and establish a sense of trust.

Even the way the F&I manager communicates with the customer can make a difference.

Say, “Zara, do you mind if we do your credit app next?” instead of “Zara, it’s time to do your credit app next.” I’m more likely to say “yes,” to the way the question was phrased because I know this needs to be done.

It might seem counterintuitive to throw the control of the negotiation to the customer but Wilke doesn’t think so.

He calls this tip the “permission to proceed,” which he shares in his training sessions. The process then becomes more of a “pull” instead of a “push.”

Sounds simple enough.

RIGHT TOOLS, RIGHT ENVIRONMENT
Developing a more transparent and customer-driven process also means creating the kind of environment that puts the customer at ease.

For Wilke, making the customer feel comfortable is more important than just going through the typical sales strategies, like the questions to ask.

“I don’t believe in old selling techniques nearly as much as I believe in creating a welcoming environment — one where there’s collaborating to achieve a common goal,” says Wilke.

That means establishing a level of trust to the point where you can make the customer feel like you are a resource to them. Wilke advises to make the customer more aware of a risk and then position the product as a solution. Then, it’s up to the customer to decide if he or she really needs it.

And he doesn’t think any fancy technology is required. Just a pen and piece of paper will do.

Sellner likes the menu-selling approach to help customers make their decisions.

“What I really like about the menu is its transparency,” he says, adding the customer is not only able to see all of the products the F&I manager is going to discuss but also it can be customizable if needed.

It’s all integrated in Volkswagen Waterloo’s DMS in which customers can see all of the figures and interest rates, and that there are no hidden fees.

The process has now become transparent.

The post Who’s in the driver’s seat? appeared first on Canadian Auto Dealer.

The F&I office is one of the biggest money makers at any dealership. Because it’s so important, it should be backed by a consistent and efficient process that has customers singing the dealership’s praises after their sales experience.

But instead of feeling elated, many customers leave the F&I office scratching their heads and reeling about how long and disorganized the process was for them, taking away from celebrating the big purchase they just made.

It’s no secret for dealers that their customers complain about being stuck in a room that’s been described as a windowless cell for 60 minutes, while an F&I manager rattles off a list of products with such a cursory overview that the person on the receiving end becomes more confused than enlightened — and often less likely to want to spend more money.

And without multimedia and visual aids to help, the F&I process becomes even more dull and tedious, which doesn’t encourage the customer to be more receptive to the additional products and warranties being offered.

That’s not to say the F&I process is being handled the same way by all dealerships, or even by the individual managers within them.

Customers will appreciate the process if F&I managers respect their time, keep the presentation engaging and are transparent throughout it.

Walking the show floor at the recent National Automobile Dealers Association Convention & Expo in San Francisco, there were rows of automotive suppliers using flashy product demos and videos on large screens or tablets showing off their their latest technologies aimed at addressing these very issues.

Canadian auto dealer spoke with Reynolds & Reynolds, one of the suppliers that expects to deliver tangible results in the F&I office.

In its booth, the company was showing demos of its docuPAD product.

The technology uses an interactive screen on the surface of the desk in which an F&I manager can pull up videos, graphs and other content to present products and menus to customers in a clear, concise and engaging way. The screen can be tilted, zoomed in and flipped around for added customer convenience.

The company says docuPAD, available in the U.S. with plans to roll it out in Canadian dealerships in the upcoming months, will also add a layer of transparency for the F&I managers themselves, by prompting them to ensure all documents are accurate and have been signed and complete to meet disclosure requirements.

Just looking at the product demos, it’s clear that these types of products are aimed at better connecting and engaging with customers using technology. These tools help customers get engaged, and even entertained with the process.

Another challenge for dealerships is to find the time and resources to keep the content and technologies from various vendors updated and current.

That’s why Final Coat, a provider of appearance protection and other F&I products, updates the multimedia components on the back end to ensure dealer websites are always up-to-date.

To provide the dealer’s site with a constant and refreshed stream of content, Sean Peek, Marketing Manager at Final Coat, says he and his marketing team control the content on their end through a web-based system called iFrame. A serialized code tracks the websites of its dealer partners so that all new photos, videos and any other updates will appear across the board on the dealer’s end, says Peek.

Not only do Final Coat’s solutions help dealers, but they also educate and empower consumers, who are able to control the information they want to receive — all without having to leave the dealer’s website.

Peek says the company’s marketing approaches and multimedia solutions ultimately boil down to the dealerships themselves, and their willingness to deliver a better customer experience. That’s the only way they will see better results.

The post Better, faster, stronger appeared first on Canadian Auto Dealer.

Thanks to technological innovations, dealers are now able to provide consumers with more options to protect their vehicles. With better technology comes better sales.

One F&I product that has fared particularly well is paint protection. Dealers are now seeing paint protection sales take off in F&I offices across the country.

GROWING DEMAND
Beyond being a profitable item on the F&I menu, paint protection can provide considerable value for customers. In the past, paint protection products used to be applied only to protect the hood and bumper of vehicles. Now, with self-healing functions and other technologies available, consumers are opting to cover the vehicle’s entire front end, and sometimes, even the whole car.

Mathieu Moreau, President, Parasol Canada, says increased paint protection coverage on vehicles has helped account for his company’s growing sales, which have increased 40 per cent every month over the last four years.

Dealers can also experience sales penetration as high as 60 per cent with paint protection products, says Gordon Swail, Senior Director, Training & Brand Performance, IA-SAL Group, who works with 3,000 dealers across Canada.

While paint protection sales are booming across the country, these kinds of products are particularly popular in Alberta and Quebec.

An abundance of seagulls — and the droppings they leave behind — has also made the technology sought-after on the West Coast. Swail says IA-SAL has a specialist out in Vancouver dedicated to selling paint protection products and services.

In Montreal, Moreau says he estimates technicians are installing paint protection on as many as 75-100 vehicles per day.

“It’s a great aftermarket product which has a nice markup for any F&I person who sells the product,” says Moreau.

Not without problems
With such a growing demand for paint protection, it seems as though all dealers and consumers should be on board with the paint protection service in Canada. That’s not the case, says Swail.

Time is often not on your F&I manager’s side. It’s common for new vehicle owners to be worn out completely from the sales process by the time they meet your F&I staff. The customers may have their guards up from the lengthy sales process.

Because there are so many products that have been introduced into the market over the last dozen years, your salesperson might not be well versed enough to be comfortable selling everything that’s available, explains Swail.

If the time factor was eliminated, Swail believes dealers could experience sales penetration as high as 80 per cent on new vehicles and 30 per cent or more on used ones — which is where one of the biggest opportunity lies for paint protection sales.

Right now, the used vehicle market for paint protection products is virtually untapped. Most dealers Swail talks to average only 10 per cent product penetration in the used vehicle category, which he says is a shame.

“There’s a general attitude among dealers that people who buy used cars don’t want to spend $400 on paint protection,” says Swail.

By thinking this way, dealers are essentially painting themselves into a corner.

TIME TO EDUCATE
Helping salespeople to sell paint protection services requires extensive training. That’s where Moreau and his team come in.

Moreau and the team he oversees at Parasol Canada are all highly-skilled and trained as paint protection technicians so they can help answer any technical questions. Parasol Canada offers training on site, over the phone, and instructional support videos, to help technicians install the product on vehicles.

To increase visibility and, in turn, sales, Moreau also drops off informational material and brochures to dealerships. He’s working hard to educate potential customers in the province of Ontario, a region which he feels requires more knowledge about paint protection products yet presents a huge opportunity.

Swail and his team focus on dispelling all of the myths surrounding paint protection products.

Basically, seeing is believing. One sales technique involves taking a brand new car and applying the paint protection product on one side and leaving the other as is. The result in appearance is night and day — and that shocks the salespeople.

“Nothing that I’ve seen in my 30 years around this business has been a more simple, more direct, more results producing way of selling that particular product,” says Swail.

He adds, “If a finance manager is willing to spend time to educate their dealership team or customer, it is a very straightforward product to sell, and they can be confident they’re giving the customer excellent value for their money.”

The post Painting a profitable picture appeared first on Canadian Auto Dealer.