What to Do About Faltering Fred in F&I

A car dealership F&I manager isn’t carrying his weight. ReverseRisk reporting software flags the shortcoming, then provides information for dealing with the issue.

Information technology provider Reynolds and Reynolds recently acquired ReverseRisk, a web-based platform that crunches dealership data and provides actionable analytics for all store operations, from front-end sales to back-end service.

But in discussing the system’s capabilities, Reynolds executives cite an actual F&I situation at a dealership. Jon Strawsburg, Reynolds’ vice president-product planning, tells WardsAuto:

“This store had four F&I managers, and one of them was just not producing. He was getting more than his fair share of ‘ups,’ but falling way below his share in terms of profitability (from selling aftermarket products and services).  

“ReverseRisk allows for what-if modeling, such as ‘What if I just got rid of that person and tried to do it with three; how does that stack up in terms of volume and profitability?”

Wouldn’t a dealer know just by looking at basic numbers on paper that an employee wasn’t performing well?

“Generally you would think that,” Strawsburg says. “But ReverseRisk goes beyond looking at the fact someone was paid X amount of commission. It also factors in the volume involved. It looks at whether people are doing their fair share in terms of volume. Then it offers strategic forecasting and modeling.”

Kasi Edwards, Reynolds vice president-marketing, says the system can get past under-performance excuses and explanations.

“When looking at those four F&I managers in that situation, the fourth person with the lower gross typically says, ‘Well, I get all the cash deals. The system allows you to drill down and say, ‘Do you really?’”

Adds Thomas Schwartz, Reynolds director-communications:

“Instead of just saying I’m going to move Fred out of that department, you can peel information out and model it for forecasting.

“For example, if you pulled that fourth person out and reallocated the deals across the three other F&I managers, what is the total profitability? Can they handle that additional capacity? You not only know someone isn’t performing well, but also what you can do about it.”

Three veterans of auto retailing developed the ReverseRisk system because “they were frustrated they couldn’t readily get information they wanted when they were at dealerships,” Schwartz says.

Reynolds acquired the company after weighing various factors. One of them was ReverseRisk’s loyal customer base, Strawsburg says. “That always perks our ears up.”

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