Three major dealership departments — sales, service and finance and insurance — should work together “like a football team, where each player understands the other's role,” says Jim McDavid of the JM&A Group.
But often the three operations seem like they're playing against each other.
McDavid cites a “historical disconnect” among the departments.
It's bad for business and hurts customer relations because “sales, service and F&I are the three major touch points for customers,” says McDavid, vice president of North American sales for JM&A.
“Such disconnects can affect gross profit, customer satisfaction scores and customer loyalties,” he says. “And we are in an age where dealers want to drive loyalty with high CSIs (customer satisfaction indexes).”
JM&A, a long-time F&I trainer, now is expanding its training to the service and sales departments.
One goal is to “tear down the walls” that often separate the three dealership departments, says Bruce Foster, director of JM&A's training center.
“Dealers often know there are conflicts between the departments, but they sometimes need an outside person to correct the problems,” says Foster.
One way to end differences is for each department to use “the same language and same sales processes,” he says. When that's done, “we see a dramatic decrease in the conflicts.”
Disputes often center on personnel in one department thinking employees in another are self-centered and insensitive to others' needs.
Foster cites some typical conflicts:
“A lot of times, you have sales people at the front end focused on maximizing gross profits, and consequently F&I doesn't get set up properly. So when the customer goes into the F&I office, the manager there must start from a negative point or unwind a deal.
“If the store is F&I driven, the sales manager is leaving it to F&I to maximize the interest rate, and you end up having sales people saying, ‘F&I is blowing deals for me.’ Or you have F&I saying, ‘I'm doing all the work.’”
Meanwhile, Foster points to “the age-old problem” of the service department feeling abused when an F&I manager, in selling an extended-service contract to a car buyer, overstates what repairs are covered in the agreement.
“What F&I says and does, the service department has to live with for five or so years,” adds McDavid. “It becomes a problem for service when the F&I says the service contract covers something that it doesn't.”
JM&A's training promotes the setting of reasonable interdepartmental expectations. It also focuses on “the power of pay plans,” says McDavid That means compensation that rewards workers for acting as part of a team.
“The pay plan is a job description,” says McDavid. “You can control behavior with it.”
He says spiffs and bonuses should go to employees who help promote sales — even if an employee isn't necessarily in sales.
“For instance, the person who answers the phone at a dealership is almost always on a salary,” he says. “What dealers should ask is: ‘Do I want to give a bonus if that person aids sales by being polite, not putting someone on hold and getting a salesperson on the line quickly?’”
Service personnel also should drum up showroom sales, says Foster.
“The service department sometimes sees more customers in one day than the showroom sees in a week,” he says. “It's a great point of contact when service people tell customers something like: ‘I notice you have a 5-year-old Mustang; have you seen our new ones?’”
To achieve harmony among departments, managers “need to be intermittently involved,” says Foster.
He says Lexus dealerships do a good job of creating a team environment between sales and service, using techniques such as mutual introductions of each other's customers.
McDavid says the ultimate goal is “a seamless transition from department to department.”