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It happens in dealership finance and insurance offices every day. Despite a thorough aftermarket-products presentation, a buyer declines one or more of the offerings.
That’s unfortunate. Worse, some say, is the failure of F&I to follow up and give the prospective sale another go-round.
“Dealers cannot allow a customer to leave the F&I office without revisiting these sales opportunities,” says F&I veteran Becky Chernek of Chernek Consulting. “The business manager’s feeling once the customer exits the F&I office is, ‘I’m done.’
“They might send a letter afterward, but I don’t see concentrated effort to purse lost F&I sales.”
Dealers should know that once a vehicle is registered with the state department of motor vehicles, the customer information is public knowledge. Service-contract providers aggressively go after those people who started as dealership customers.
“That sale might as well be the dealership’s contract than another’s,” Chernek says.
Fewer than 10% of F&I managers follow up, estimates Jim Maxim, Jr., president of MaximTrak Technologies.
“Dealers typically lack the process for this,” he says. “Yet we know that half of all customers leave F&I without buying so there’s another 50% that might be recaptured if pursued.”
Dealership management systems can provide F&I managers with lost-opportunity reports that help pursue car buyers who initially declined to buy aftermarket products and services.
“F&I should run this report weekly at least, if the manager is hungry,” says Eric Marcel of DMS provider Auto/Mate. “Just because a customer declined to buy an aftermarket product during their vehicle purchase doesn’t mean the value of that product or products isn’t still valid for them.
He recommends sending follow-up emails or postcards, or, in a smaller community, making a phone call to review F&I product benefits.
“It can get the conversation going again, especially if the F&I manager gets aggressive with pricing,” he says.
Anchor Auto Group of Rhode Island uses DMS sales-reporting software to extract lost sales opportunities, including F&I.
“Half of our customers leave F&I without purchasing a service contract, but our follow-up efforts net a 10% return,” says Mike Breen, the dealership’s marketing and IT manager.
“For our Nissan and Subaru dealership, this nets around $10,000 in recovered revenue a month, and customers fulfill 95% of them, so there’s good stickiness.”
Jim Leman writes about automotive retail operations from Grayslake, IL. He is at [email protected]
