Dealerships across the country struggle with turnover for a variety of reasons…commission-heavy compensation, long hours, lack of respect from management or owners, lack of professional respect among peers. The list goes on and on. In reality, most dealer personnel stay an average of only 3 years and that cuts across departments (sales, F&I, parts, service). Not a very long shelf life, indeed.
For F&I managers, though, there are some steps you can take to help reduce turnover and in turn, increase PVR in the process. You may not think the two are related but you couldn’t be more wrong.
- Offer World-Class Training: Whether it’s an outside hire (not from the auto industry) or promoting a salesperson to F&I, offer them the very best training your store can provide. If they feel like you are making an investment in their professional development, that will pay dividends when you see the PVR rise. They will be confident, careful in compliance procedures, and truly enthusiastic when working with customers.
If your F&I managers are properly trained with the latest techniques, they will see their penetration rise and their CSI increase as well. Think of the last time you started a job and were not trained very well. How did that feel? Give your F&I managers every tool to help them succeed and your store will be better for it.
- Compensation is Key: For decades, dealers have been offering F&I managers an all commission or, in some cases, draw vs. commission pay plans believing that it promotes a higher level of incentive to sell more product.
Well, not really. Yes, they will be motivated to push more product but that can also lead to jamming and unethical practices that will result in lower CSI and higher chargebacks. Commission-only plans can hurt the profitability of your store by creating a high-pressure environment for your customers that simply confirms the stereotype they already have about the F&I staff – worse than the salesperson and lying about everything.
Highly successful dealers have started adopting a salary plus bonus compensation structure that is taking that edge off pushing unnecessary product and instead encouraging F&I managers to truly be the consultative salesperson your customer needs. PVR increases, chargebacks decrease dramatically, and F&I turnover lowers. They want to stay and they no longer have to worry about how they will pay their bills if the store has a slow month. Less financial stress for them means higher profits for your store.
- Work-Life Balance Matters: Maybe it’s an overused term these days but work-life balance is a real thing. Dealers for generations have made their F&I staff work bell-to-bell especially in busy markets. That day could start at 9am and not end until the last shopper walks off the lot at 10pm. Your staff misses family events, puts off vacation, and rarely has time to attend to important appointments or person matters. Their schedule just doesn’t allow for much of a life.
Some argue that if they are not in the box, they can’t make any money. But if you are overworked, stressed, missing your family or loved ones, and miserable, how much money will they realistically make? How sloppy could the paperwork be due to fatigue or burnout? How many customers will sense this and slam the store on CSI? But there is a simple fix.
Make a concerted effort to schedule 2 days off a week for each F&I manager. Reduce hours from 80 down to 40-50 hours per week. If possible, staff enough managers to make this kind of schedule work and watch the change in PVR and CSI. Will they make less from working less deals? Yes, but they will be rested, happier, and less stressed which makes the customer experience much better. Happier customers are more receptive customers and that means higher F&I profits.
- Change the Perception of F&I – Think about it…they are called F&I ‘managers’ for a reason so why do some dealers regard them the same as salespeople on the floor? Treat your F&I staff as managers with all the respect that should go with it and you will likely see a difference in how they approach all the intricate layers to their job.
Your F&I staff is tasked with protecting the dealership through regulatory compliance, following state specific DMV procedures, and adding a substantial profit per deal that no dealership can operate without. That is a lot of responsibility. Make them know they are a critical cog in the wheel that drives business.
How do you do that? Have your F&I managers conducts trainings for sales staff. Make sure they are introduced early in the customer walk-around by the salespeople. Feature them in dealership social media platforms. If you don’t already do it, make sure they are a part of manager meetings. If your F&I managers feel empowered and important, they will take increased pride in their work and you know what that leads to…higher profits per deal.