On this week’s episode of F&I Today, Becky Chernek talks about the importance of following up with the customer after the sale should the customer decide not to purchase a service contract or other items.
Speaker 1: Welcome to F&I today with Becky Chernek; brought to you by eLend Solutions.
Becky Chernek: Welcome to the F&I today show. I’m your host, Becky Chernek, and I’m happy you’re able to join us today. We all know that F&I is vital to the dealership’s bottom line, so that’s where I come in. I’ve been in the automotive industry for more than 30 years and in finance and insurance since 1989. I’ve seen a lot and I know how to get impact that sticks. I’ve worked with hundreds of F&I managers over the years with amazing results.
Becky Chernek: Now, with all my years in F&I, we have discussed if not a hundred times, perhaps thousands of times, the importance of following up with the customer after the sale should the customer decide not to buy a service contract or any other product, for that matter.
Becky Chernek: I’ll never forget when I worked as an F&I manager for Jim Coleman Cadillac. I was generously rewarded for service contract sales. If I was able to hold over 50% service contract penetration, I was paid a lot on the total pot.
Becky Chernek: The dealership never sold more than 35% service contract penetration, so it made sense to take the offer. I realized I had everything to gain and nothing to lose. I achieved that goal and more simply by getting with each of the service writers and paying them as spiff when every customer who purchased a service contract in the service lane, and I didn’t stop there. I made it a point to get a list of customers who didn’t purchase a service contract over the past 12 or even 24 months, and I sent out a letter every day.
Becky Chernek: It was easy. Anyone can do it. It was found money. It was a gold mine. I had about 15 extra service contracts per month that added to my number. I easily got over 50% service contract penetration and more, and none of the managers could even figure it out or, if they understood my concept, they never bother to implement it for themselves.
Becky Chernek: Why don’t more F&I managers take the initiative to contact the customer after the sale, especially those were an after sale service contract could make a huge impact to their overall pay plan? I tell you, an extra 15 service contracts per month would make a big difference to a paycheck.
Becky Chernek: What’s the answer here? Is it the lack of training or just that the F&I managers don’t have the ambition or drive to do it on their own? Why should you care about an efficient after sale process? You should care because the competitors do and you’re losing opportunities to put more profits on the book and retaining customers. You’ve got to know once your customer has taken delivery of a vehicle a public record becomes a hot lead and your customer is up for grabs.
Becky Chernek: Many providers, such as AAA and other call centers, they don’t mind reaching out to your customer to sell them a service contract over the phone or other ancillary products they may not have taken advantage of at the dealership. These guys are great at selling service contracts over the phone. It’s second nature to them.
Becky Chernek: Some will debate me; why doesn’t the customer buy the service contract and other ancillary products at time of sale? Why would they wait until after delivery? That’s a good question. Let’s think about it: the F&I manager didn’t present the products to the customer, the customer comes into the F&I office with a check made out for the exact amount, the deal was kept by the bank and the advance was tight and the F&I couldn’t include the products into the financing, the customer felt rushed and confused and then was compelled to decline all options, the customer couldn’t budget the service contract in their payment and the F&I manager just wasn’t successful to overcome the product objections.
Becky Chernek: There are tons of reasons why customer won’t buy service contract at time of delivery, but I can tell you that there are so many times that a customer may say no at first offer but just turns around and buys a product from somebody else. Circumstances change all the time.
Becky Chernek: Dealers, I hope you’re listening up and will consider a process that assures a customer is presented with a service contract or any other ancillary product that makes sense after delivery. It could be the second followup call that the dealer offers the customer the option to take advantage of the product. Retention is key to keeping the customer coming back to the dealership. It’s been proven that that customer who purchases a service contract will likely buy their next vehicle from the selling dealership.
Becky Chernek: By keeping your name in front of the customer through offering additional value added products, it will often time be a reminder to the customer to refer the dealership to a family member, friend, or even neighbor. It’s imperative that the dealer keep their name in front of the customer as often as you can. You’re not spamming the customer. This is a plan process. It is synchronized for a more creative engagement.
Becky Chernek: For an example, a really dear friend of mine purchased a BMW. He is well connected with several insurance providers and he knows everyone in the industry. This day, he takes delivery of his BMW. The sales manager, hands over the keys to the car and tells the finance manager, “Just print up the deal,” that if he wanted to go ahead and buy additional coverages he could buy it at cost from any one of those insurance provider buddies.
Becky Chernek: Sound familiar? The F&I manager followed orders and didn’t present the products. Now, I always advise present 100% of the products do 100% of the customers 100% of the time; you just never know. Let’s be honest here, it doesn’t always happen like that. The sales professional, like clockwork, we’ll follow up on the second day to make sure that my friend was completely satisfied and didn’t have any questions regarding how the vehicle operated.
Becky Chernek: The second followup call occurred two weeks afterward. On this call, the sales professional asked if he understood all the technology or had any additional questions. She also mentioned that she couldn’t help but notice that he didn’t take advantage of the tire and wheel protection and also pointed out that she was concerned since he had bought a vehicle with these high performance tires and the last thing he wanted to do was pay thousands of dollars out of pocket to replace either a tire and wheel should he experience a road hazard condition.
Becky Chernek: She also told him that she thought he should reconsider and get the coverage. Bingo, my friend purchases that tire and wheel protection. I guess a two week test drive more than proved that that tire and wheel protection made a whole lot of sense. The point I’m trying to drive home here, don’t underestimate the power behind a consistent after-sale process. There is so much opportunity here. It’s like an untapped pot of gold. Keep asking. Retaining your business is a priority assured that you’re not only meeting the customer on their terms at time of delivery, but afterward. Perhaps that after sale isn’t the role for F&I manager since they would be doing it already. Hand it over to a sales person or perhaps a dedicated BDC advisor. Put a good pay plan together that gets results.
Becky Chernek: As the great philosopher Aristotle wrote, we are what we repeatedly do. Excellence then is not an act but a habit.
Becky Chernek: Thank you for joining me on F&I today. Be sure to come back next week right here on the CBT automotive network for our next edition of F&I today. Also, feel free to contact me regarding my consulting services at (404) 276-4026. My Specialty is providing F&I training, helping auto dealers achieve a higher level of performance by improving internal processes that begin the moment the customer touches down on that dealership website and ends with finalizing in-person transactions in F&I or later.
Becky Chernek: Start making a difference today. Check out my F&I online platform, [inaudible] consulting virtual pro, and take your F&I department to greater heights.
Speaker 1: F&I Today brought to you by eLend Solutions.
Speaker 3: This has been a JBF Business Media production.