How F&I Expert Rick McCormick Found His Niche in the Most Unlikely Place

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How F&I Expert Rick McCormick Found His Niche in the Most Unlikely Place

Today on CBT we are happy to have Rick McCormick in our studio. Rick is the National Account Development Manager at Reahard & Associates, a business that provides custom-tailored in-dealership F&I training programs and consulting services that help to increase a dealership’s F&I income. Rick discusses his past work as a clergyman and how it affects his F&I training techniques today, and the similarities that he has discovered related to the skills needed for each line of work. He says that there are two skills that are most important in becoming an effective minister: to be a good listener and a good communicator. And he describes how is it these very skills that helped him so effectively in F&I training. To hear more about these necessary skills and more watch the full interview above or visit the Reahard & Associates website: go-reahard.com.

F&IVIDEO TRANSCRIPT: 

Jim Fitzpatrick:
Hello everyone. We welcome you to another edition of CBT news. So glad you could join us today. Today we’re happy to have in the studio, Mr Rick McCormick, who is the National Account Development Manager at Reahard & Associates, the F&I training company that you’ve heard so much about over the years. You guys have been around a long time.

Rick McCormick:
Good to be here.

Jim Fitzpatrick:
So let’s kind of dive right in here. You had a nice article written about you in Wards Auto and talked a little bit about your previous background as a clergy. Talk to us a little bit about that article.

Rick McCormick:
That always seems to be a lot of interest. But they’re very similar traits. They’re very similar skillsets. Two things you have to do to be an effective minister, you’ve got to be a really good listener, because you’re leading a group of people. So to lead people, you’ve got to be a good listener. Find out what’s going on with them, what are they like, what’s going on in their lives. Find out what their needs and wants are. Very similar to F&I. You’ve got an invisible product that you’ve got to communicate very effectively. And the only difference between that in F&I, in F&I you get to see different people every day. Well, that’s even more challenging as a minister because you’re seeing the same people every week. So you’ve got to be a very effective communicator. You’ve got to find ways to really communicate, which I used a lot of visual aids then I use a lot of visual aids in the F&I office.

Rick McCormick:
But I had an elderly gentlemen when I first started in that part of my professional life, that told me a secret that I’ve never forgotten. And it’s rolled over into the F&I sector as well. He said if you ever talk with an individual or a group, every time you have an interaction, three things have to happen or you waste their time. And he said the worst thing you can do to a human being is waste their time. Well, it’s the same way in the F&I office. They’re very driven by time. And he says they have to learn something they didn’t know before they met you. They’ve got to feel something, because you make decisions, which I was in the business of having people make decisions and hopefully the right decisions. They make decisions emotionally. They justify it logically, and then you have to motivate them to do something about what they’ve learned and felt. So if you do those three things every time, and I’ve taught that to F&I people all over the country because that’s what happens.

Jim Fitzpatrick:
That’s very good advice.

Rick McCormick:
Customers have no idea that if their gas gauge fails on the instrument cluster, they have to replace the whole cluster and it makes a minor repair. They learn something. Great companies like Nike, they don’t ever talk about their shoes on their commercials. Gatorade doesn’t talk about their sports drinks because someone taught them. Nike, you don’t sell shoes, you sell feelings. So put Michael Jordan in those Nike’s and show him doing amazing things. Show Serena Williams winning the U.S. Open right after she takes a break drinking Gatorade. Because they were told you don’t sell a product, you sell a feeling.

Rick McCormick:
And that’s what it is in the F&I office, very similar to what it was in ministry. You sell a feeling. That’s where people make their decisions and then logically they justify them. So it’s very easy to roll from that profession into this one.

Jim Fitzpatrick:
Talk to us about some of the things that have changed in the last 14 years. Obviously dealers have seen the entire focus of F&I shift from a very dealership-centric approach to now it looks like a very customer-centric approach. Talk to us about that.

Rick McCormick:
Well it is, and one of the things we have a real interesting time reminding dealers. It really doesn’t matter what the dealer or the F&I manager or director or even what I think about their F&I process. The only thing that really matters is what does the customer think? Because all great companies, when they start listening to the customer and adapt to it, that’s when they grow and explode. And we’ve been kind of slow to do that in the car business. We kind of want to have our macho “We know what to do and how to do it and you guys are going to do it our way.” But customers don’t like that anymore.

Rick McCormick:
The only real difference between most dealerships these days is the customer experience that they have while they’re there. So what we have to do is start thinking what did the customer want? What do they think? What do they like? And start giving them that process. Whether it’s online or in the store, we have to adapt. Now when we adapt, we can put our stamp on it and kind of make it look the way we want it to look and form it the way we want to form it, but we can’t do it unless we take what the customer wants and let that drive the process.

Jim Fitzpatrick:
Right. Right. And that’s what has to happen.

Rick McCormick:
Absolutely.

Jim Fitzpatrick:
Yeah. So let’s switch gears a little bit and talk about F&I and the impact that digital retailing will have in F&I. A lot of dealers out there that are watching us right now, we’ve done a lot of shows on this very topic, and they’re concerned. They’re concerned that the last great frontier of gross profit on new cars might be going away if people are doing everything from the comfort of their living room or the kitchen table, and saying nope, nope. Don’t want that. Don’t need that. Just deliver the car to me, and making it almost like a generic kind of a transaction, right?

Rick McCormick:
It is. And probably the resistance in the industry from embracing some of this change is actually going to be very counterproductive. Because if we embrace it, then we get to model it. Customers want to know. They want to know about F&I products before they come to the F&I office. Cox Automotive, most everybody’s read their research, they found out very clearly, customers want to know. But they had key words in their research. They said their customers are looking for educational and informative information. Never once in their research, and they specify this clearly, customers, they’re not looking for price. They’re not looking to negotiate. They just want to know what’s going to go on in there. What are we going to talk about in that F&I office? What products am I going to consider? And if we start putting that on our websites at dealerships, we’ve even created ourselves, some videos about the products that are just educational and informative. They’re not commercials, they’re not trying to sell anything. They’re just telling that customer here’s what we’re going to talk about.

Rick McCormick:
And when they come in, customers, they know what a service contract is, even though they call it something else. There’s a lot of the things we talk about, they don’t know what they are. They’ve never heard about them. And they used to be able to have a presentation about something they never heard of and in 10 minutes make a decision to buy it, but not anymore. They’re all truly programmed to say don’t make a decision on anything you haven’t researched. So we’ve got to give them the opportunity to do the research.

Jim Fitzpatrick:
Sure. If you’re looking for an F&I manager today, where are you looking for that man or woman? Is it always the showroom floor or can it be from other types of industry or businesses and bring that person in? Is that sometimes a mistake we make? When I was running dealerships, it was always the take either the top guy or the second guy, the third person, or what have you, and let’s put them in F&I school and get them in F&I. When in reality, if you sit back and think about it, sometimes those things don’t go together. Right?

Rick McCormick:
They don’t. And if you’re going to look at your sales staff to bring somebody into F&I, usually what they do is they get whoever sells the most cars. Well, that’s the exact wrong thing to do. They might sell a lot of cars, but do they know how to hold profit on those cars that they sell? Because that’s the goal of the F&I office is to produce profit.

Rick McCormick:
But it’s a perfectly legitimate thing to look out in other industries. What you’re really looking for is someone who’s a good listener, someone who is committed to consistent learning and will consistently look for ways to grow their skills. And if you find that person, if you bring them right out of the retail world, another sector, and put them right into F&I office, there is a learning curve about the car business. There’s no doubt. However, we get people off the sales room floor that don’t have those traits and we put them in there and they don’t work either. So I think there is a great opportunity and I’ve seen dealerships, just a dealer himself have an interaction with someone in another industry and say, “You would be perfect in this,” and bring them in. And they’ve done a great job.

Jim Fitzpatrick:
What’s your take on the notion that more dealers are actually doing away with their F&I department as we know it and having the sales manager take care of the entire transaction, or in some cases have the sales associate take care of the entire transaction?

Rick McCormick:
Yeah. We’re seeing that in a lot of places. I’ve seen probably just as many that have started that and then gone back to the original way they did it. I’ve seen a lot of those. I know it’s working in some areas and there might be some value depending on what it is. I actually had a family member call me last week that had bought a car from a dealership that did that, but the sales person/F&I person that was doing it all had gotten the paperwork all wrong. They said, “Well, could you go with me? I can’t make heads or tails out of what they’re saying.” So I went along and it was a very nice conversation, but the sales person had really messed everything up. I’ll never forget though, he made a statement … Because I told him what I did when I went in. I said, “I’m just here to make sure we get this paperwork right because we’re family.” And he goes, “Well, I really don’t know anything about F&I, I just do the paperwork.” I thought, now that’s kind of scary.

Jim Fitzpatrick:
That is kind of scary. Yeah.

Rick McCormick:
So they’ve got to be well trained if you’re going to do it and it’s got to be a consistent process and you’ve really got to have a high level of salespeople that can carry that out.

Jim Fitzpatrick:
Yeah, that’s right. Now, 72 and 84 months is almost like a gimme, right?

Rick McCormick:
Oh yes.

Jim Fitzpatrick:
So what do you tell your F&I trainees? To push for that? To not push for that? Is that hurting the overall landscape for dealers if you get people out there 72 and 84 month financing, to where you take that person right out of the market for quite some time. Right?

Rick McCormick:
I’ve never been a fan of 84 months. It does happen quite often. And a lot of that is it’s actually a product of the desk that might be putting that deal together. That’s the only way they can get someone to buy that $65,000 truck is to make that payment look affordable at an extended term. We used to put everybody on 48 or 60 months and then we could give them a better payment and stretch it once we got them in the F&I office, but now they’re coming in that way. So it’s probably more of a product of the deal before F&I gets involved. That’s one of the reasons we ask F&I to get involved early.

Jim Fitzpatrick:
I was just going to go there. Do you want your F&I people getting out into the deal much earlier?

Rick McCormick:
Absolutely.

Jim Fitzpatrick:
And at what point?

Rick McCormick:
As early as I can get them. There’s a lot of resistance from some of them.

Jim Fitzpatrick:
From the F&I manager or from the desk manager?

Rick McCormick:
From the F&I manager. Yeah. The desk managers, usually most of them want them out there. They want the help. They see that interaction. We train F&I managers if you don’t have a reason that you have to be in your office, you should be out on the floor or at the sales desk monitoring and what’s going on. Because the sooner they meet that customer, that customer, the more comfortable they are with them. We have to stop this-

Jim Fitzpatrick:
It used to be the case where you didn’t want to meet them because they go, “You’re the F&I guy? Oh, what’s my payment on this car?” They’re like, “Ah. Why did I just meet this customer?”

Rick McCormick:
Well, you’ve got to be better than that. You’ve got to be better than that. [crosstalk 00:11:28]

Jim Fitzpatrick:
You’ve got to have the word track to get out of the situation easily.

Rick McCormick:
But we’ve got to stop that perception of the F&I guy or gal being that person at the end of the deal that you really don’t want to see. So the only way to do that is they’ve got to get out there and interact with customers. Have fun with them. Just tell them who you are, and “I just wanted to say hello.” And I’ve got one F&I manager, he’ll go up to customers all the times. I’ve watched him do it. Everybody gets tired of hearing at the dealership. They’ll hear him go, “You haven’t test driven the car, have you?” “Well, yes we have.” “Oh man, I’m really sorry I didn’t get to you earlier.” “Why is there …” “Oh, no, no. Just every time you drive it, if you test drive it you buy it.” “No, we haven’t decided to buy it.” “Oh, I’m just playing with you. I’ll see you in a little.” And then when they come in the F&I office there’s a guy that we’re having fun with there.

Jim Fitzpatrick:
Well, Mr Rick McCormick, the National Account Development Manager at Reahard & Associates, I want to thank you so much for spending some time with us here at CBT news. We really appreciate it.

Rick McCormick:
It’s been my privilege. Good to be here.

Jim Fitzpatrick:
Great. And hopefully we can have you back and talk more about the issues that we didn’t get to today because of time. That’d be great.

Rick McCormick:
Okay. I’d be glad to do that.

Jim Fitzpatrick:
Thank you so much.

Rick McCormick:
Thank you.

Jim Fitzpatrick:
CBT Automotive Network, the number one most watched network in retail automotive. This has been a JBF Business Media production.

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