Where Does F&I Fit into Your Dealership’s Digital Retailing Strategy? – Adam Marburger & Paul Brown, Ascent Dealer Solutions (Part 1)

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Looking to add more money to your bottom line by way of your finance department and dealership? CBT News sits down with Adam Marburger, F&I expert and President of Ascent Dealer Services, and Paul Brown, Vice President, to discuss solutions, training, and digital retailing within a dealership’s F&I Department.

Adam tells CBT News that with the influx of customers who want to do their car shopping from the couch, dealers might need to be a little concerned about the profitability of these customers for a dealership. Customers want to be able to select their car, select their trim, and select their options online and Adam says dealers need to be concerned about putting the right information online for these customers and consider at what point the F&I manager should be involved in the sale, if at all.

To hear more from Adam and Paul check out the full interview above.

F&IVIDEO TRANSCRIPT: 

Jim Fitzpatrick:
Hi, everyone. Thanks so much for joining us. Another edition of CBT News. I’m so happy to have in the studio with us two gentlemen that can change your life if you’re looking to add more money to your bottom line in your finance department, and also to your dealership. Mr. Adam Marburger who is an F&I expert and president of Assent Dealer Services. Thank you so much for coming. And he’s joined by Paul Brown, who’s Vice President of his company. Thanks so much for joining us, gentlemen.

Paul:
Thanks for having us.

Adam:
Happy to be here, as always. Thank you so much.

Jim Fitzpatrick:
For the people that are watching this right now, the dealers and F&I managers, that are not as familiar with you as we are here at the show, kind of give us what your company does, and how you can help dealers.

Adam:
Absolutely. So Assent Dealer Services, we’re a one-stop F&I solution. Everything from F&I training, coaching and mentoring, all the way up to a full suite of F&I products. And then we also specialize in reinsurance.

Jim Fitzpatrick:
Okay, and can a dealer use you for each individual part? Or does he have to go with your products?

Adam:
All of it. When we say we’re a one-stop shop, that’s what we are.

Jim Fitzpatrick:
Okay. Great. And I know, Paul, you have a huge background in retail automotive as well, right?

Paul:
Yes. Spent about 15 years in finance. Everything from a finance manager’s role to a director’s role. And then the past seven years I’ve been a general manager and a managing partner at a pretty large dealership in St. Louis.

Jim Fitzpatrick:
Sure, okay. Great, great. Well, let’s dive right in here. Talk to us about … we talk a great length about digital retailing, and it seems as though it’s coming. You know, the day that you can sit on the couch, order your vehicle, much like at Carvana, and the vehicle’s delivered to you, you’ve done all the paperwork, everything else.

Jim Fitzpatrick:
But there’s a lot of dealers that are very nervous out there right now, about the loss of maybe their finance income. How is that going to be done effectively online, and still be able to sell the products and services? So, talk to us a little bit about that. Should dealers be nervous about that?

Adam:
I would say somewhat. Here’s what I know about digital retailing, the last couple years, every conference especially. I just got back from Agent Conference in Chicago. We talk a little bit about digital retailing, but even the administrators don’t have a lot in place for that.

Adam:
I do think that we have to have options available because there’s customers now, they want to do business on their couch. They want to be able to select a car, select the trim, select their options. And I think we need to do a good job as dealers putting the right information online.

Adam:
Now, the million dollar question is, how do you sell more products? Because at some level, I feel and F&I manager’s got to get involved. Because I think the customer that gets to pick everything online, is not going to be very profitable for the dealers. So that where the dealers got to be a little scared. There’s got to be something where an F&I manager can interact with that customer.

Jim Fitzpatrick:
Okay. And do you recommend that that dealer … I mean the F&I manager jumps in early in the deal? Along with the sales manager, when they’re actually penciling the deal? Is that when they should be introduced?

Adam:
You want to take that Paul?

Paul:
As early as possible. I mean, if you could have the finance manager shaking people’s hands as they walk through the door, that’s a beautiful thing. so, the finance manager just getting involved, and he doesn’t even need to introduce himself as a manager. Just walk by a customer that’s sitting at a desk, and say, “Hey, I’m so and so.” Don’t give them your title, “Just wanted to know, do you need anything, do you need a cup of coffee, a bottled water?”

Paul:
Adam likes to let them know who he is, and say, “Hey, my office is right down the hall. I have an open door policy, so if during this process you have any questions, concerns, anything like that, come and talk to me.” But it’s critical that you have at least one warm touch before you go talk to the customer. And then when the deal gets kind of prepared to come into finance, that you sit down with the customer in a neutral area … so this sales person’s desk, do your need analysis, and just kind of talk to them. Make sure that you have all the documentation necessary to complete the deal. And then when they come into your office, they’ve talked to you one or two times, and you’re somebody that hopefully they like at that point.

Adam:
That’s right, yeah.

Jim Fitzpatrick:
Speaking about F&I managers, how have things changed in the area of recruitment? What kind of skill set do you look for today when you’re hiring a good F&I manager?

Adam:
I look for a couple of things. First, I kind of look at their job gaps. I want to see where they’ve been, right? And I want to find out why they’re here today.

Adam:
I like an F&I manager, a potential F&I manager to ask me a lot of questions. I want a lot of questions asked. And one thing too, I always look for somebody that’s got hobbies. Specifically competitive hobbies. I like to see people who do things outside of the home, outside of their workplace that challenge them and allow them to grow as a person.

Jim Fitzpatrick:
Sure, sure. Do you think with digital retailing coming on quickly, do they have to be a little more tech savvy then maybe ten or fifteen years ago, when we were hiring F&I managers? Or is that not an issue?

Adam:
I think a little bit. I mean here it’s always good to dive in and learn what’s going on, because here technology is real, it’s passing us up. I see people in our industry, some of our competitors that do not embrace technology, and then their numbers are dropping. So I think that it’s a good idea to get involved.

Jim Fitzpatrick:
Does an F&I manager have to come off the showroom floor? In your opinion?

Paul:
I personally like that. I mean, I like somebody that’s been in the trenches, understands customers buying motivations, understands how to ask the right questions, build rapport. I think it’s important to have some experience negotiating. But more just knowing how to treat a customer, how to build that rapport, how to get them to like you, because we all know if a customer likes you and trusts you … that doesn’t necessarily make them buy from you, but it makes them more receptive to the information you’re giving them. So I think that’s important, and I think that a good finance guy … a sales manager, general manager, general sales manager … you have to be a finance guy first.

Paul:
I just think that’s important. I think that’s the natural progression.

Jim Fitzpatrick:
Yeah, there’s no question.

Paul:
But come from the sales floor.

Adam:
And I prefer to grow the sales person within that store. I know a lot of dealers will outsource their F&I managers, but the life cycle of an F&I manager is sometimes 12 to 18 months. But if you get a sales person, and you grow them from within, you can mold them. And those customers, your rates go up drastically.

Jim Fitzpatrick:
And dive down a little bit further on that. What do you mean by grow them? Do you mean hire that sales person with it in mind that they will one day be an F&I manager?

Adam:
Yep. So what I like in some of our bigger accounts, we’ve put together what’s called a bench. We have a bench where you’ve got some of your top sales people that have shown interest to be an F&I professional, so we put them on a bench and we allow them to get involved in training. We train and love on them, and then what happens then, is your F&I managers that are in place, they know there’s always somebody looking for your job, right? We’re always trying to compete for the next job. So when you’ve got a stable there of guys that are learning, now you can pick from your bench.

Jim Fitzpatrick:
If a dealer calls you guys and says, “Hey I’m running 12 bucks a copy, but I went to a dealer 20 meeting, and everybody in the room is doing 15 … north of 15 hundred dollars a copy. A, is that plausible today? And B, where do you think he’s missing it?

Adam:
This is where he’s missing it, first of all it has to do with process. When Paul and I go into accounts … I mean, we took a thousand car store, and they were running about 12 hundred bucks a click, Okay? Within five months we got them up fifteen hundred a click. Okay? 300 dollars per transaction.

Jim Fitzpatrick:
Yeah, that’s pretty nice.

Adam:
300 thousand dollars a month. 3.6 million dollars a year. Know what we did? Tweaked the process. Put a layer of accountability on top of that process allows people to grow. Effective goal setting, with action plans based to those goals, with Paul and I monitoring them, that’s how you get it done. It’s a process and accountability.

Jim Fitzpatrick:
Sounds pretty simple.

Adam:
Basic blocking and tackling, but why does it not happen? I don’t know.

Jim Fitzpatrick:
Switching gears a little bit. Menu selling, is this something that you highly recommend the dealer do 100% of the time? Menus or … walk me through that.

Adam:
Absolutely. Without question, 100% of the time, 100% of the customers, 100% products. Now here’s the deal, we make things too difficult. I mean all this talk about menu, okay. We make things so difficult, okay. Less products equal more profit.

Adam:
I go into stores, and I see 12 products in the same line, what you’re doing is confusing the customer. You need to pick five or six products within your dealership that are fantastic, best in class products that the consumers love to buy. We need to make things efficiently, quick. They loathe a sales pitch.

Adam:
And customers have become more savvy now. When you come into the office, and you put that menu out in front of them. Or even if it’s a digital menu, they know they’re getting a sales pitch.

Adam:
So I believe less is more, and then you will definitely increase. And I know Paul has … Paul, some of his claim to fame in on menu and warranty presentation. And I’ll tell you-

Jim Fitzpatrick:
Okay, let’s hear from the expert.

Paul:
I mean, when he’s saying less is more … and it’s not necessarily less products, because what we like to do is, we like to do bundles. We like to take one product per se, and have it have three or four things in it that matter to the customer, and that are things that the customers want to buy. But it’s not overwhelming when they look at it.

Paul:
Because sometimes if you just give a customer too much stuff, they just say no because they’re so afraid of making a mistake. Because they’ve got all this information, they don’t know what to pick. So it becomes really frustrating for a finance guy too, because you go, “Man, I know everything about the car. I know exactly what they should have bought, I knew all the buying signals. They told me how to do it, and I still sold nothing.”

Paul:
Well, it’s because you confused them. And customers are more afraid of making a mistake then they are of having to pay some money down the road.

Jim Fitzpatrick:
Can you make money in F&I, leasing vehicles?

Adam:
Absolutely.

Adam:
Absolutely you can. And here, the reserves there when it’s there. Right? It’s not always there. But you do have lease ware products, you do have bundle products that the customer could get the value immediately from. So there are products out there, something bad doesn’t have to happen to you for you to get to use the benefit.

Adam:
There are some incredible chemical products that … I mean I’m talking on like a new BMW, a Mercedes, a Lexus, that just are fabulous products that consumers happily engaged with. And they run about a $500 per profit, per transaction on those products. So you can absolutely make money on leasing.

Adam:
You know, F&I guys back in the day, they hear lease in cash, and they want to run. No, no, no, embrace the deal, maximize the transaction, and help the customer.

Jim Fitzpatrick:
Yeah, that’s about as easy as it is too, right? So when you were … what were some of the things that you were most concerned with when you were a dealer? As it related to running the showroom, and also running the F&I department, what were some of the big challenges?

Adam:
Biggest challenges were … when you put on your dealer hat, you look everywhere and you go, “Oh my gosh, as a dealership we bleed money everywhere.” Because you starting looking at things and you say, “Okay, when we do this, this costs us money. This costs us a sale. This costs us customer satisfaction.” So, being a finance guy at heart, and I always will be, I structured my dealership from the second that a salesperson said hello, the second that they got into the finance office. Everything was geared kind of towards F&I. So,

Adam:
I had eight specific questions that a salesperson was required to get information on when they were doing their needs analysis with a customer, that was just good information for the F&I office. So that when they sat down with a customer, they could sit down and build actual real rapport, and not sit there and start asking sales questions that makes the hair on a customer’s neck stand up.

Adam:
You know, “How many miles a year are you going to drive? How long are you going to keep this?” They know you’re getting ready to pitch them something.

Paul:
That’s right.

Adam:
So we set kind of what I like to call logic traps, which is when a customer gives us information, and then we use that information to present them with products that should be important to them, it’s real hard for them to go, “Oh, no, no, no, that’s not important.” Well based off all the information you gave me earlier, it’s almost critical that you have this stuff.

Adam:
So we kind of built our whole process around that, because really these days, you have F&I, and you have fixed o ps, or the places that you’re going to make money as a dealership. You can’t make front end gross on new cars anymore, it’s really difficult. Used cars is getting more difficult to do. So, you got those two areas, and you have to excel in those if you want to stay alive.

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