Pub. 14 2015-2016 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 3 , 2 0 1 5 8 new jersey auto retailer Evolution What characterized F&I in its earliest stages of development? While the first F&I positions were cre- ated in the 1960’s, it was in the early 1970’s that F&I truly became a separate department in most dealerships. The process was based mainly on assumptive selling. Managers included products in the payment and hoped the customer would just accept them. If the customer objected, the F&I manager would defend the products, overcome the objections and again assume the sale. Looking back we obviously know now that is a technique we would never use today nor would customers tolerate. However, we did gain one foundational principle from that era that is still a criti- cal part of every successful F&I depart- ment. The expectation was set that the F&I manager should see every customer before they decided how to finance their purchase. Any F&I department today that does not ensure every customer sits with an F&I manager before making fi- nance decisions in connection with their purchase is losing profit opportunities. In turn, the customer is missing an op- portunity to choose from financing and protection options that may be favorable for them. What has been some of the most significant turning points that have led us to where we are today in F&I? It’s important to note customer demands have always forged the path F&I has taken and every change made in the process over the decades has been the result of customer input. In the 1980’s customer complaints forced dealers to introduce an alternative to assump- tive selling and step-selling was born. Customers endured multiple feature- advantages-benefit presentations for F&I products they had expressed no interest in purchasing. Objections were overcome by “logic traps” designed to make “yes” the obvious answer and a “no” made the customer appear less knowledgeable. Sales pressure was still being utilized by F&I and how to apply it was a focus. As with every era in the evolution of F&I, we added another valuable principle that still lives today. To effectively step-sell products required the F&I manager be an expert on his/her products. And with only 3-4 products available to offer a customer the step-selling environment, it was worth the risk that a customer might stonewall after buying one or two products. The 1990’s brought the most significant change in F&I’s history. Due to the increased need for F&I income in dealerships, the menu was introduced. As the number of products offered increased, the menu provided a quick and easy way to present multiple products and even allowed managers to tailor packages to each customer’s needs. By the time we exited the 1990’s we had established the following principles: the F&I manager should see every customer, he or she should be an expert on the products offered, and the products needed to be presented in a quick and organized manner to provide a process to sell more products. Today we are faced with the cont i nuously on l i ne, i Pad-wield i ng The of F&I A Q&A WITH RICK McCORMICK