Introducing the new Armour Group blog, where each month we’ll share useful information that will help you drive the performance of your dealership. To kick things off, we’re covering the 4 steps that are practically guaranteed to boost F&I revenue. Strengthen these 4 pillars — the button-up, the menu, your use of visuals, and using a per-diem waiver — and you’ll not only increase revenue but will reinforce what is an important business generator in your dealership.
You’ve worked with the customer, you’ve built the relationship, they’re in love with the vehicle, and you’re about to make the sale. Now’s the time to go that extra mile and apply a bit of extra rigor in your F&I presentation.
Specifically, we’re talking about 4 steps that, when practiced and diligently applied, will not only make the handoff from sales to F&I smoother, but are practically guaranteed to increase your revenue.
#1: The button-up
To properly protect the vehicle, you need to know how it’s going to be used and driven — i.e. the where? / why? / how? of the purchase. While specific questions may vary depending on your dealership, demographic, and sales processes, it’s vital to establish a robust button-up strategy that will get you the information you need — but will also maintain the customer’s comfort and deliver the best possible experience.
Keeping the customer comfortable, and leveraging the relationship already built with the salesperson, is crucial to the button-up’s success. For that reason, it’s essential that F&I join the customer at the sales desk, rather than moving the customer to F&I (this only increases their anxiety). And throughout the process, always keep the conversation just that — conversational.
#2: The menu
Taking a menu approach to the product presentation is a game-changer. A clear, three-column menu—good, better, best—provides the customer with options (especially appealing to Canadian buyers) while simplifying and ensuring consistency. And it makes the process faster, addressing what is often the #1 complaint about F&I: that it takes too long.
Of course, specific content within the menu must be tailored to your dealership’s products and demographics, as well as regional psychology — for instance, the fact that Canadians like to follow the pack. Taking all these factors into account, a well-crafted menu strategy is perhaps the biggest driver of revenue lift.
#3: Use visuals
Humans are visual creatures: 90% of the information transmitted to our brains is visual, and we process visual information 60,000 times faster than text. So it follows that presenting information in a visual context will have a greater impact — and better results — than simply spelling it out. That means using plenty of well-designed, client-focused information and tools that clearly show the customer, for example, how their beautiful new vehicle is going to depreciate—underscoring the need for guaranteed asset protection (GAP).
Remember, too, that this is a point at which the customer is being inundated with information. Any tools that can help you cut through the “noise” will help inform the customer, which in turn will put them at ease and win their trust.
#4: Use a waiver with per diem pricing
Here’s a pop quiz: What percentage of customers typically agree to an upsell from a waiver? 10%? 15%? 20%? Or 30%? Yes, a per diem waiver increases lift by a whopping 30%. The fact is that when the cost of insurance is translated into a daily expense — and compared with other much higher daily expenses (like the customer’s morning Starbucks and evening takeout) — the insurance becomes much more manageable.
F&I is a critical revenue engine for your dealership. So don’t sell it short. Invest in it and support it. The results will be more than worth it. Here’s what some of our clients have shared with us after applying these processes:
- “It facilitates a smooth turnover from sales to F&I and it incorporates psychology into the presentation…. Our customers feel like they are choosing to buy vs being sold.”
- “I was a 1,600 per copy business manager…but within one month of switching to the menu I jumped to 2,300 per copy.”
- “We saw our average income on new vehicles rise over $500 per car, and over $300 per car on used.”