· 4 locations
· 13 franchises
· Average 450 units/month (new)
· Average $350-$1000 per unit gross (varies according to franchise)
· Approximately 60% financed, 30% leased.
What is your job description?
I recruit, train and build a successful business department for each of our stores as well as establish and maintain the relationships with our vendors. I oversee the business offices at all four of our locations, including our non-prime department.
What is your background?
I started in the automobile business in 1984 as a sales representative. I moved into customer relations manager for a couple of years. What the position entailed was taking all incoming sales calls that came into the dealership and I was paid a commission for getting the customers in off of the phone call. Even then I always had my sights set on the finance & insurance department. After a couple of years in that position, I moved into the position of business manager. When I moved back home after almost six years, I was pretty careful in whom I decided to work for in that I thought I had the experience and background to select the dealership that I wanted to be at. I wanted to be sure that their criteria met what I felt I needed in order to be successful.
When you came on here, did you come on as a business manager?
Started as business manager and then within a short time, based on opportunity, I became what they call a team leader, finance director in 1996 and then at the beginning of this year was awarded the title of vice president, financial services to oversee all our locations.
Michelle, in your opinion, what are the keys to a successful F&I department?
I believe that the keys are to stick to the basics. It's surprising to me when I talk with other business managers in some of the meetings that we have, that a lot of the business offices still don't have the basics down, which goes back to my very first F&I training - a strong policy for turnover, a well-trained business manager, one hundred percent solicitation of products and a system for delivering cars quickly and for tracking performance.
Training is critical.
Absolutely. As a matter of fact, next week we have three business managers attending David Lewis & Associates. We like our business managers to return to the David Lewis class at least once a year and what they've been successful at is to change their program and keep up in the marketplace so that each time the business manager goes, it's not the same old classroom material. It's something different and unique and they always come back with something new.
What is the primary responsibility of your F&I managers?
That one, too, I think is pretty simple and that is to service the sales staff in delivering cars as soon as possible and to maximize the profit on each deal.
What do you look for in an F&I manager or prospective F&I manager? What do they have to possess?
They have to have salesmanship, a strong ability to think on their feet, to pay attention to detail, to problem solve and they must be proactive, because the position is a manager's position.
And what do you think they should not have? What makes it that you say this person would not make a good F&I manager?
That's a good question because in a lot of cases it's a successful salesperson who's interested in F&I and they can't get used to being behind a desk. They don't have the mobility that they had on the sales floor. Plus, they have to be team oriented. I find there are some sales individuals or candidates for F&I who prefer to work on their own and that generally isn't going to lead to a successful long-term career as a business manager.
What percentage of your F&I managers were promoted from within the dealer group and what percent came from outside, approximately?
Promoting from within is always our first choice. Throughout my tenure here, I would say probably 60% were promoted from within. That might sound a little low, based on the fact that our primary goal is to promote from within, but it's that way because we also believe strongly in recruiting from colleges for our candidates. The majority of the balance of that percentage is going to be individuals that we have recruited from college campuses and brought into the industry and trained for a career in finance & insurance.
For the people who are recruited from outside, did they train and immediately start working as a business manager? What is the process for them?
We have a proven training program with a track record of success with these individuals. I would say it's even a higher level of success than promoting from within, because we have basically a two to three year training program where the individual comes on board and has limited responsibilities as their training program grows. That was the basics of F&I and I generally say it takes about six months to be able to have encountered every situation and to have some good numbers established as a business manager. So we have an initial training program with them where we just stick with the basics of the business office and train them.
Are they performing the job functions while they are learning?
Initially, for the first two weeks in the training program we break down each process in the business office and we will teach a skill, we'll role-play that skill and then they will actually take on that action. I might teach something as simple as calling to get a payoff and then we'll role-play it by actually doing one together and then they might do a few payoffs. And, of course, the main focus would be to train them on taking a turnover and we'll start with a simpler transaction and then we'll break down and might do a finance, we might do a lease transaction, we might do a cash transaction, then we'll train on that aspect of it, role-play through that and then actually take a turnover on that transaction. In those two weeks I also bring in the representatives of our different products so that the individual is not just getting my perspective of that product, they are also getting the representative's input too. So we train on the product, we train on the paperwork, we train on the process and overcoming objections in a two-week program. It generally takes about six months for them to master the basics and then slowly going into the second year, they get more responsibility within the department and going into the third year as well. So it's really a three-year program where we bring them in, their responsibility level grows as their performance level grows. And then their income grows as well.
What specific things do you do to keep things running smoothly between the F&I department and the sales department?
I like that question because that is the one that is probably the most consistently the challenge. It is also the most important. We find that good communication is the key and a lot of times it does boil down to Scott (V.P. of Sales) and I just being able to sit with the sales managers each morning in a meeting with the sales department and any communication or agenda that comes up, we're able to address. Probably the biggest factor other than that is that the business managers participate in the weekly sales meetings. Everybody likes to be informed and up-to-date on what's going on. The more that the business office can keep the salespeople informed of their deals and their transactions, the more the sales department can let us know what's going on with their deals and transactions.
How has the internet affected your F&I departments?
We have seen, probably within the last year, some effect as far as customers getting information concerning automobile loans off the internet and in most cases they are bringing that information to us and we're able to review the choices with them as if we would any other source.
But to this point, not really much of an affect at all on your business?
Nothing significant right now.
Do you expect that to change any in the future?
I think so. In a couple of ways I think it's going to be a positive affect for two reasons. I always find that a consumer with the information is always a plus. It's really how we use it. The customer gets here and we know what our competition is. The other thing that I think will be a plus is the technology. With my involvement in the sub-prime department, the sub-prime technology that's available for the dealership's use is well beyond the technology that's available for the conventional F&I today. I can see the business managers in the near future having a PC with internet prices on their desk as opposed to just a software program or a glorified typewriter that allows them to print the contracts. A PC that enables them to be able to get information from some of the different sources and take advantage of some of the technology that we are starting to see for the conventional.
Michele, you are responsible for both the prime and non-prime and DEALER magazine has advocated a separate department for sub-prime. How are you set up?
We're behind the theory that we should have a separate sub-prime department, however, I think we have a unique twist to that. We have one special finance department that services all four of our locations. We also have a bank portfolio manager and that individual takes the deals that are turned down at our locations daily and rehashes them to gain the approval. His office is right next door to our sub-prime or special finance manager's office, so each morning, generally twice a day, they are both looking at and, if you will, they are both in competition for that deal to see who can get it approved the quickest. We're working towards a seamless process between a deal that's turned down conventionally and one that goes special.
Seamless to the customer.
Exactly. The customer is told within that day that they have an approval and to come and pick up their vehicle.
What one piece of advice would you give to dealers who want to maximize their F&I departments?
I would say to get involved. I find that generally, a dealer knows how many vehicles were sold that day, how many phone ups, how many appointments, but do they know the answers to the question every day in F&I, how much gross was generated that day? It's surprising that in my conversations with business managers that isn't the case and therefore, two to three hundred dollars a car is considered acceptable and a good job. I would say get involved would be the number one piece of advice that I would have.
And how will that make things different? How should they get involved and what exactly will that do?
By getting involved and finding out where their business office is currently. The key to a successful F&I department is getting back to the basics, a strong turnover policy, which has to come from the commitment of the dealer. The dealer can provide the training for the business managers that's needed, a 100% solicitation of the products, a good system for delivering the cars quickly and a system for tracking the business managers performance. But by getting involved in finding out where the business office stands currently and then going back to the basics of what will make for a successful F&I department, the dealer can provide what the business office needs to be successful.
I take that to mean that the F&I managers really shouldn't be depended on to make the overall F&I operation successful, they should be depended on to perform the functions of getting the deals bought and getting the turnovers done properly, but somebody has to oversee them.
I would agree with that. To simply meet with that business manager on a consistent basis, to be able to have a report turned in that tells you where the business manager is that day, where the automobile deliveries are that day. That reporting to somebody is important, whether it be directly to the dealer, to the general sales manager or to a finance director.
It's a proven fact that just measuring performance improves performance.
There are a lot of systems for selling automobiles which then allow you to track performance. The same is crucial for the business office and that is to have a system in place to track the performance and measure it and then that allows you to be able to improve it and set goals.
Any final tips for our dealer readers?
Going back several years ago in the business office, we used to be able to capture someone's loan or business by letting them know that we were more convenient than any other source that was available to them. I think the big change in the last several years is, no longer are we able to capture someone's loan simply by telling them that we are more convenient. We have to be more convenient and that's doing it right now. That's one of the techniques we learned from David Lewis & Associates that I believe has had the biggest impact on the way we do business.
So as opposed to saying you're more convenient, actually BE more convenient.
Exactly. And hopefully your readers can absorb the importance of that. I think that ties in also to the internet question in that because of the information and speed in which consumers can get their loans approved today, to have the customer come back into your dealership, pick up the car, and do the loan papers for them right then at the time of delivery isn't any more convenient today than any other source that they have available to them. We have to do it right now and show them that we are truly more convienant.