April 26 2018

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F&I Tactics that Build Service Drive Revenue

By Jim Leman

If you want fast food service, you typically go through the drive-thru or walk in. A few restaurants, Sonic and Chic-Fil-A, do something that harkens back to days gone by when a young person on skates rolls out to your car to take your order, maybe upsell you from a soft drink to a root beer float, and deliver a personalized service. The carhop says “my pleasure” as a practice to maintain their top-rated consumer experience.

Extending F&I out of the traditional office environment and show floor to the service drive is like this. Yes…even the service drive as part of improving the overall customer experience.

Dealers selling F&I products in the service lane create additional opportunity for customer retention, sales, and synergy with the whole department, advises Jim Maxim, Jr., president of MaximTrak, a RouteOne company and chief digital officer for RouteOne.

You might say your advisors are too busy to ask them to carry out additional upsell responsibilities to their day, but for that to be correct, they’d need to be functioning at 100% capacity while holding your effective labor rate. Anything less means time isn’t being used as profitability as it could be.

Service consultant Mike Volkman says that level of consistent advisor performance doesn’t happen, and furthermore, he says most advisors are asked to service so many customers a day that they too waste the opportunity to add more profit than they are to the business.

He advocates, as a response, that managers schedule service to give advisors more time between customers. He defends that advisors be responsible for servicing no more than 15 repair orders per shift.

Using the standard scheduling math shows the opportunity: 8 hours a day x 60 minutes equal 480 minutes divided by 15 is 32 minutes available per customer. By keeping to no more than 15 (20 maximum) R.O.s each advisor per day, advisors have a half hour with each customer for explaining inspection results, discussing repair and maintenance options, offering to upsell and cross-sell considerations, and, increasingly, to present and sell F&I aftermarket products.

“Part of your market for F&I products presented in the drive are those customers who declined to purchase aftermarket products in the F&I office when buying their vehicle,” Maxim adds. He advises dealers and their service managers equip advisors with brochures and point-of-sale tools available and nearby for presenting and explaining these products. “Cross-department selling like this helps build experience cohesion and brand consistency and strengthens the customer relationship and retention,” Maxim says.

Sell from strength

Some have said that advisors should be a dealership’s front-line retention ambassadors. Service engages more people in a day than most showroom personnel will in a week, so their potential contribution as goodwill messengers and revenue generators are excellent.

Maxim points out advisors are more effective when they understand the consumer value of what they sell or will present to customers can be more productive. “Customers first need to ‘see’ the value of the products or services an advisor is talking to them about, whether the product is prepaid maintenance, service contracts, tire and wheel programs, or other items that do add value to their lives,” he says.

Making sure advisors have brochures and other documents on hand to inform customers about F&I products is a must, but technology tools can do a better job of engaging these customers. For example, Maxim notes, digital presentation tools viewable on the advisor’s tablet or smartphone invites customers to select product options and pricing on e-menu-type screens with transaction data customized for that customer’s specific vehicle and interests.

For the advisor, these presentation tools offer a unique and robust method for enhancing the dealership’s value to customers by maximizing, at the moment of repair, upsells to accessories, parts, services, and aftermarket protection products  – all while reinforcing the relationship with their valuable customers.

Service F&I drives revenue

Increasingly, selling F&I in service is a growing opportunity to build retention that translates into repeat vehicle purchasers, notes Ryan Williams, president of prepaid maintenance provider Fidelis PPM. The company recently announced two new retention services designed for both franchise and independent dealers to increase their repair traffic volume and improve retention.

For example, advisors at Town Center Nissan in the suburban Atlanta sell a prepaid maintenance benefit – synthetic oil change, tire rotation, multipoint inspection, and car wash. Six advisors there sell about 160 PPMs each a month. Their closing rate is 90% of customers driving vehicles having 30,000 to 60,000 miles, says Rick Mathis, parts and service director.

The dealership brands its PPM the VIP Service. It features a $219 retail value of routine maintenance services discounted to $119. Its redemption by customers is contributing to increases in both retention and customer-pay business, says Mathis, noting CP repair order count is up 8% and CP labor sales up 12% over a year ago.

“Advisors have embraced the program – and having been an advisor I know it’s hard to get an advisor to embrace much – but they truly enjoy selling this PPM program,” Mathis says.

To encourage how advisors engagement customers regarding plan sales, the dealership provides advisors opportunity to increase monthly compensation by $400 each through spiffs on PPM sales it funds from internal set-aside monies.

Independent-BHPH retention

Fidelis PPM recently announced two new prepaid maintenance programs to help dealers sell more of these products and strengthen plan holders retention to your dealership. Williams says the first new product is the company’s traditional plan – typically oil services, tire rotation, fluid services, whatever routine maintenance the dealer finds attractive to his or her market – a coverage-rich service agreement featuring a vehicle interior and exterior appearance and preservation package.

Independent dealers with onsite repair facilities should find this product helps drive repair business volume while it builds a plan holder’s service habit with the dealership that translates into future vehicle purchases.

This F&I product, he says, whether sold at vehicle purchase time or to catch those customers who perhaps passed on the offer then – or who have only their vehicle serviced at the dealership – help dealers capture more service business while building retention and loyalty.

So how does management implement a service drive program like this and measure the results? First, advisors or, for independent dealers their repair techs, must work from a scheduling volume that permits more time between customers. Second, require the use of F&I menu-selling tools in the lane from which advisors can present and sell aftermarket product options and prices; and third, measure results through a reporting system.

Ask F&I providers how they can help you measure service drive F&I program presentation, penetration, and performance. Can they help you market F&I products to customers via email or postal mail – and with products like prepaid maintenance, do they provide your customers using the plan how it is saving them money over your retail price for those same services.