F&I Manager Tips: Hidden Opportunities in the Service Dept

At first glance, the F&I and Service departments may seem worlds apart. Yet, both departments are critical linchpins in connecting car buyers back to the selling dealership. Imagine the effect on customer retention, service revenue and repeat sales if they worked together?

Often, different departments don’t naturally work together. Each can have its own silo focused on its own goals. Yet, breaking down walls can positively affect the customer experience, employee income and the overall revenue of the store. And it can be done without overhauling processes and instead by introducing small steps that can really add up.

Time in the Drive

During the week, F&I Managers generally don’t spend time with customers in the morning because the Sales department gets busier as the day goes on. This downtime can be well spent in the service drive scouting opportunities.

For example, look at that day’s appointments, review what products customers currently own, discover cars coming off warranty, and pinpoint orphan owners who bought elsewhere and may benefit from protection products.

Service customers offer the potential for the F&I Manager to reintroduce products that were previously declined or not initially offered. Remember these customers are in for a repair or service; the vehicle isn’t brand-new anymore. Drive time may have revealed unforeseen costs that the customer now wants to protect against in the future.

Time in the drive also gives F&I Managers the opportunity to see firsthand the issues that are reoccurring, which can help them hone presentation skills during the F&I sales process.

Benefit All Around

What products the F&I Manager sells benefit not just the manager, but commission-based Service departments and the store overall.

Take vehicle service contracts, for example. For every service contract sold, there’s an upfront number that counts toward the manager’s profit per vehicle sold (PVR) but that’s not all.

Let’s say the manager sells 100 service contracts and 60% of those customers return to the Service department with an average claim of $500. That equals $30,000 in additional claims yield revenue for the dealership and the Service Advisor receives commission.

Team Up for Customer Retention

When F&I and Service team up, they can create a closed-loop system of customer retention and revenue. Two scenarios illustrate this point. Let’s say a needed repair is costlier than the customer anticipated. The Service Advisor can acknowledge the expense, explain that a viable option is to get preapproved for a new car instead of paying to keep an older one running and then introduce the customer to the F&I Manager.

The customer gets financing, buys a new car, opts for a vehicle service contract, and brings the vehicle back for service claims — potentially also buying additional services offered in the lane. The loop can continue for the life of vehicle ownership and into the next vehicle purchase.

In the second scenario, the Service Advisor notes a vehicle warranty is almost over and suggests extending it with a vehicle service contract. The F&I Manager takes over, sells the contract, the customer returns for service, and the loop continues.

Of course, not every customer will return to the selling dealership for service but it’s likely a good percentage will. That’s the beginning of creating long-term relationships that lead to strong customer retention.

It’s worth noting that a loop of customer retention must be based on sound business practices that put the customers’ needs first. If customers feel pushed into products or manipulated in any way, the whole thing will fall apart.

A great customer experience is based on uncovering needs and recommending the best products, services and vehicles to meet those needs.

Reward Team Players

What would a Service Advisor pay plan that’s aligned with departments working together look like? A dealership can put a process in place where Service Advisors, who set up customer meetings with the F&I Manager, are paid a spiff for every meeting. Or the Service Advisor receives a monthly bonus based on the number of meetings arranged.

When Service Advisors are motivated to introduce appropriate F&I products, this step becomes a part of their talk track when checking in customers. The F&I and Service departments may seem worlds apart, but there are plenty of opportunities to work together to benefit each department and the entire dealership.

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