The Hottest F&I Debates
Now that election season is over, debates have moved off the political stage and into the business realm. As technology changes, the F&I industry has found itself in the midst of several debates about how best to sell to customers. Two particular debates have caught the attention of the industry. Should dealerships use tablet or paper menus? And should dealerships interview their customers in order to better understand them? The answer to these questions might be wrapped up in a bigger question:
Are we willing to embrace the future of the automotive industry in general?
Tablet vs. Paper Menus
The debate over tablet or paper menus lies in the simple technology. But it also speaks to the greater debate about what customers want — and whether dealers are willing to change to better suit their customers’ wants. Some dealers argue that paper menus are still the better option for the dealership because of their customers. As you can imagine, these arguments are made where the customer base is largely rural and generally older. However, these consumers are interacting with newer, more interactive technology outside of the automotive industry on a daily basis: at the grocery store, the hardware store, at restaurants and more. In fact, the percent of 55-64 year olds who use tablets is only one percent less than the Millennial population at 60 percent.1 The argument is that their customers would be uncomfortable with advanced technology, but the outside exposure is happening at such a rapid pace, finance managers have been surprised at how well versed their customer base truly is
In addition, dealers are constantly searching for ways to better serve their customers. A whopping 94 percent of companies see “higher engagement and conversion rates” by committing to the customer experience. The F&I process tends to have the most negative effect on CSI scores, so leveraging a tool that is customizable, efficient and simple puts the customer at the center of the experience. Tablets benefit the dealer as well — on average, F&I salespeople save 5-15 minutes per deal using a tablet menu versus a paper one. And the best F&I managers take it one step further: they’re offering a level of flexibility based on the customer, presenting on paper, tablet, text or desktop.
To Interview or Not to Interview?
The other debate occupying the minds of F&I managers is whether or not dealers should “interview” customers about their habits and preferences in order to get a better understanding of their needs. By using this information with menus that use prescriptive selling, dealers could provide the packages customers would be most interested in and more likely to purchase. However, some dealers are concerned that asking for such information would be intrusive and would undermine the trust shared between dealer and customer. Some also argue that customers object to the line of questioning as they “know they’re about to be sold something”.
With the rise of retailers, like Amazon and Nordstrom, offering personalized experiences, consumers have come to expect that same level of ease and personalization when they buy a vehicle. According to Swirl Networks, 88 percent of consumers say they’re more likely to shop with retailers that deliver personalized and connected cross-channel experiences. And many are looking to go one step further – 56 percent of consumers would buy F&I products online while starting their purchase journey on a dealership website.2
The saying “The Customer is King” continues to be true, and it’s just as true in F&I as it is in the rest of the business. Placing the customer at the center of the experience is essential to success. Providing efficient, simple tools and personalizing the experience are two great ways to do so. Both of the debates at hand lie in what the customers truly want. The difference in which dealers will be successful will depend on which dealers are really listening to their customers and changing to fit their needs.
Want to embrace cutting-edge technology that better serves both you and your customers? Learn more about prescriptive selling with CDK MenuVantage Platinum.
1eMarketer, Aug 2016 2Root and Associates, June 2016