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In several blog posts I wrote for NCM this past year, I touched on a subject that garnered quite a large reaction: Gen Y —or Millennials — and the way they want to buy cars versus the way car dealers have always sold them in the past.
I found people coming down hard on both sides of the debate: to change the automotive dealership to suit this new generation, or do things the way they have always been done, and trust that the new buyers will adapt. Both sides have passionate arguments, but let me say up front: I believe that if we as an industry don’t change, the buyers will take their money somewhere else. You might believe they have no other options, but services such as Uber and Lyft that allow users to share rides with each other, or Zipcar, that gives them the option to rent vehicles on an hourly basis, not to mention growing pushes for better public transportation in many major urban and suburban areas, mean that Gen Y is already putting an infrastructure into place that will make owning a car less necessary.
And since this generation of buyers is expected to make up 40% or more of the purchasing population by 2020, car dealers need to figure out how to better reach these customers now, when there is time to build brand loyalty, as well as instill the benefits of car ownership.
The biggest hurdle dealers face when it comes to Gen Y buyers is the amount of time it takes to get them in, get the necessary selling and paperwork done, and get them out again in their new vehicle. We don’t need to reinvent the wheel, we just need to refine it. And one area I passionately believe all dealers can be doing a better job — and not just for Gen Y, but for all buyers — is in F&I.
There are a variety of reasons customers get bogged down in the F&I office, ranging from a poor handoff from sales, to incomplete paperwork, to lengthy sales presentations. There are a variety of ways to streamline the relationship between sales and F&I, making the process smoother not only for the customer, but for the dealership as well. However, the area I’d like to focus on now is streamlining the F&I presentation.
There are quite a few options out there for F&I training, ranging from in-person classes to online options. Most of them focus on a few basic essentials:
- Use a menu system to sell the products.
- Offer every product to every customer
- Keep the number of total products small, so as not to overwhelm
Menu selling has become ubiquitous in the F&I world, but there are still many dealerships out there who have not made the switch. There are also “Lone Ranger” F&I managers who believe they have a better system than the one the dealership has chosen to implement. Every automotive dealer in business today, no matter what size or where you are located, should sit down and chose a menu system that works for your unique needs. And then you need to provide ongoing training to teach your F&I managers how to use the system, and then reinforce that training over time. The goal should be to get a customer in and out of the F&I office in 30 minutes or less.
It won’t happen overnight. You may have to try a few different F&I menu options before you find the one that works best for your dealership. If it currently takes you an hour or more to get a customer in and out of the F&I office, then try setting smaller goals to start, especially as your team gets used to new procedures — try to shave 10 minutes per month off the average time until you are hitting your 30 minute goal, for example. Then recognize and reward the F&I managers and sales people who are doing the best job at using the new tools to encourage everyone to keep learning and using them.
This is where we start when it comes to giving Gen Y a reason to keep enjoying car ownership, and to not only purchase vehicles, but refer the dealerships they bought from to their friends and family. Gen Y can be very brand loyal, and if a car dealership gives them the experience they are looking for, they are going to be far more likely to return to that location for all of their future vehicle needs. This is the kind of customer every automotive dealer dreams of — and all it takes to get there is a willingness to adapt and give them an experience they’ll remember for all the right reasons.