Calculation Losses

Calculating losses
Many dealers have no idea what they’re sacrificing by not properly approaching their F&I business. Such is not the case, however, with Port Harbor Marine.

This South Portland, Maine-based dealership knows exactly how much it loses in such situations. In fact, by calculating the missed opportunities on financing, service contracts, extended warranties and insurance products, this four-location dealer has calculated that it costs the company roughly $1,300 for every customer that doesn’t get turned over properly to the F&I department. Read that closely. It’s not $1,300 for every customer who does not finance … it’s every customer who is not turned over properly to the F&I department. There’s a big difference.

So President Rob Soucy’s secret to capitalizing on those opportunities is … well, not much of a secret. Port Harbor employs an F&I director who is charged with growing the company’s F&I business.

Additionally, Soucy instituted a process that holds sales people accountable and penalizes them for not properly turning over a customer when a sale is made. The dealer tracks the sales reps and their percentage of “turnovers” to the F&I department. And when the dealership runs a sales contest for its reps, if they don’t have 100-percent turnover, they’re not eligible for rewards. It’s that simple.

After each sale at Port Harbor, a dedicated person from the F&I team meets and greets the new buyer, reviews the sales paperwork and arranges for financing with every customer. This person also presents a folder outlining all sales, delivery and service procedures, introduces a one-year “free” Sea-Tow benefit, discusses the dealer’s free boater education and training classes and explains the process of boat titling, registration and taxes. The F&I representative also offers boat insurance, extended warranty products, and sets a date for final payment and boat delivery. In the end, this dealer’s F&I department accounted for 3.7 percent of total revenue and 25 percent of the company’s net profit.

It’s a system that doesn’t allow missed opportunities.

NOTE: If you’d like to add up your losses, simply take your total annual F&I income and divide it by the number of you total annual closings. This will give you a dollars-per-customer total that will help you understand your missed opportunities.