Defining Job Duties for the F&I Function

Our dealer, sales manager, Steve and I collaborated on clearly defining job duties. We did it for both the Sales Department and the Business Office. The process of getting everyone to “sing out of the same hymnal” is not an easy task — especially when it requires the cooperation of the sales force.
Duties for The Floor Salesperson
We decided on the following duties for a salesperson:
• Settles the customer on the right vehicle, builds value.
• Writes the deal.
• Refers all F&I discussion to the business manager: “Our business manager is a specialist in that area, and he will be happy to go over that with you.”
• Establishes the final price (with management’s assistance).
• Closes the deal (with management approval).
• Briefs the business manager prior to bringing in the customer.
• Introduces the customer to the business manager: “Mr. Customer, this is our business manager, Steve. He’ll be handling the rest of your paperwork for you while I check on your delivery.”

Business Managers Duties
The duties of the business manager are different, including a significant amount of paperwork and follow up. It’s not only a sales function.
• Presents F&I (makes low-key presentation to sell financing, credit life and disability insurance, extended protection and maintenance plans, vehicle insurance and other products).
• Completes paperwork and gives full disclosure.
• Calls lender and personally takes call-backs. (Note: If a customer is rejected, the business manager asks what the customer needs to qualify for the vehicle loan.)
• Notifies salesperson of lender’s response. (Note: If the response is negative, every possible effort is made to arrive at an acceptable deal. This can include more cash down, obtaining a co-buyer, using secondary lending sources, switching to a less expensive model, etc.)
• Verifies that the customer has casualty insurance before delivery.

Utilizing A New Face To Sell F&I
At our dealership, salespeople were not permitted to sell F&I products. Our dealer believed that building value was the salesperson’s primary objective. This meant selling yourself, selling the product and selling the dealership. Price discussion must be deferred until the customer is settled on the right vehicle. He would preach to the sales force, “Talk product on your feet, price on your seat.”
After a salesperson sits the customer down, the deal is consummated with the help of sales management. It is at this moment that the customer is introduced to the business manager. Our dealer believed that F&I products must be introduced and sold by a “new face.” In other words, F&I products must be sold after the sale and by a different person!

What Salespeople Say About F&I
Steve was a real stickler when it came to what others said about F&I. He knew that one wrong move and his F&I opportunities could be ruined. He felt that the sales staff must be schooled on what to say and what not to say to the customer. For example, if customers ask about extended protection plans, salespeople should say: “Yes, we offer extended protection. It’s a terrific program. Our business manager is an expert, and she will be happy to go over that with you.”
Another example of sales support for the Business Office is when the salesperson says: “I’m glad that you asked about our payment protection program. This is something you are definitely going to want. Our business managers are experts in that field and they will be happy to go over that with you in a few minutes.”
Many times customers will ask salespeople questions about finance rate and term. Salespeople should support the Business Office by replying: “Mr. Customer, term and finance rates fluctuate depending on the customer’s credit worthiness. Our business manager will counsel you and give you all the details you need.”

Selling F&I
The salesperson should leave it at that and say no more. You have planted the seed for the Business Office to harvest. Let it take root.
Now, let’s examine in more detail the activities of the salesperson regarding F&I and the ways to develop the compensation package for those involved in F&I.
It’s important to recognize that some salespeople have been known to “lock-out” the Business Office. They will actually say something like, “Harry, you’ve been a customer for a long time and I appreciate your business. Listen, I have to introduce you to the Business Office and they are going to try to sell you some stuff. It’s all optional, so don’t worry. You don’t have to buy any of it.”
Salespeople who “lock-out” the Business Office are apprehensive about turning their valued customers to the business manager for these reasons:
• They don’t believe in the F&I products.
• They fear that the business manager will blow their deal.
• Some salespeople don’t respect or have confidence in their business managers.
• Some salespeople think they are doing the customer a favor.

Compensating Salespeople For F&I
Our dealer designed an F&I incentive plan to solve the problem of a negative attitude toward F&I by our salespeople. He let Steve give our salespeople a small bonus for “shutting up” and letting the Business Office do its job. Our salespeople could earn a few dollars for every credit insurance and extended protection policy the business manager sold. This ensured that customers would be properly referred to the business manager.
As the business manager, Steve participated in every sales meeting. He would give out an F&I spiff check to each salesperson and personally thank them for their teamwork. It did wonders for getting the salesperson’s cooperation.
After Steve got the sales force’s attention with money, he would coach them on what to say and what not to say about F&I. He knew that smart salespeople said very little, and would refer questions to the business manager. This made Steve’s F&I job much easier.

Compensating Business Managers
Dealers are constantly asking me, “How should I pay my business manager.” How you compensate a business manager will depend on the following:
• Do you have a turn-over problem with business managers?
• How difficult would it be to replace your business manager?
• Are your vehicle sales highly seasonal?
• What are your business manager’s other duties (besides F&I)?
• What is considered good wages in your area?
• How much are other business managers paid in your market area?
• What experience and training has your business manager had?
• What kind of results are you getting from your business manager?
Steve and I were paid (a) a small salary, (b) a percentage of the total F&I income, (c) a small percentage of the Sales Department’s total gross profit, and (d) special monthly bonuses (spiffs) for a job well done.
The spiffs changed from month-to-month depending on where our dealer wanted concentration. If one month he wanted a big push for extended protection, he would give a special incentive. The next month he might tie incentives to joint-life insurance. It was always a different item and always for a specified period of time.
The next question dealers constantly ask is, “What percentage of the F&I income should I pay?” This depends on some of the factors listed above. The cost of living in your area is an important consideration.
In one of my seminars, a dealer mentioned that he paid his business manager a huge percentage of all the F&I income. Everyone in the room was shocked at his generous pay plan.
Then he explained that (a) he had hired the strongest business manager with the highest penetrations in his state, (b) that person was licensed to sell insurance, (c) that person had a pay deduction for all charge-backs (early payoffs, insurance cancellations, etc.), (d) before hiring him, the dealer’s F&I sales were almost non-existent, and (e) the highly paid business manager was getting results beyond expectations!
I encourage you to design your own job descriptions. A remarkable improvement in morale and productivity takes place when people understand their duties. Also, review the policies and procedures that support these duties and select the areas that are consistent with your dealership’s situation and personality. I am certain your efforts will see results.

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