by JM&A Group

Modern dealerships rely on every department to drive profitability and enhance the customer experience. Your sales and F&I staff should be skilled at making handoffs during the sales process to ensure the customers convenience. This is especially important to practice when the interaction takes place online.

With inventory shortages abound and consumer expectations higher than ever, dealerships must give equal weight to all service centers and profit drivers to maintain their competitive advantage. Service pipeline alignment can create a streamlined end-to-end buying experience, allowing F&I and fixed ops professionals to play a more active role in the sales process.

For the best results, dealerships should prioritize these five improvement areas:

By taking a closer look at the five critical revenue acceleration areas for 2021 and beyond, you can envision how they fit into your plans. The right combination of these priorities can lock in reliable revenue growth, keeping your dealership thriving.

Improvement Area 1

Finance and Insurance

F&I is a reliable value center for auto dealerships. Even in the midst of inventory shortages, finance and insurance offerings remain strong, enduring sources of revenue by helping dealerships:

How to improve your performance

One way to lock in value in the F&I department is optimizing the mixture of products available through your dealership. When your people are selling F&I products that deliver clear advantages for the customer, they are not only increasing revenue, they are building those buyers’ satisfaction and loyalty, which is a long-term path to value.

Your F&I team can reach new levels of success by integrating customer-friendly innovations such as virtual F&I into their workflows. With the technology and processes in place to support VFI meetings, your F&I Managers can give customers a smooth, digitally enabled, omnichannel buying experience that may lower their stress and encourage them to buy.

Enhancing the way you track F&I sales can have a big impact as well. More data means you can focus closely on both individual performance to develop improvement plans tailored to each employee, as well as determine which products are your most reliable sources of revenue. Experts can assist your team in both these avenues using daily progress reports to get an extremely granular look at your F&I department’s performance and potential.

Focusing on F&I can and should also mean putting increased emphasis on compliance. Especially in the age of connected data, it’s critical that you and your dealership staff are aware of the laws and regulations that impact you and especially your customers.* The best way to protect your business and reduce your risk is through comprehensive training and employee development courses.

*Consult your dealer counsel and dealer association for information on your state’s regulatory requirements.

Resources

Check out our resources on offsetting margin compression and VFI best practices to change your F&I performance for the better.

 

Improvement Area 2

Fixed Operations

When looking for sources of revenue to enhance your bottom line in 2022, fixed operations is a clear choice.

Limited inventory and prices above MSRP can create friction during the buying process, so it’s vital to focus on improving the overall customer experience and building trust and loyalty.

How to improve your performance

Rethinking the workflows behind the service lane and other fixed operations centers is the best way to solidify your revenue from these functions. At their heart, these roles are about customer service and creating a positive experience. Tracking key performance indicators and implementing coaching programs based on creating great customer care is, therefore, a good fixed operations tactic.

It pays to have specialized plans in place for developing service department leadership. These supervisors will set the tone for process improvement in fixed operations, and having their buy-in allows progress to take hold. When the day-to-day leaders of a department are agents of positive change, that’s when transformation becomes permanent and sustainable.

A revamped fixed operations department will sport transparent policies that build trust and loyalty among customers.

With people eager to engage with service departments at the dealership of purchase — especially for more technologically advanced new cars — you have a readymade audience for the fixed operations personnel to serve. With a new workflow in place, these shoppers will stay with your dealership for the long haul.

74% of buyers who receive service where they bought their cars say they’re likely to buy their next car there.

Not only should fixed operations procedures be designed with customer comfort in mind, but they should also be standardized, quantified and repeatable. You should take a scientific and exacting approach to process improvement in the service lane. The results, in the form of solid ongoing revenue, make the effort worthwhile.

Improvement Area 3

Recruitment and Retention

Recruiting and retaining great team members is an evergreen concern for dealerships, and it’s especially true now because of the shift in customer and employee expectations. Optimizing your talent pipeline is necessary for breaking the turnover cycle.

How to improve your performance

Every step of the talent pipeline is ripe for optimization. This starts at the very beginning with searching for ideal candidates. Your talent searching strategy should be closely aligned with your dealership’s overall business goals to ensure the people coming in for interviews have skills and backgrounds that match your specific objectives regarding sales processes and the customer experience.

Of course, no employee comes to a company fully formed. Building skill and productivity over time can be a matter of personalized coaching, with processes designed to match the team’s needs regarding onboarding, team building, personal development and longterm retention.

A modern approach to talent development is based on science and numbers, no hunches required. By calculating key performance indicators relevant to employee contributions, you can make sure your personnel have opportunities to grow and to stay engaged with their work. As their skills develop and their value to the team increases, you can watch that ROI grow.

A great employee is someone who comes into the team ready to contribute yet gets better over time through a mix of training, development and collaborating with teammates across departments. By bringing out the best in your talent and holding onto top performers for years, you boost the bottom line through their contributions and eliminate the cost center of constant talent searching.

 

Improvement Area 4

Insurance and Risk Management

From the pandemic to supply chain disruptions, dealerships have (hopefully) learned to expect the unexpected. Actively anticipating what could be around the next corner will continue to be important in 2022 and beyond. The right mix of insurance and risk management programs can decrease the strain of a number of challenges auto dealerships face. Taking a close look at your options can have a significant and positive effect on your risk management efforts as well as employee retention.

How to improve your performance

Your dealership has a few specialized insurance and risk management requirements that go beyond those of other businesses outside of the automotive sector. This means you should find a specialized coverage provider that can provide the insurance plans and products reflecting your operations.

A great first step to improving your insurance and risk posture is to assess your needs. A comprehensive examination of your business will reveal opportunities to reduce your risk and defend the bottom line, whether that means purchasing a garage liability policy for vehicles on your lot or taking a look at plans that will help you hire and retain top talent.

Some of the most impactful insurance products for your dealership are the plans you offer your employees. Dealing with turnover is one of the most common problems facing the auto sector, and it has been for years. One way to secure loyalty is to offer affordable, flexible benefits packages that will make people want to stay. From 401Ks to health, dental, life and optional coverage plans such as 529 College Plans, you can build a mix that appeals to your workers.

Insurance and risk management have the potential to go overlooked in dealership improvement strategies, but this shouldn’t be the case. If you put extra effort into creating the perfect mix of products for your business, you can build a more secure and reliable operation, one with appeal to its employees and resilience against potential problems.

 

Improvement Area 5

Training and Development

Just because demand for vehicles is high doesn’t mean sales are a piece of cake. Due to low inventory, many consumers will be looking at vehicles they’re not thrilled about, and that requires a different sales approach than selling someone their dream car. You may need to adjust your sales team’s training to account for the challenges that come along with very low inventory.

Plus, with the rise of omnichannel retail, your talent will need more than traditional sales skills. You’ll need to train your team members to provide the best possible customer experience — both online and in person.

How to improve your performance

Whether you’re engaging in full instructor-led training courses, online learning modules or a hybrid program, you should make sure your materials of choice are tailored by function, or even by individual. No two people are the same, even if they hold the exact same job description. By investing in employee education that is highly personalized, you can unlock extra value.

Your salespeople play a vital role in your dealership’s profitability and financial growth, so investing in their success and developing their skills is key. And we’re not talking about the standardized materials of the past. Effective training solutions have stepped into the modern world, offering both in-person and virtual courses that are customized to your needs to ensure their effectiveness in the short- and long-term.

Your team members shouldn’t just train, they should cross-train. While it’s important for every staff member to know the ins and outs of their own department, it’s not good to develop tunnel vision. If employees in each department know how their own products and services fit into the overall sales cycle, exciting new revenue opportunities open up:

One of the main ways your dealership can present a unique value proposition is to provide a great experience for your customers. Despite the rise of digitization, automotive sales, financing and service are still person-to-person experiences. If your staff has been better trained and prepared than competitors’ teams, that will be reflected in the way your customers perceive the dealership.