As competition in the automotive industry grows increasingly fierce, more and more industry professionals are looking to technology to gain the advantage over their competitors. Foremost among these technology-based strategies is electronic contracting (e-contracting), which has been steadily gaining momentum among auto lenders and dealers in recent years.
Given the disparity in lenders’ considerations, customers who fit the general nonprime category can’t be defined by a credit score alone. A better way to identify a nonprime customer is to look at his or her credit report. Customers who have experienced one or more of the following events are often good candidates to refer to a secondary lender:
Given the credit characteristics of many consumers today, you’ve probably worked with customers with credit problems. The epidemic of late payment histories and other credit issues has only grown more commonplace in the recent economic downturn, making nonprime more vital than ever to the financial health of a dealership. If you only serve these so-called nonprime customers as an afterthought, or try to make them fit the mold of a prime customer, it’s more than likely that you’re not realizing the profit potential of these deals. This is an important market for dealers to infiltrate due to its unprecedented growth (estimated at close to $100 billion by some experts), which has increased exponentially in the recent economic downturn.
The manufacturer has a very different view of CSI. The manufacturer, as opposed to the dealer, must be concerned about the value of its products and services to a much wider audience: not only all the customers that consume the products, but also all the dealers that represent the manufacturer and the stock holders that have invested in the company.
Given the absence of product loyalty in the marketplace and intense competition, brand image in the public domain is of paramount importance. A manufacturer can no longer rely on the historical value of its product. Today’s market is grounded in the consumer mantra, “What have you done for me lately?” In order to ensure the future viability of a specific product the manufacturer must understand what need or void in the marketplace needs to be filled.
Manufacturers spend tens of millions of dollars annually to promote their vehicles and send customers to the dealership. Some manufacturers offer their repeat customers attractive owner loyalty rebates to keep them from switching to another brand.
In the end, it is important to realize that poor performance in the CSI arena is really a wake-up call from the customers. The message must be heeded if the dealership is to understand what customers need and expect. Beyond the short-term ramifications, such as loss of inventory preference, chronically low CSI can lead to even greater long-term damage: loss of customer loyalty. Dealers which fail to respond to their customers’ needs and desires is denying themselves repeat and referral business. To the manufacturers, CSI can guide product development, directly addressing the customers’ needs and desires. This will help ensure a reasonable market share at the time of product release.
It is important to remember that, although CSI quantifies a customer’s individual experience, its influence extends far beyond that single customer-dealer interaction. It holds the dealership accountable for both the positive and negative aspects of a customer’s visit, covering everything from the professionalism of the staff to the quality of the service provided. While many dealers view CSI as a necessary evil, the reality is CSI provides dealerships and manufacturers with the chance to raise the quality of their products and operations. By systematically rating the customers’ opinions, dealers and manufacturers are able to see things from their customers’ point of view. They can then use this insight to guide their operations, training and product development to better suit the needs of the consumer. In other words, CSI is the key to obtaining a greater market share.
CSI is seen as both a blessing and a curse in the automotive industry. It is a way for both automakers and autodealers to identify areas where their performance may be lacking; it also means that the manufacturer or dealer must accept responsibility for any problem areas. With the global automotive market growing increasingly competitive, the balance of power has shifted in favor of the customer. The slightest edge can mean the difference between market dominance and financial disaster. Manufacturers and dealers must respond to the demands of their customers, not just market conditions – hence, CSI’s prevalence as a diagnostic tool for dealership and manufacturer operations.
Finance Manager now must build a rapport with his customer. This includes getting to know the customer by asking questions designed to encourage the customer to talk about himself. This simultaneously reveals the customer’s needs, and helps establish a connection between the customer and the F&I Manager. Expansive questions – those that can’t be answered by a simple yes or no – help speed the process. Reviewing the customer’s purchaser’s statement prior to the consultation gives the F&I Manager a definite advantage in this situation.
The consultation process is an integral part of the F&I sales process. It enables the Finance Manager to effectively “meet and greet” the customer and verify the purchase order. It is also the point at which the Finance Manager can build rapport with the customer and determine his wants and needs in order to dispense professional product guidance. At this crucial juncture in the proceedings, the F&I Manager must be mindful of what he says and how he says it.
1 – Verbal Communication
Verbal – Using professional word tracks designed to achieve specific objectives
Vocal – How the word tracks are delivered – tone, emphasis, inflection
2 – Nonverbal Communication
Body Language – Eye contact, handshake, posture, smile
Appearance – Attire, grooming, cleanliness, professionalism
Interestingly, it is nonverbal communication that often has the greatest impact on the customer’s rapport with the F&I Manager. While what the F&I Manager says is important, especially when explaining the particulars of the transaction or the value of an aftermarket product, the way in which he says it will have a greater influence on the customer. Careful word tracks and effective delivery will be sabotaged if the customer is receiving contradictory nonverbal cues.
Your attitude toward yourself and your customers is critical to your success. Attitude influences our behavior and our actions, and ultimately defines what we can or cannot do. Once a negative attitude takes hold, success becomes an uphill battle. Much like a disease, a negative attitude can become a chronic problem, constantly eating away at your success. You become programmed to accept losing. Unless you break free of that cycle of negativity, you simply cannot succeed. Toward that end, it is essential that you leave personal and other problems at home. Customers don’t want to know about them – they want to interact with someone who is knowledgeable, and who exudes professionalism.
In business, image is everything. Your customers will make assumptions about you based on your image. If you look professional, they will see you as professional. This positive image sets the stage for sales success. Remember: you never get a second chance to make a first impression. The same hold true for the product as well, which is why the presentation should be polished and informative. Factors essential to creating a successful overall image include the quality of your wardrobe, grooming, politeness, voice, size, posture, body language, etc.
With the advent of every new year, most of us make new resolutions. Usually, they involve something that might improve our health: we will lose ten pounds (or more!), or cut out fried foods, or cut down on coffee, or quit smoking, or exercise more. Over the years, unfortunately, we’ve learned that our resolutions are made to be broken. No one holds us accountable for our failure to keep them. When no one cares about our success in such matters, we become lax in our efforts, and then we cease to put forth any effort at all. Little to nothing is changed. Once again, we settle for the status quo.
Dealerships and managers often make new resolutions, too. But, as happens with our personal ones, they quickly fail. Why? Because they are too general in nature. Because they are seldom written down or discussed or taken seriously. And, because no one holds anyone accountable for their achievement. Dealers, sales and finance managers say, “Let’s all work harder this year. Let’s sell more cars. Let’s sell more products. Let’s see if we can go over our quota this month.” Then they nod and initiate enthusiastic high-fives and pat each other on the back. This works . . . for about a minute! Once again, they settle for the status quo.