Is Menu Selling the Best Way to Show Compliance in the Finance Department?
The business manager does not do "menu selling". I was trained to do this type of selling because it allows the customer to look at all the products that the dealer offers. Always offer the same products all the time. Can someone tell me if this is the best way to sell and make sure that compliance is being met? Based on his pru, he is over average compare to other dealerships but I am not sure this is the best way to protect the dealership.
Also, he doesn't meet with the customer after they buy a car. He waits for the day of delivery and then he does the"pitch" only showing what he wants to sell. I always thought that you do a preliminary interview on the showroom floor with the customer. His answer to this is that if the customer gets pitched before picking up their car they have time to think it over and can cancel. How do my fellow professionals feel about this?
Replies to This Discussion
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Permalink Reply by Gene Daughtry on -
I have never heard of a Finance Manager doing an interview prior to the closing. He is right about giving the pitch once at the point of signing. I have never used a menu for closing but it can be an effective tool for consistancy. I haven't been a regular finance manager in 7 years so I may be a little dated.
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Permalink Reply by Jim Dirks on -
I think the "preliminary interview", is over-rated. In my experience, it does more to put a customer into "defense mode", than it does "loads your guns" with ammo to use for overcoming objections.
Is menu the best way to show compliance? Frankly I think not. The BEST way IMHO, is to record each and every delivery. Digital recording the process, gives Sr Management the opportunity to review randomly, the entire process and to bring forward little things they may notice. It absolutely ENSURES, that the F&I Manager is protected when that inevitable customer comes back in and says "You told me I HAD to buy the VSC to get the loan...", when we all know better. But without having it on a recording, it is your word against theirs.
The only time I think any F&I Manager is going to object to this idea, is if they are not compliant to begin with and they fully know it. I for one, would have NO objections, absolutely none...to recording everything I do in the F&I office.
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Permalink Reply by John Fuhrman on -
Without knowing this manager, two things should be checked out. First, I would look at his chargebacks and rate retention. If he seems to be above average in holding rate, that may be the problem. Second, if he is only selling certain products, I would check to see if he is truly a manager or just someone working a payplan.
After reviewing all the facts, it's deision time. If the dealer, knowing the liability this manager is exposing him to, still doesn't want to change, I guess you have your answer. If the dealer does want to be compliant, this manager gives up his or her right to being asked about doing something. A full written policy needs to be put in place. That should include when and where the products are presented, hwo they are presented, adn what the managers accountability is for their own performance.
In every menu store that I had done full menu training, there were two facts. Fact #1, the finance manager resisted all efforts to change. I had to actually do some deals with real customers showing a full menu presentation. It showed them that the customer seldom if ever canceled on delivery and that I could present all products in less time than it took them to present their chosen few.
Fact #2, in each store the average increase in all aspects of F&I was 30%. PRU, Penetration, per product profit, or any other segment you want to measure. All go up dramatically. In fact, I guarantee those results when working with dealers who engage me to fix their finance departments.
Back in the day, dealers were willing to take shortcuts and risks if they were making lots of money. But, the situation you describe is a dealer who is missing tons of profits and risking his entire operation on the performance of one substandard person.
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Permalink Reply by Tom Hudson on
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Menu selling can be a useful compliance tool, but the best way to assure compliance in the finance department is to actually be compliant. That involves compliance training, careful document preparation or selection, and, because compliance rules and personnel aren't static, constant training and retraining. It aslo requires a dealership business philosophy, that comes from the top down, of treating customers honestly and ethically. I think the menu approach is useful for a number of reasons, not the least of which is that it is a process that can be created, given an initial legal review (and continuing legal reviews), and monitored to make sure that it is uesd correctly, consistently.
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Permalink Reply by MARV ELEAZER on -
I agree Tom. If we do our job and simply follow the rules by BEING compliant there will be no problems.
I was talking to a very prominent F&I trainer at the NADA conference in Orlando. The topic of compliancy came up when we were discussing a mutual colleague. Far too often we F&I managers/directors get caught up in the compliancy spin and boast about our war stories thwarting some poor 22 year old salesperson bringing us a straw purchase (as though he may be old enough to actually understand the terminology) then crow like bantam roosters about protecting our dealer from costly litigation when we ought to be spending our time training our staff to be more conscientious. I believe most dealership staff want to do things the right way-not the other way around. Once trained correctly most will comply.
In my opinion, being compliant to federal and state finance law is no different than driving down the highway on a trip. There are road signs, yellow/white lines, stop signs, intersection indicators, green lights etc. These RULES are for our benefit/protection as well as the benefit of others. The trip IS NOT about the rules-it's about the destination!!!!! Conversely our journey-if you will-is about getting the customer financed THEN selling the products our dealer has authorized and recommended to the customer. We can spend the rest of our natural lives arguing the fine points of law and miss the TRUE reason our employer has us in the F&I chair in the first place which is to make M-O-N-E-Y selling !!!!!!!!!
It's NOT about the road signs-it's about the journey!
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Permalink Reply by Doug Hildebrand on -
Here's my 2 cents worth. I disagree with the "overrated" on the showroom interview. If you are asking the "right" questions, the guard comes down and people tell you a lot more than what you were looking for. You don't pitch anything during the showroom interview, but it sure helps set up the menu selling once the customer does get into the box. We've been doing showroom interviews for over a year now, and our numbers show for it. Although our showroom interview isn't necessarily done in the showroom.
With the internet today and the internet department, your selling occurs via email and the phone. The Finance department MUST get involved in those deals. If they're not, you're missing finance opportunities as well as products to be sold.
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Permalink Reply by Jim Dirks on
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Different strokes for different folks. I was running 1k/copy at a Honda-Buick dealership back in 2004. No showroom interview, no lead in interviews. I took the turn at the door to my office, went into my menu presentation, and sold product. Average approx 30-35% of gross from reserves, the balance from product sales. None of which, makes the process compliant.
To be compliant; requires a directive from ownership. That way, you establish such as the company/corporate policy and set the tone for non-acceptance of non-compliant actions.
Now, you have to train to compliance. And then, you have to monitor/supervise to maintain compliance. Those last two, are why I favor recording the process. It is the only way, to provide for true monitoring of the process so as to ensure on going compliance.
I agree with you re the phone selling. Which is why I totally disagree with the sales desk giving "out the door" numbers. That final figure, NEEDS to come from F&I, so as to ensure that F&I presents it's options to the consumer. Over the years, I have had multiple people come into my office who had agreed to buy and then left the store with no F&I turn, only to come back check in hand, and then when presented with the options say to me, "Geez, if I had known about that I would have borrowed the money to buy it too. But I didn;t know, so I don;t have that option." (And trying to talk someone at that point into dealer financing is a VERY low-odds undertaking.They have after all, already finalized a loan and signed everything elsewhere.)
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Permalink Reply by Mike Meyr on
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All of this has good points in it. We see more and more less people walking in the doors and the desk just doing what they can to sell a car. What happen to asking the F&I Mgr to jump in? Menu selling is a great way to show your customer all the great products your dealership can offer and be Compliance. Talking to the customer up front will only help you build a menu that fits them. You can do that on the showroom or in the F&I office. Customers will tell you what they want if you ask the right away. John you may be on to something there….. A good F&I mgr will work his plane 100% When you use a menu customers will pick out a package that fits them and before you know it they pick out some things you never thought they would buy. (You now have a higher gross)
Jim well SAID
Over the years, I have had multiple people come into my office who had agreed to buy and then left the store with no F&I turn, only to come back check in hand, and then when presented with the options say to me, "Geez, if I had known about that I would have borrowed the money to buy it too. But I didn’t know, so I don’t have that option." (And trying to talk someone at that point into dealer financing is a VERY low-odds undertaking. They have after all, already finalized a loan and signed everything elsewhere…F&I and the store loose money!!!!!!!!!
If we would show the customer a menu up front they could of thought about options and who knows maybe you could of save them on rate.
Doug 100%%%%%%%%%%%%%
With the Internet today and the Internet department, your selling occurs via email and the phone. The Finance department MUST get involved in those deals. If they're not, you're missing finance opportunities as well as products to be sold. What’s wrong with sending out a menu?
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Permalink Reply by Nancie Pajan on
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I have been training F&I managers for more years than I care to admit and have been through many "systems" and processes. I have yet to see one as effective as menu selling - if it is done correctly and accompanied by a good interview prior to the presentation. That means effective questions delivered in a conversational manner.Having been to the F&I conference in '09 and '08 I can tell you that trainers, attorneys, and others agree that there is no better way to sell products. If you have more than 3 products to sell I don't know how else you do it legally and effectively. You just can't pick products you think your customer wants or that you happen to make more on - it isn't legal and you aren't a mind reader. I see $/car numbers jump when an effective menu is put in place. As for compliance - it is an effective tool simply because 3 years down the road when the customer for whatever reason files a law suit - the best defense is the ability to prove 100% that you present every customer the same way. Can you sell without using the menu? Sure but I just don't know why you would. We have clients that video-taping also for compliance. My only caution is that those tapes can work for you or against you. Just my opinion.
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Permalink Reply by Charlie Hernandez on -
You know I am presently working with an individual who does not do what he is suppose to do and that is why I wrote this blog. I am extremely upset with the person because his average for new is $400 and for used $600 a copy. The owner loves that he is capable of doing this and I know that there is a lot more to get. But he doesn't listen to me even though I am the GSM. He doesn't take a t/o when we sell a car but when we are about to deliver the car. His response is "Doing it this way doesn't allow the customer to think it over" We don't really do spot deliveries. So give him enough time and I guarantee you that the chargebacks will start to happen. They are happening now and it will get worse as time goes by.I would like to see the dealer's face when he has to start writing those checks back. This guy tells the dealer that when you are doing the #'s that he thinks are so great that one should expect c/b's. Is there somethig missing here? I know that I have always used "menu selling" and if properly prepped it works and exposure is a lot less. What do you think?
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Permalink Reply by Jim Dirks on
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Something missing? Yep. A quality F&I Manager is what is missing. Drop me a line and we can talk about replacing him. I'm looking, and will be happy to provide all the references you could ask for. I spoke at last years F&I Conference and sat on Ron Martins panel both last year and the previous.
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Permalink Reply by Nancie Pajan on
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Your F&I company should be able to pull numbers from dealers they service that use menus. They can do this without exposing who the dealers are. That would give you a better idea of the difference between those who use menu selling effectively and those who don't. If you are able to get this type of a report don't just look at the $/car. Really slice and dice the report to see how dealers use term options and different menu templates to help them sell. The real difference is in product sales. You tend to see less rate and more product which automatically leads to less charge backs and happier customers. We do that for for some of our accounts not for that reason but just by way of comparison so I know it can be done.
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