In the F&I world, the “300% Rule” has been the unofficial sales adage for years. Offer 100% of the products to 100% of your customers 100% of the time, and you’ve left no room for error and no potential opportunities on the table. But while this tactic can improve customer buy-in, there’s more to a successful transaction.
Two other things need to be top of mind with every sale: process and compliance. Meet the 500% rule: 100% of the products presented to 100% of the customers 100% of the time, 100% according to your dealership’s sales process and 100% compliant. Let’s break down the equation.
100% of the Products
When’s the last time a customer asked you for a protection plan that includes trip interruption reimbursement and coverage for factory-installed navigation systems? Most likely, it hasn’t happened because there aren’t many buyers out there who know it’s even an option. No matter how practiced and perfected, your sales pitch isn’t going to sell products if customers don’t know they exist.
But there’s more to it than just presenting a grocery list of products.
A needs-based selling approach lets you show customers how a product will benefit them specifically, avoiding canned sales pitches that are the same no matter your buyer’s unique situation. But first, you have to discover what needs they have that your products can fill. Taking the time to learn about each customer, their expected mileage per year, and average length of ownership can help you customize your menu presentation to connect the benefits of your products to what your buyers need.
100% of the Customers
There’s more to this part of the rule than just increasing your chances of making a sale. Avoid claims of discriminatory treatment by making sure all of your customers are given the same opportunities–at the same price.
Yes, in this industry there’s always room for negotiation, even in the F&I department. But resist the temptation to mark up your VSC products to increase your PVR–if you’re audited, you don’t want the appearance of any pricing discrepancies. A base “MSRP” for your protection products that serves as the starting point for every deal will also help you avoid any unintentional pricing discrepancies.
100% of the Time
Consistently offer all of your products to all of your customers. Buyers have become accustomed to having immediate access to just about anything at any time, so why shouldn’t they in the F&I office?
Having a few menu presentation templates ready to add in vehicle and financing details, mileage, and ownership time can help you present a “customized” suite of benefits to each customer every time. Consider templates for a few of your most likely scenarios so that you’re prepared for every customer:
- Declining Benefits
- Cash Purchase
- High Mileage Vehicles
100% According to Process
A standardized process adds structure and accountability to every sale. With clearly defined steps and milestones that go from greeting to presenting to closing the sale, the right approach can keep deals from slipping through the cracks.
But that doesn’t mean you lose the flexibility to customize your presentation to every customer. Using a scripted line of questions can help you uncover their likes, dislikes, expected usage, and what they’re looking for in a vehicle. This information can serve you from the beginning to the end of the sale, giving you all the information you need to make the right recommendations without forced sales pitches for products they have no interest in.
Most importantly, every part of the F&I process must show value to the customer.
While no dealer will deny that staying on top of rules and regulations is absolutely crucial, the ramifications of even the slightest error can be huge. Following a set process can help safeguard sales, but there are other steps you can take to monitor compliance.
With particular attention to deals that grossed the highest profits, monthly deal jacket audits can help you ensure that all the right steps are taken. And regular compliance training, including the ability to certifiably train and track performance for individuals, can prove invaluable if you’re ever under audit. An investment in compliance training will consistently deliver the best return, protecting you from unnecessary penalties and fines.
Understanding your legal obligations and the government regulations that impact your dealership can save you thousands of dollars, not to mention severe legal penalties. Creating a culture of compliance, data security, transparency, and honesty is critical to protecting your dealership.
Even the best practices can get better. You’ll never bat 1.000, but by combining the 500% rule philosophy with real-world practice and training, you’ll inevitably see the results in your F&I profits.