In 1986, the automotive world looked very different. The Federal funds rate was 13%, Reagan was in the White House, and McMahon led the Chicago Bears to a Super Bowl Championship. It was also the year I began my journey in the automotive industry, coaching F&I personnel. Back then, F&I offices were equipped with ashtrays and fax machines the size of VW Beetles. There was no internet, no email, no cell phones, and no ancillary products. Yet, we had a mission to increase per retail averages beyond what was then considered an astonishing $400 per copy. To achieve this, I embraced the role of a disruptive coach.
The Constant Need for Partnership
Despite technological advancements and market shifts, one principle has remained constant: the necessity for F&I to be viewed as a true partner to dealers. This partnership is built on three core objectives:
- Generate Additional Profitability: Enhance the dealership’s profitability across sales, service, and F&I departments.
- Mitigate Problems: Address and eliminate issues before they escalate.
- Stay Ahead of the Curve: Always be proactive where F&I intersects with the dealership’s broader responsibilities.
A Partnership Built on Trust
Empathy is crucial in understanding the multifaceted challenges a dealer faces daily. From managing expenses and income, handling personnel and customer inquiries, to complying with factory mandates and growing the business to meet stakeholders' expectations, the role is demanding. Avoiding the stigma of underperformance, recognized by peers in a 20 Group, is a constant pressure. Breaking through this clutter to become a trusted, disruptive coach requires understanding these daily battles.
Staying Informed and Relevant
Dealers need to seek out partners who are willing to go above and beyond, staying informed about industry trends and concerns. Sources of valuable information include:
- Daily Interactions with Dealer Clients: Gleaning insights directly from the ground.
- Industry Publications: Regularly consuming articles from automotive sources.
- Industry Surveys: Leveraging data from trends and surveys.
- Business News: Following segments that know our industry.
- Thought Leaders: Engaging with content from authors and speakers.
Effective Coaching Through Habits
High achievers distinguish themselves by their ability to act on valuable information through productive, high-leverage daily habits. For me, observing Head Coach TJ Otzelberger of the Iowa State men’s basketball team, who led a remarkable turnaround by focusing on daily habits, reinforced this lesson. Adopting a similar approach in coaching F&I professionals involves defining and executing specific daily routines that consistently lead to increased sales and performance metrics.
Preparing and Partnering for the Future
Look for partners who will address current challenges and anticipate future trends. Today, we face the headwinds of inflation, higher interest rates, and ongoing compliance issues. While inventory levels are stabilizing, the average age of vehicles on the road is increasing, leading to fewer sales opportunities but greater pressure to succeed with each transaction. Reviewing F&I logs and maintaining an “opportunity log” to analyze successes and failures can help maximize these opportunities.
In closing, it’s important to note that while our brand, products, current clients, and reinsurance profit structures are essential, the real value lies in the relationship and expertise we bring. Dealers are looking for partners who think like them and understand their unique challenges. By adopting this mindset, we can collaboratively develop game plans, product mixes, and profit structures that drive necessary changes and growth.
The next 40 years in the automotive industry will undoubtedly bring transformative changes. Whether it’s the rise of AI, the impact of electric and autonomous vehicles, or shifts in market dynamics, the future will belong to those who can prevent problems and enhance profitability. With this focus, the future is bright for the dealerships and the disruptive coaches who serve them.
If you’re ready to dig deeper into these trends or want guidance applying them in your store, connect with Joe Hammen on LinkedIn or via email at jhammen@ezvds.com.
