3 Elements of a Balanced Online F&I Strategy
Flooding your dealership’s website with F&I content without a strategy can be just as costly as underreacting to the Digital Age. The magazine’s resident F&I pro details a balanced approach for taking F&I online.
October 2018, F&I and Showroom – WebXclusive
We are living in the Age of the Customer. It’s a time in which many arrive at the dealership having accessed information on multiple devices, including inventory, vehicle price, trade evaluation, and more. Before visiting the dealership, they spend, on average, more than 14 hours online determining what they will buy and where.
This paradigm shift demands that we reinvent ourselves and work to systematically provide a process to serve increasingly powerful customers. The only real competitive advantage we have in this new era is knowledge and a commitment to early engagement. Contrary to what some believe, doing both will enable you to raise profits with an increasing online offering.
The key challenge for dealers and F&I managers is how to strike a balance with your online strategy — one that does not sacrifice profit opportunities at the altar of more information. Just as there is a measurable cost for doing nothing or underreacting, there is also a cost to flooding your website with information without a strategy or overreacting. So, let’s look at three key ingredients to a balanced strategy.
Start With the ‘Why’
No effort will be successful long-term unless everyone involved understands and is committed to the “why” of what you are doing. Numerous studies reveal that F&I products are purchased at much higher levels when customers are already aware of the products and what they provide before arriving at the dealership.
Dealers should provide online information with the purpose of educating and creating interest in F&I products. One of the mistakes many make with their first online effort is putting information on their website that amounts to nothing more than a sales pitch or commercial. Customers don’t like a sales pitch when they are in the F&I office, and they don’t want one online either.
When it comes to online, every customer is looking for the same two “C”s they look for inside F&I office: a high level of comfort and feeling that they’re in control. While they do want to learn what the F&I products you offer can do for them and how they can make their ownership experience more enjoyable and less costly, they don’t have to make their decision right when they’re ready to take delivery.
In a recent survey by Cox Automotive, the company discovered that 76% of customers were not aware of what tire-and-wheel coverage was or what it covered before they came to the dealership. Sixty-four percent were unaware of the benefits of GAP protection and 60% were unaware of maintenance. When a customer learns about a product and its benefit for the first time in the F&I office, they feel rushed and pressured. And that often leads to a quick “No.”
Some people will buy products from a third-party vendor only if they are able to research the product themselves online and felt no pressure or rush to buy. The more pressure you eliminate from the F&I process, and the more F&I product information and educational videos you provide on your dealership’s website, the more F&I products you will sell. That information and those videos should not be designed to sell F&I products, but rather help customers make good decisions about the protection options that are available to enhance their ownership experience.
Move on to ‘How’
How to make the online information most effective can be summarized in one word: video. The numbers are in and they confirm that video is exponentially more powerful than the written word. According to Forrester Research’s Dr. James McQuivey, “A minute of video is worth 1.8 million words.”
Short educational videos concerning F&I products are powerful because they are engaging and can quickly communicate nonverbal information. They are also much more likely to prompt someone to share the video with other decisionmakers. The most important factor is that video moves more people to act. A recent survey found that a video produces 380% more clicks than text.
In other words, video boosts a user’s likelihood of acting upon what they see. The goal is to have customers come to the dealership already familiar with the products available and a curiosity and a hunger for more information. They arrive at the dealership comfortable discussing F&I products and feel in control since they started the process of considering the products, not us!
Simply put, video is the best way to access consumers today. Video currently accounts for half of all mobile traffic, greater than any other medium. Customers are looking for information on their smartphones, the most preferred way to gather information during the vehicle-buying process. Developing a strategic, video-driven approach for engaging customers online will raise the level of interest in F&I products. It also enables an F&I professional to meet them initially where they desire it most: online.
Adding a video introduction from you, the F&I professional, allows you to convey and reinforce the dealership’s core values of transparency and customer satisfaction. It gives you an opportunity to start the relationship online, convey the fact that your role is to ensure customers have a great purchase experience, and help them as they consider the options available to protect their purchase.
An increasing number of dealerships are committed to getting F&I professionals out on the showroom floor early, meeting customers before the F&I process so their first introduction isn’t just prior to completing their paperwork. If that initial introduction to F&I happens before they arrive at the dealership, it multiplies the feeling of comfort and control once they step into the F&I office. Everybody wins in that scenario. Time and frustration are saved, and more customers leave with the protection they need — all of which results in a better purchase experience. And that’s what every dealership wants.
Some early adapters to this strategy have created a “Videos” tab on their homepages to drive engagement. Anything relating to video will be viewed at a much higher level, particularly when it doesn’t take several clicks to access them.
While pricing can be disclosed online for some products that have a fixed price, customers are not screaming for pricing online. They are screaming for information. They are demanding they not be confronted with information concerning products they have not had the opportunity to research and consider on their own before being asked to decide whether or not to purchase them — especially just before they sign their paperwork. When they’re forced to make a major purchase decision that will greatly affect their monthly payment in mere minutes, many of those customers will simply say “No.” With today’s empowered, enlightened, and information-driven consumer, that is an outrageous and unreasonable expectation that no dealership should force them to make.
Cast a Wide ‘Net’
The great thing about providing videos to educate and inform customers is you can use them in multiple formats to engage customers. They can be included in a follow-up email campaign, used for service-drive sales, as well as internet, or BDC sales and special product promotions. Once your dealership’s video strategy is in place, the possibilities are endless.
Your online strategy should provide just enough information to make the customer thirsty for more. Ideally, you want them to walk into the F&I office with questions about products. As an F&I professional, you then have the opportunity to provide them with your insight concerning the value of a product and how it will meet their needs.
Insight is the one thing customers cannot get online. They still need the knowledge and expertise that only an F&I professional can provide. A balanced approach will provide them with what they are looking for online. And they will arrive needing our input and guidance to make the best decision.
The Information Age has intersected with the Age of the Customer. The challenges are real. However, approaching this with a balanced online strategy will ensure that we provide the interactive process customers desire both online and in the store.
Like every challenge we have faced in the F&I office, a creative and balanced approach will enable us to harness the vast amount of information on the internet to our advantage and provide our customers with the buying experience they are looking for. The waters ahead are uncharted and daunting; however, the F&I ship will navigate it successfully and ride the wave to more profits and happier customers. Sail on!
Rick McCormick is the national account development manager for Reahard & Associates Inc., an F&I training company providing classes, workshops, in-dealership, and online training. Email him at firstname.lastname@example.org.