F&I has assumed increasingly greater importance for dealership profitability and with the combined forces of tighter margins, both in the bonnet and as a result of lower finance rates, and stricter compliance regulations, the business manager’s role has come into sharp focus.
From complying with evolving legislation to forging relationships with more informed customers – the position has become a much more comprehensive role demanding the highest standards of professionalism and conduct.
When Skoda put its ambitious growth plans into action, F&I culture and performance at each retailer formed a crucial component of this strategy, but the brand redefined the role of the traditional business manager and created a ‘retail sales development manager’ or RSDM.
Jacqui Rowley, Skoda Finance brand manager, explained: “We knew that if our retailers had the right type of resource focusing on finance and insurance, long term, this would deliver improvements across the board.
"The problem was convincing retailers to invest in additional staff in a recession.”
Results of RSDM pilot scheme speaks for itself
In 2011, 11 retailers took part in a pilot scheme whereby the manufacturer provided the RSDM resource.
By the end of last year, 26 had joined the scheme while an additional 30 retailers will come on board this year.
Andrew Bannister, F&I development consultant for Skoda Finance, has managed the programme from the outset.
He said: “The RSDM role is different from a traditional business manager.
It has a much wider remit – ensuring, first, that a robust sales process is in place and, further, that the entire sales staff understand that process and follow it consistently.
We have seen a more motivated sales staff and customers who feel they are treated in a consistently professional manner.”
The results speak for themselves.
The 26 retailers currently in the programme have seen a combined performance increase of 142% on new and used finance penetration; a 300% increase in PCP Solutions sales; a 200% increase in GAP sales; and a 285% increase in service plan sales.
Most significantly, the average income per retail unit for F&I has seen a 193% increase, which has led to increases in overall retailer profitability.
Undoubtedly, the project played a part in a record 53,000 vehicle sales in 2012 for the marque, equating to a corresponding market share of 2.6%, which makes its goal of 80,000 new car sales by 2015 look all the more achievable.
Crucial part of the sales process
In a similar way, and reflecting its belief that a proactive business manager is fundamental to the ongoing success of individual businesses, Drayton Group, which operates seven Mercedes-Benz, Smart, and Chrysler Jeep franchises in the West Midlands, appointed finance and insurance development manager Mark Lewis in October 2011 to develop its F&I business.
He said: “The business manager is seen as a crucial part of the sales process.
"By providing consumers with a clear, consistent and informed understanding of the portfolio of products available, it means we highlight all product benefits as well as giving ourselves the best chance of increasing our profitability.”
However, Lewis believes there is still much to be done to help continue to distance the industry from past negative associations with the business manager playing a part in creating the perception of automotive retailers as a responsible, compliant and competitive source of finance provision.
Added Lewis: “It is essential that as an industry we continue to professionalise the role of the business manager which will help raise the industry’s profile among people looking to finance their future vehicles which, in turn, will sustain our businesses more profitably.”