F&I Packages can help your dealership’s customer retention. As anyone with experience running a dealership can tell you, long-term success is about more than just selling vehicles.
It’s just as much about customer retention.
Dealerships that can sell customers – and retain them as future customers who will return for ongoing needs will always have a much easier time thriving. Those that only see a customer for the immediate profits they represent will still struggle.
One of the many ways your dealership can improve its customer retention rates is by understanding the role F&I packages play.
F&I Packages by the Numbers
According to the National Automobile Dealers Association, the 16,802 dealership franchises in this country sold 17.14 million new vehicles last year. That represented roughly $1 trillion in sales.
These dealerships also carried out 316 million orders for repairs. Altogether, services and part sales exceeded $114 billion.
In other words, repair packages added another 10% to the already significant revenues from the sales of new vehicles.
Using F&I Packages to Retain More Customers
Auto service contracts should be no-brainers for customers.
They know that, at some point, their new vehicle is going to need some kind of maintenance or maybe even repairs.
Ensuring that a customer elects for a vehicle service contract is about taking an automotive consulting approach. This means dropping any hard-selling tactics and helping your customer understand why specific products are in their best interest.
Common Examples of F&I Packages That Keep Customers Coming Back
There are all kinds of F&I products you can bundle into different packages, so your dealership has a veritable customer-retention arsenal at your disposal.
For example, hazard tire protection has become extremely popular. This product offers service to the customer if their tire is punctured by a hazard while they’re driving on a public road.
Back at the dealership, the tire is repaired or replaced. Best of all, this helpful service is free. However, to qualify, the tires must pass inspection. This provides a fantastic opportunity to the dealer for upselling various parts and other maintenance services.
This also provides the dealership with an enviable advantage over aftermarket companies they’re competing against.
Another typical example of these kinds of F&I packages is prepaid maintenance programs that offer the customer tire rotations and alignments, lube-oil-filter service, and other essentials they’ll eventually need to keep their vehicle running for years to come.
The idea is to offer the customer services that will keep them returning to the dealership’s service department again and again. Every time they do, the dealership has another opportunity to turn this into a profit.
Selling Packages Over Products
While selling F&I products are great for your bottom line, you’ll see a dramatic improvement in your profit margins if you learn to close on packages instead.
In short, trying to sell a customer one product after the next is quickly going to be met with resistance. You may be successful with one or two, but you’ll struggle past that point.
Instead, utilize menu selling to ensure the customer purchases an entire vehicle service contract that’s full of numerous F&I products. You’ll increase the number of products you sell per customer and enjoy greater retention as each of those F&I products represents another reason for them to return at some point in the future.
Using F&I Packages to Increase Your Dealership’s Customer Retention
Train your F&I personnel so that they understand the true importance of the auto service contracts they’re selling.
At the same time, spend some time looking at the contracts you currently offer.
Do they meet the requirement of ensuring the customer returns to your service department again and again?
If they don’t, amend this ASAP so they do a better job of increasing your customer retention rate. That one change could make all the difference for your dealership.