If you believe in the Pareto principle, which suggests that 80% percent of your results come from 20% of your activities, that means we spend a lot of time in F&I on activities that don’t support our goals or generate revenue for the dealership and income for you. Granted, the principle isn’t absolute, but it does suggest we spend more time in F&I being nonproductive than we do being productive.
The average F&I manager spends 10 hours a day at the dealership. Applying the rule, that leaves eight hours to consider. How many deliveries are you doing a day? The average, if you divide deliveries by working days, is just over two. Hopefully your deliveries don’t take an hour each, but if they did, it would prove the principle.
Business With a Business
I suggest to every group of new F&I managers I work with to think of their new role of F&I manager as a business within a business.
If they approach their role as F&I manager in this way, they look to turn the 80% into activities that support generating income. F&I managers who have the entrepreneurial mindset tend to prioritize their time better, set and achieve goals, and consistently outperform their counterparts.
Early in my career a sales manager asked me what I thought my job was. I told him, “to sell a car or truck.” He said that was average thinking that would return an average result. He went on to add that if I wanted to be an above-average salesperson, I shouldn’t be focused on selling a car but instead on finding someone to sell a car to. That changed my thinking and significantly changed my results. F&I is no different. Don’t wait for something to happen – make something happen by focusing on how you can fill the 80%.
Shifting Priorities
What are some things you can do to fill it? First, check your goals. If you create goals that will challenge you, are written down, and are time-bound, activities that can fill that 80% will become clearer, and priorities will emerge.
If you are on track with your goals, look for things you can do that will give you an edge, like sitting down with your F&I provider representative and doing a deep dive into your key performance indicators, identifying opportunities to improve on that 20%.
Maybe you can spend time at the sales desk, working with sales to increase profit through better deal structure. On your way to the sales desk, take a minute to introduce yourself to a customer and endorse the salesperson.
Another idea to fill the 80% is planning training that you can facilitate weekly to raise awareness of the products you offer in F&I. Or create those product videos on your mobile device for the dealership website that you’ve been meaning to create. You know, a video that lets the viewer know who you are and what you do, that tells, not sells, by sharing what the product is, what it does, and how the customer can objectively decide if it’s right for them or not.
Another powerful activity you can use to fill the 80% could be to start following up with your customers who have enrolled in product at delivery and, more importantly, with those who didn’t enroll. There is additional income at the end of that phone on your desk or in your pocket.
You've Got the Time
One more interesting thing about the Pareto principle is that when it’s applied to F&I, it suggests that no matter how good your KPIs are or whether you are an average F&I manager or a great F&I manager, the rule implies you have the time needed to improve.
Waiting for the sales department to hopefully bring you enough customers to fill 20% of your day will limit your potential. Instead, look for activities to fill the other 80% of your day that support generating income for you and your department. By doing so, you will be in control of your career and income, your days will be more productive, and you might just give yourself a raise in the process.
John Tabar serves as executive director of training for Brown & Brown.
