Kodak was the leader in photography for decades. They even invented the first digital camera in 1975. Yet, they were left behind by more forward-thinking companies like Sony and Canon. Their research said they had at least 10 years before the changes would affect their profits, but they were wrong.

"Determine the best technology for your dealerships and couple it with a customer focused process that customers enjoy."

Dealerships need someone who can present the urgency of adapting to changes in the market and show them the path forward. Agents can provide dealers valuable insight on what is needed in their dealership.

We can learn, from the two basic mistakes Kodak made, to make sure your dealerships don’t get left behind!

First, they asked the wrong question.

They actually created the first digital camera in 1975. However, they refused to produce it because they felt it would decimate their core business; making and selling film. They were deceived into believing they were in the film business, when in fact they were in the storytelling business. The question they were asking was; “How can we protect our business?”

Wrong question!

They should have been asking themselves: “What business are we actually in?”

So this begs the question for the F&I industry: “What business are we really in?” We are not in the product selling or income development business. We are in the customer service business. We help customers make great buying decisions in connection with one of the most important purchases of their lives. Money follows service everywhere it goes, not the other way around. Every decision concerning how a customer will be moved through the F&I process should be filtered through the question, “Will this improve the customer experience?”

We are being confronted by a push to move the F&I process into the hands of salespeople. The justification being that it will save time and customers will appreciate dealing with just one person. True, this could save time in the process. However, providing customers a professional F&I manager who can share their knowledge, expertise and help customers determine how to enhance their ownership experience, adds real customer value.

Reducing customer value is not the way to increase profits. As a matter of fact, educating and informing customers about the options available in connection with their purchase, answering their questions, and helping them make the right decision for them and their family is one of the best things we can do for a customer. The customer may save time in the short term, but will the long-term effect truly benefit the customer or the dealership? And when did short-term thinking ever really benefit anyone? We are in the customer service business. Today, every dealership must strive to provide a great ownership experience, not just a great buying experience.   

Second, they delayed the need to change.

During its 10-year window of opportunity, Kodak did little to prepare for the inevitable disruption of the digital camera.

Change came too late!

As digital cameras, demanded change for Kodak, new time saving technology and massive amounts of information readily available online demands that we change, now.  New technology has the potential to be disruptive to our process while at the same time benefiting consumers. We cannot put off the need to the change the F&I process until later. We have to help our dealers do it now, before forward thinking companies do it for them, like they did for Kodak. However, simply placing new technology into the hands of F&I managers (or salespeople) for the sake of having it, is a losing strategy. A bad F&I process with good technology is still a bad process.

Technology is a facilitator, not a fixer. To provide a better customer experience, first examine the process. F&I managers must get out of their office and interact with customers early. They must work hand-in-hand with the sales department to create a time conscious and customer friendly experience. Customers hate waiting. Any F&I process that involves making customers wait on the F&I department to complete their purchase cannot be fixed with a tablet or desk sized menu. Determine the best technology for your dealerships and couple it with a customer focused process that customers enjoy. Those changes will produce loyal customers and profits that soar. Yes, your dealers may need to adopt new technology ...  However, the need for a better F&I process may be even more important.

I look forward to seeing you on my next post! Visit www.go-reahard.com to learn more about how we can help you help more customers. Also feel free to contact me. Exchanging ideas with F&I Professionals is my passion!

Read: Master the Ability That Matters Most