Finance and insurance can throw cold water on the excitement of a new boat purchase – some salespeople may even avoid this topic entirely when pursuing a lead , shunting it to the sidelines to avoid “ ruining the fun .” What those salespeople ( and dealerships ) don ’ t realize is that F & I is far more than running the numbers . It ’ s an integral part of the entire sale process and needs to be given due consideration by both dealer and customer .

An overlooked profit center

When asked why F & I is important to dealerships , Myril Shaw , COO of Dealer Profit Services , is frank : “ It contributes profit directly to their bottom line , if done right . Inventory is coming back to normal but the number of buyers is not , so the carrying cost is going up and the revenue is coming down slightly . This means dealer profits on the actual unit sales side are probably coming down . That makes the F & I

Myril Shaw

Liz Walz profit component even more important in order to sustain the overall profitability of the dealership . Done right , the net F & I profit should be able to contribute at least 40 % if not 60 % of the store ’ s overall net profit .” That ’ s quite a lot of money to be leaving on the floor .

Liz Walz , MRAA Vice President of Education , concurs . “ Dealerships that offer finance and insurance products and services have an advantage when it comes to their customer relationships and their bottom line . Finance and insurance products and services can deliver significant revenue that benefits the dealership . That ’ s especially important during times of uncertainty , as dealerships with a more diverse line-up of profit centers tend to be more financially successful and stable , better able to ride out the ups and downs of the marketplace .”

“ The more ways in which a dealer can become a trusted guide for a boat owner , the deeper the potential relationship with that customer and the more opportunities to create long-term loyalty ,” continues Walz . “ Finance and insurance products and services provide additional methods for the dealership to offer value to the customer . This added value translates to stronger relationships , which boost customer retention and thus cut costs . After all , experts agree that it ’ s more expensive to attract a new customer than keep an existing customer .”

“ It ’ s such an important part of the entire customer experience , but also from a general bottom line perspective ,” says Nicole Armstrong , VP of Corporate Initiatives at Priority One . “ A lot of times people put emphasis on when the customer walks through the door , but the F & I department is what gets them out the door and guides them through the entire sales process . And ultimately , these are businesses . They have to have a revenue , and they have to generate profit . F & I is the most pure profit in the entire dealership .”

To fully take advantage of this profit center , dealers need to follow “ the two principles of F & I ,” according to Shaw . “ The first is what I call the Hippocratic oath : do no harm . From a salesman perspective , you never want to cost the sale of a unit , even if that means you don ’ t make any profit . The second principle is aggressive and graceful retreat . You never get more than what you ask for the first time . What you want to do is put together a package that maximizes the reserve , bundled together with a suite of protective services that maximizes the profit . Then you need to be able to back down gracefully from that starting point .

“ This is a lifestyle purchase . We had a customer that took out an engine warranty . They broke down out on the lake , they got towed in and lifted , got the engine repaired with a $ 50 deductible and were back on the water in less than a week . It was fantastic . Once you start having these lifestyle conversations and telling these lifestyle stories , the customer gets excited . They want to do these things .”

20 february 2023 www . boatingindustry . com