As an automotive finance veteran of nearly 30 years, Sue Wilke opposed the hybrid model of individual dealership employees managing both sales and finance and insurance.
“I was a hundred percent against it,” Wilke, finance director and sales manager of Lompoc, Calif.-based RocketTown Honda, told Automotive News.
She recalled an encounter with Cindy Merry, finance director of a dealership group in Alaska that has thrived for years with a hybrid format. “I told her, ‘You’re crazy,’ ” Wilke said.
Then COVID-19 struck in March 2020. RocketTown was forced to adopt appointment-only sales and lay off a sales force of about 10 people, two finance staffers and an Internet sales manager. But when conditions improved in 2020 and RocketTown Honda needed to add staff, it seemed sales personnel wouldn’t have enough volume to earn a decent living, Wilke said.
The dealership switched to a hybrid format as it brought back three of its staffers throughout 2020. One salesman, whom RocketTown had deemed qualified for F&I prior to the layoffs, was trained and assumed F&I duties. The two F&I managers returned with sales responsibilities.
Now, Wilke is a believer.
“To be honest, customers like it better,” Wilke said. She credited the hybrid model for helping the dealership rank high among Honda’s network in customer satisfaction. She said consumers dislike being passed from person to person, which occurs under a traditional sales-to-F&I handoff. The hybrid role also allows the customer and salesperson to discuss F&I products at the beginning of the process.
Merry, Wilke’s counterpart at Anchorage, Alaska-based Continental Auto Group, also described customer satisfaction as a benefit of the format. The six-franchise, four-store dealership group instituted a hybrid sales/F&I staff model in 2017.
“Our owners will not go back” to the old way, Merry said.
Merry agreed with Wilke that customers prefer to deal with a single individual. “They don’t like getting tossed around,” she said.
Customer satisfaction index scores “went through the roof” after the group adopted the hybrid model, Merry said.
Subaru recognized Continental for CSI at a national convention, and Nissan has requested that Continental provide training to fellow Nissan retailers because of its CSI numbers, Merry said.
“We make more money,” Merry said. “We have happier customers.”
Merry said the hybrid program has paid off with a 90 percent drop in chargebacks, the money a dealership must repay when customers refinance loans or cancel F&I products.
“We don’t get any of that,” she said.
RocketTown brought back the F&I managers first when it needed staff. Their preparation involved refamiliarizing themselves with the vehicles and rebuilding the product knowledge they had as sales personnel, Wilke said. She said she trained the salesperson in finance when the dealership brought him back.
Merry said it takes “much longer” to train a new employee for the hybrid role compared with a salesperson, and that person isn’t fully developed for about a year. “There’s a lot of mentoring going on,” she said.
But Merry said Continental streamlines the hybrid staffer’s job from the typical combined duties of a salesperson and F&I manager. The hybrid staffer presents the F&I menu, but the sales manager structures the deal financing and a contract specialist prepares the paperwork. The other two positions work behind the scenes; the interaction with the customer remains the purview of the hybrid staffer.
Merry said the dealership tries to reduce for the hybrid team member “the stuff they’re not good at.” Before, she noted that dealerships typically made an F&I manager out of their top salesperson — who “usually doesn’t know squat” about accounting or paperwork.
Continental also stripped down the deal for its hybrid process. Rather than mark up interest rates, it takes a flat payment for arranging loans. The menu was pared down.
Hybrid staffers at RocketTown receive the proceeds of both a sales and an F&I pay plan, Wilke said. She said RocketTown didn’t change the F&I pay plan, while the sales pay plan received some adjustment. However, it continued to pay a flat amount rather than a percentage per vehicle sold, she said.
Merry said Continental restructured its pay plan to accommodate the hybrid format. Its conditions include a flat amount paid to the hybrid staffer for each vehicle and F&I product, and it contains a bonus related to CSI, she said.
A year and a half later, there are still just the three hybrid team members at RocketTown, Wilke said. She said this is preferable from a managerial perspective as well because a traditional sales staffing ratio leaves personnel sitting idle and “you feel like you’re babysitting.”
The exercise has been such a success that Wilke said she might make future new employees hybrid staffers when the industry’s inventory situation improves.
“It works great,” she said.