The average dealer leaves over $250,000 on the table each year for every 100 units sold per month. That’s right, a quarter-million dollars. Surprised? That’s what your dealership sacrifices when you don’t offer Environmental Protection Packages (EPP), also called paint & fabric packages, to 100% of customers 100% of the time. Consider these facts:
What are we doing? We are failing to help our customers and our bottom line. Why? It’s fairly simple…we don’t offer it!
What are the remedies?
First, consider this: have you ever met a high-performing finance manager or sales representative that didn’t work their pay plan to a “tee?”
If dealerships motivate the key people who can get passionate about this super valuable product, they will present it more and get more sales. Good F&I managers always could stretch the boundaries, right?
Now’s the time to start selling more EPP. Here’s how you do it:
Create a true motivational compensation plan
The lack of consistent execution or absence of key processes is the primary reason salespeople traditionally struggle with selling ancillary products like EPP. However, the underlying issue is that they don’t want to upset the stability of the sale. They already earned one ‘yes’ from the customer. The one that matters the most. The fear is that pursuing another ‘yes’ might put the entire sale at risk.
To clear that fear hurdle, you have to motivate salespeople to take the risk. It’s not always enough to pay an equivalent to the commission. Sometimes you have to over-incent to change behavior. We’ve seen dealerships compensate in varying ways depending on whether they post EPP to an addendum on every vehicle, or have a checks-and-balance system that ensures consistent presentation execution. Here are two options:
There is a lot of profit to be made from EPP. At $349 average profit per policy in the US, it’s plain to see the product is way undervalued. With an average cost of under $300 (re-insured), that means the average selling price is in the $600 range. When well presented, this product is worth much more.
Paint a picture worth a thousand words
Visual sales tools are the way to sell the value to customers. Think physical samples of real body panels that have and have not been protected, video presentations, and pictures.
In a fantastic article in F&I Showroom, (I highly recommend a read!) F&I development manager Rick McCormick suggested another great visual technique. Hand the customer a golf ball and explain the minor pits and valleys are what vehicle paint looks like under a microscope. While the finish may look uniform, these divots collect water, dirt, and road salts when the protective wax finish wears off in six to eight weeks. These elements can eat through the clear coat and damage vulnerable paint. That’s why EPP is critical.
Don’t forget to always start with the “why” before the “what.” Emphasize that these products keep vehicles looking showroom ready. Tailor your presentation to your region and time of year. In sunnier locales, talk about the degrading effects of year-round sunshine. In colder climates, point out the negative effects of salt kicked-up from snowy and icy streets.
Make your presentations personal
Today’s customers roll their eyes at cookie-cutter presentations. Your “why” has to be personal so customers can see how EPP makes sense for their unique situation. This is selling 101. Utilize the normal Finance Questionnaire questions to find the right product for every customer.
Questions may include:
This last question is key. It’s been proven that EPP helps retain vehicle value and results in a higher appraisal price. That’s an added value every customer will understand.
On that point, when preparing your customer for the appraisal of their trade, add a few questions to the process to allow foreshadowing additional sales opportunities:
Consider offering a trade bonus voucher for “Yes “answers
Double down on EPP
If your customer sees the value on their new vehicle purchase, why would they not want to add it to their other vehicle? The average household in the US has at least two vehicles, if not more. You can offer significant discounts for insuring more than one vehicle. F&I trainer John Tabar offers a great F&I Tip of the Week explaining how to double down on appearance protection.
The facts prove that dealerships leave money on the table every day when it comes to EPP. Be the dealership that doesn’t. Train your influence team on the facts, benefits, and effective sales techniques. After all, we’re talking about adding more than $250,000 to your bottom-line every year.