Unrealized opportunities for profit occur all too often in the F&I office. At the recent Industry Summit in Las Vegas, John Braganini, principal, Great Lakes Companies, and Steve Veldkamp, director of training, Great Lakes Companies, faced the issue head on and shared their tried and true methods for turning opportunity leaks into profit.

The quality of a dealership’s overall sales efforts is determined by the combined transactional yield in each area of the dealership – F&I, sales, and service. From the moment the customer enters the dealership to the point of delivery, opportunities for profit can be missed anywhere along the way. To illustrate, Braganini began with the following example:

A sales manager’s front-end profit for the month (excluding lease and fleet deals) was $1000 dollars. If everything were to occur perfectly – each involved person following every step to the sale – the maximum front-end gross profit could be as high as $1500. Making considerations for the staff, competition, etc., a realistic sales goal could be $1200. Given this scenario, Braganini asked the audience where the $200 difference between front-end profit of $1000 and the established sales goal of $1200 leaked out for the month. The first step for effective remediation, he explained, is tracking and identifying the leak(s).

“If I came to your store every Monday,” said Braganini, “and told you what each sales person could have done differently to earn those $200, there would inarguably be great value in that. The targeted performance is worth a ton of money. Having the correct remedial solution would be valuable to any dealer.” To accomplish this goal, Braganini and Veldkamp developed a data driven management system to replace other commonly used methods for analyzing sales profits, such as throughput analysis.

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