I recently came across an article titled, “J.D. Power: Speed No Longer Top Consideration When Selecting Finance Sources,” and it sparked my interest about what the modern retail automotive dealer leadership really wants to see from their finance companies when ease of use and speed are concerned.  I recently spoke at a conference in Las Vegas, and was surprised by how many of our auto lending competitors were focusing on authenticity and dealer experience, when compared to simply decision and funding speed.

Although I wasn’t surprised that for most retail dealership managers a relationship is more important than application and approval turn-time, one quote in the article mentioned above made me smile from ear to ear as soon as I read the words.

It was this beautiful nugget of information from Jim Houston, senior director of the automotive finance practice at J.D. Power, who said, “Finance sources need to shift from a transactional relationship with their dealers to a more consultative one. Speed has been king and the area lenders have traditionally focused on, but as the market gets tougher, lenders need to center their attention on their relationships with dealers, or they are going to lose business.

For years, we lenders have struggled with the balance of transactional versus consultative selling and (not to pat ourselves on the back) many of us have gotten pretty good at mastering a combined approach, utilizing both techniques successfully.

What was even more interesting were Mr. Houston’s comments about the importance of the lender representative, their interaction with retail sales teams, and the perceived value of the lender representative-dealership call. He shared that consistent visits by a lender representative boosts the overall experience of the dealership’s satisfaction with a lender by as much as 7.5 percent. Those kind of stats put lender representatives and their hard work at an almost superhero or top secret weapon status in our contemporary auto lending environment.

With an impact of lender representative-dealer visits like this, how could it be stated in the very same article that nearly half of dealers surveyed did not receive lender visits at all? Here is where I want to pause and speak directly to the automotive retail dealers’ leadership and management teams.

What’s happening at the store

I know that in your dealership showroom, you can frequently see more lender representatives, vendors, and advertising account managers looking to sell you something than there are “real” customers ready to take delivery of a car. There are an increasing number of hands out, all of them asking for your time and hard-earned cash in exchange for promises to increase profits or reduce your costs in one “new” and innovative way or another. This can be a frustrating occurrence for dealership owners, sales managers, and finance managers like you, particularly when your volume goals aren’t being met and you are struggling to adjust your sales strategy, close out a successful month, and grow your bottom-line according to plan.

As a veteran of the retail auto industry, I remember the days when I swore to myself that if one more lender representative, account manager, or other outside product salesperson came to my desk or headed toward my finance and insurance office, I was going to find a reason to physically throw them out, politely of course, or at least find some personal solace by hiding in the bathroom or the service lane until they were gone. We have all been there.

Call them what you will: lender representative, bank rep, or dealer development representative. Regardless of their title, during my career in retail automotive sales, I was guilty of only leveraging my relationships (or lack thereof) with these sales representatives for a hearty lunch or by asking them for pens, notepads, and the occasional “exception” from their team of credit analysts and funders.

I overlooked these lender representatives for what they were: “secret weapons” that visited me with expert ears and eyes ready to fill me in on all the trends of the industry.  They were providing me customized access to authorities knowledgeable about my competitors and their business strategies (what worked and didn’t work for them), and a consistent one-on-one engagement with a specialist who offered a unique insight into the industry that I was unable to see.

These individuals, who I used to avoid (or perhaps worse — used for just a free lunch), were there poised in my showroom ready to help not only me, but also my business and bottom line in any way needed. I didn’t see their value and failed to ask the right questions for the help and guidance I could have really benefited from.

In regard to my bottom-line profit opportunities, they could have been my hero, but instead of seeing Superman, I only saw Clark Kent.  I could not get past the secret identity that I had created for my lender representative — one with little value. I had been looking over and through this amazing secret weapon! How wrong was I?

I remember one bank representative who consistently said, “I can help you with liquor, lunch, pens and pads, but not a whole bunch more than that.” What I realize now, is that this lender representative was pandering to the misplaced “value” that I had put on their visits. I had come to expect (maybe even subconsciously demanded) a routine and expected quick pitch about their program, and then we were on to negotiations for lunch, pens, pads, or maybe even tickets to a local game or event.

Instead, if I had come to see these visits differently, I could have earned a real relationship and partnership with an expert (along with their supporting service triangle team of credit analysts and funders), all who have been trained to support Dealerships in protecting and building profits.

How it can be different

Here are just two examples of ways that these lender representative “superhero” secret weapons can help you capture more profit this month, and every month into the future, if you only ask them the right questions:

—Service triangles and profit maximization teams: Understanding what happens to your application once you submit it to any given lender is of utmost importance. Your lender representative can easily talk you through this process, provide you all of the most convenient forms of access to your credit analysts (all who are trained to make you the most money), and to the crucial funders, who verify the application and customer information, and book that profitable deal.

Many lenders choose to utilize service triangle teams (area sales manager lender representatives, credit analysts, and funders) who communicate together every day about your individual business and they discuss how to provide you a quicker approval, improve your deal structures to maximize profit, and work together to ensure your deal is funded in record-time. If you have not utilized your relationship with your lender representative to be introduced to your expert service triangle, or other dealer services teams, I guarantee you are leaving money on the table and are not getting the attention, profit, service, and ease of use from your lender program that you want and deserve.

—Profitable Preferred Programs: With the myriad of lenders available on RouteOne and Dealertrack (presently more than 1,200 nationwide), it is impossible to memorize all of the programs that contribute to your dealership delivering more cars and producing a more robust bottom line. Even if you truly understand all of the nuances and “sweet spots” of any specific lender program, the platform and the profit-opportunity is only as good as the specific essentials required to maximize your profit on every approval. You do not need to simply know what type of deal the Lender buys; you need to understand how to make the most profit on every application they approve. Many times, that lies within their individual preferred status or other loyalty programs.

These preferred programs can, many times, open up the maximum number of allowable ancillary products you can sell on both the front and back-end of your deal, allowing product penetration to skyrocket.

The moral of the story here is to take the time to ask your lender representative about their preferred program and what it can mean to maximize your profits. This may not only surprise you at the end of the month during your gross-profit analysis meeting, but it may also change how you think about and interact with your lender representative.

The lender representative secret weapon

In our insanely competitive industry, it is crucial to take advantage of every opportunity and leverage every possible relationship in order to protect and grow profits your way. One easily overlooked (and potentially game-changing) relationship that you may have yet to maximize, is the one with your lender representative.

I have shared a few examples of how to reframe the way you see your Lender Representative and how to utilize their presence in your Dealership to gain a better understanding of market trends, your competition, and the industry. In addition, by utilizing your Lender Representative to better understand their program’s service triangle, or service team, you can substantially increase profit opportunities, decrease your application turn-time, and quickly shorten your “contracts-in-transit” list. 

Lastly, taking the time to ask your lender representative to explain the rules and specific conditions and caveats of their preferred program can change how you think about your profit opportunity on virtually every deal. Don’t worry! Your lender representative will always be good for “liquor, lunch, pens, and pads.”

If you consider looking at these professionals as a new and crucial resource and profit-center partner in your dealership, you may discover that engaging with your lender representative in a different way makes you feel like a superhero, particularly when you start producing uncanny and extraordinary product penetration and gross profit records every month with this new found secret weapon.

George Ewing is the vice president of sales strategy and development at Flagship Credit Acceptance, a national independent auto finance company headquartered in Chadds Ford, Pa. George has spent the last 15 years building a career in the retail automotive industry in roles that include finance, dealership management, underwriting, training and development and marketing.