Tag Archive | "John Pappanastos"

EFG Companies: Dealers Must Embrace Industry Paradigm Shift


DALLAS, Texas — Staffing and customer engagement models are the top issues impacting the future health of the retail automotive industry, EFG Companies President and CEO John Pappanastos said today.

The F&I product provider’s chief executive delivered his comments as part of a state of the industry address the company posted on its website. Pappanastos encourage dealership principals and senior managers to quickly address those issues or risk becoming a dinosaur in today’s rapidly changing consumer car-buying mode, noting that digital buying habits, millennial and Gen Z consumers, and women are forcing industry change.

According to the National Automobile Dealers Association’s 2017 Workforce Study, retail automotive suffered from a 43% turnover rate — up two points from 2016. Additionally, the automotive industry experienced an 88% attrition rate among female new hires, and a below average rate of millennial new hires when compared to other industries.

Pappanastos said many retail automotive businesses lack a comprehensive plan to become an employer of choice, and instead rely heavily on traditional “bell-to-bell” hours, commission-only payment plans, and limited training. He urged them to immediately develop a strategy for hiring, training, and promoting the best and brightest employees to operate in a world where consumers are demanding a more digital process with a better customer experience.

The executive noted that a single poor hiring decision in F&I can easily result in up to $75,000 in lost profit due to onboarding costs and lost production, adding that the retail automotive industry’s focus on daily operations also hampers leadership development and obscures the growth path for millennial hires who, as a group, require opportunities for promotion.

The F&I product executive also touched on recent research from Cox Automotive, which showed that 80% of consumers want to complete at least half of the car-buying process digitally. He also cited a 2018 Deloitte study showing that “dealers create a fragmented and inconsistent approach to the customer,” which leads to inefficient customer contact, inconsistent messaging, and ultimately failure to sell and build loyalty.

“While I realize change is difficult, dealership principals must incorporate greater consumer-facing digital platforms into their dealerships,” said Pappanastos, adding that hiring employees who are experts in online customer engagement and digital sales approaches represents one solution. “Failure to do so will result in lost revenue. We must remember the old adage of ‘meet the customer where they are.’ And today’s customer is clearly online.”

Pappanastos also encouraged dealerships not to lose sight of compliance. “Job skills are easy to assess. What’s difficult is finding candidates who have solid character,” the executive said. “During these tumultuous times, dealerships must maintain a high degree of integrated compliance. The resulting fines, and damage to reputation, can result in significant business loss due to very clear and public online postings and reviews.”

Pappanastos remarks during his state of the industry address focused on the future health of the retail automotive industry and sounded a wakeup call to dealership principals to quickly embrace changing consumer buying preferences. He also encouraged future millennial and Gen Z employees to seek out careers in retail automotive, noting that exciting changes and their opportunity to make industrywide impact.

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EFG Companies Launches Enhanced Lifetime Wrap Coverage to Complement Drive Forever Worry Free Limited Lifetime Powertrain Protection


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, today announced the launch of the Drive Forever Worry Free Lifetime Wrap, an enhancement to the company’s market-differentiating limited powertrain protection. For more information, visit http://bit.ly/2lUkufY.

The Drive Forever Lifetime Wrap is designed to help dealers close more deals at a higher gross with improved product pricing, expanded eligibility, and an underlying complimentary coverage component.

The wrap is a second coverage upgrade option for dealers to utilize when providing customers with complimentary Drive Forever Worry Free Limited Powertrain Protection. Until now, dealers had the option to upgrade customers to a full vehicle service contract with terms up to 96 months/120,000 miles. The Drive Forever Lifetime Wrap provides expanded coverage options with no mileage or time limits.

With the Drive Forever Lifetime Wrap, cost-conscious consumers will be better able to preserve their vehicle’s value and their savings. Beyond the benefits related to vehicle repairs, the coverage is fully transferrable, further enabling consumers to negotiate beyond just the value of their vehicle at resale.

Drive Forever Worry Free is a limited lifetime powertrain program for dealers to offer complimentary as a way to differentiate themselves from the competition. The Drive Forever Lifetime Wrap is a exclusionary coverage that matches the lifetime term of the complimentary product. The coverage upgrade includes roadside assistance, rental reimbursement, and a standard $100 deductible for the first three years.

Interest rates are expected to rise three times in 2017 and analysts are predicting lower used-car values as off-lease vehicles enter the market. With an uncertain economic outlook, dealers are looking for programs that create more foot traffic and help to close more deals at a higher margin.

“With dealer profit margins being squeezed in recent years, we’ve taken an in-depth look at how we at EFG can measurably facilitate dealer profitability, and customer retention.” said John Pappanastos, President and CEO of EFG Companies. “In our ongoing contract holder research, we evaluate our protection products with regard to the value perceived by the consumer. In the case of Drive Forever, on average, 82 percent of the time, contract holders rank it as a top 3 reason as to why they chose to purchase from a participating dealer. Based on this extensive research and ongoing feedback from dealers, we created the Lifetime Wrap as a natural extension of a program that provides distinct benefits to both dealers and consumers.”

Beyond the market-differentiating benefits of EFG’s complimentary Drive Forever Worry Free program, dealers have a better opportunity to stay ahead of the competition with an upgrade that gives customers enhanced coverage for the life of their vehicle, not just their loan.

This product gives dealerships an immediate means of capturing market share and increasing profit margins by turning the sales process into a more value-based conversation.

As always, EFG backs this new product offering with its strategic engagement model from an AFIP-certified field team, and a nationally award-winning claims administration team that is ASE-certified and recognized as a Center of Excellence by Benchmark Portal.

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EFG Companies Enables Dealers to Achieve Greater Compliant Profitability with Common Sense Compliance


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, today announced the launch of the company’s Common Sense Compliance® platform. The Common Sense Compliance platform was designed to ease the challenges facing retail automotive dealers and take the difficulty out of compliance by presenting the principles of compliance in an easy-to-understand manner, using layperson language with practical recommendations. For more information, visit http://bit.ly/2mjbvlI.

“We are in a period of immense change, with shifting consumer demands, a technology revolution and increased compliance oversight,” said John Pappanastos, President and CEO of EFG Companies. “This Common Sense Compliance platform better enables us to help dealers take ownership of the management of a compliant yet profitable business. At EFG, we pride ourselves in advancing the industry through our client engagement model. This platform marks another step towards achieving that goal.”

The Common Sense Compliance platform consists of three primary components:

  1. Monthly podcasts featuring EFG’s AFIP- and NAF-certified Vice President of Compliance, Steve Roennau, hosting discussions with industry experts, dealership principals, general managers, and F&I managers on immediate, simple steps that dealers can take to significantly impact their compliance standards.
  2. A video series with short, informational clips that dealers can share with their teams to make their compliance efforts more effective.
  3. An ongoing compliance initiative for EFG clients that includes in-depth training, dealership assessments, and performance analysis.

“Regardless of what happens with the current presidential administration and the Consumer Financial Protection Bureau, dealers wade through a myriad of regulations spanning both the state and federal levels,” said Roennau. “Compliance is not going away. So, we’re making it much more digestible, with an actionable, clear, and inexpensive method that focuses on enhancing customer service levels, streamlining operations, and positively influencing future profitability in a compliant manner.”

The first episodes of the video series are available on the EFG YouTube Channel at http://bit.ly/2iGpymU. The first podcast will air on March 22, 2017, at 10 am CST. For more information on EFG’s upcoming podcasts and video series, please visit our website at http://bit.ly/2mjbvlI.

 

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BenchmarkPortal Names EFG Companies a Center of Excellence Three Years in a Row


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced today that it has been certified as a Center of Excellence by BenchmarkPortal for the third year in a row. For more information, visit: http://bit.ly/2lztMvm.

Each year, researchers from BenchmarkPortal audit and validate best-practice metrics drawn from the world’s largest database of objective and quantitative data to determine which contact centers should be awarded this designation. Only contact centers that rank in the top ten percent of those surveyed achieve the award.

“Contact center leaders who seek this certification demonstrate an ongoing commitment to achieving service excellence in the most cost-effective ways possible,” said Bruce Belfore, CEO of BenchmarkPortal. “This certification means that EFG’s center has reached an optimized balance between efficiency and effectiveness.”

EFG has long recognized the importance of providing the highest level of customer service to its clients through high quality employees. In 2016, the company made its mission to better equip those employees with the tools and processes that only enhance their ability to service their clients and customers.

This effort started with the implementation of the company’s proprietary part sourcing platform, the Parts Wizard. In early 2016, EFG launched the Parts Wizard to reduce client reinsurance exposure, streamline claims administration and increase customer satisfaction. The Parts Wizard automates the manual process of sourcing parts for vehicle repairs.

Traditionally, claims administrators must research vehicle parts on several vendor websites, before negotiating with a service center. The Parts Wizard sources parts from all EFG-approved vendors at once, drastically shortening the time it takes to research parts by up to 30 minutes per claim. In addition, the technology prioritizes results based on availability and price to factor in to the decision process.

To further ensure the success of every customer contact, EFG invested in and implemented Castel DetectTM LIVE Speech Analytics to provide EFG claims adjusters and management teams with real-time insight into the health of every call. Each adjuster has a direct feed on their monitor of analysis regarding call content, including:

  • specific phrases;
  • agitation level; and,
  • higher than acceptable instances of talking over one another; etc.

Based on the course of the conversation, adjusters receive on-screen notifications to help guide them to more intuitively and successfully steer the conversation. In addition, managers have access to all adjuster analytics and receive notifications to step in to conversations that need their attention without the adjuster actually having to seek them out for assistance. Since implementing this software, EFG has seen a decrease in formal escalations, thereby increasing the number of successful calls and high customer satisfaction ratings.

“With achievements like these, we intend to continue to push the industry to serve contract holders more expertly, efficiently, and respectfully,” said John Pappanastos, President and CEO, EFG Companies. “This will inevitably promote a more positive overall customer experience and decisively impact the growth and success of the consumer protection product industry.”

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EFG Predicts Tighter Credit, Continued Focus on Compliance for F&I in 2017


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced its 2017 predictions and recommendations for the automotive and powersports F&I market today. These insights, formed through thousands of conversations with the nation’s leading dealership principals and lenders, reflect an air of cautiousness for 2017. However, there are many options for retail automotive/powersport dealers, lenders, and F&I agents to successfully navigate an uncertain business climate for a prosperous 2017. For more information, visit http://bit.ly/EFGIntel

“Even though the election is over, we continue to see a murky forecast for the F&I market moving forward,” said John Pappanastos, President and CEO, EFG Companies. “Consumers clearly want a new – and at least partially online-buying process. This trend has significant impact for the F&I industry across retail and lending channels. We also expect to see credit tightening on the consumer side and a foreshadowing of reduced auto manufacturer incentives for dealers, which will impact their margins. Finally, we don’t believe federal regulatory oversight will diminish to the level that is being hyped. So, we strongly believe compliance will continue to challenge dealers and lenders. All that being said, we believe that the changes transforming the auto industry will create unique opportunities for dealers and lenders to leverage as they look to expand their business.”

Utilizing its 40-year history in the F&I industry, EFG Companies offers the following predictions for 2017:

Flat Volumes, Compliance, and Customer Retention for Retail Automotive

While the Consumer Financial Protection Bureau (CFPB) authority may be up in the air, dealers will need to stay the course on compliance for 2017. Remember, the Federal Trade Commission (FTC) has jurisdiction over dealers and its operations are not impacted by any potential changes within the CFPB. Analysts are predicting flat unit sales volumes, pushing dealers to maximize their investment by squeezing more profitability out of their F&I operations. Customer retention efforts will increase, prompting dealers to shore up their service drive and fixed operations to deliver the “luxury car” level of service. In addition, an influx of off-lease vehicles will increase used car inventory while putting pressure on pricing. Whether purchasing new or used, the customer will be king in 2017. John Stephens, Executive Vice President, Dealer Services

Return on Investment and Shorter Transaction Times Key for F&I Agents

With retail automotive dealerships feeling increased pressure, F&I agents will also experience a trickle-down effect to clearly demonstrate a return on investment for the F&I products they place at a dealership. Agents will also feel pressure to help dealers shorten transaction time and pivot their operations to support online transactions. Agents will closely monitor their own businesses to keep production levels high and begin focusing more on acquiring new dealership business. Adam Ouart, Vice President, Agency Services

Rising Interest Rates and Portfolio Evaluations Will Challenge Lenders  

Regardless of what happens with the CFPB, lenders will also need to stay the course. You don’t stop treating customers right on the off chance that the government might not see your good behavior. Increasing interest rates will pressure lenders to tighten lending standards and evaluate other options to protect their loan portfolio outside of APR and loan terms. The same can be said for credit unions and other lenders that offer auto loans directly to consumers. I expect more lenders to evaluate how consumer protection products can benefit them from the standpoint of differentiating their institutions from the competition, protecting their loan portfolio, increasing loan volume, and controlling compliance. In addition, dealers will re-evaluate their lender roster, confirming a broad spectrum of partners that specialize in different credit tiers, and help dealers meet their profitability goals. This will put pressure on lenders to evaluate their service model for dealerships and make adjustments to tackle mutual dealer and lender challenges.
Brien Joyce, Vice President, Specialty Services

Growth and Lender Challenges Continue for Powersports Dealers

Although unit sales fell in the second half of 2016, we anticipate volume will pick up in February when early income tax refunds arrive. There will be a slight growth in the powersports market overall in 2017, with dealers putting greater emphasis on increasing aftermarket income through the sale of F&I products. Lenders that remain in the powersports market will want to insulate their loans and may look to offering their own complimentary F&I products. As powersports dealers continue to be starved for lenders, up-to-date technology resources, and committed employees, they will pressure their vendors and product administrators to provide outside the box solutions for these obstacles, such as digital F&I services. Glenice Wilder, Vice President, Powersports

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EFG Companies and Northwood University Announce F&I Innovator of the Year Competition Winner


DALLAS – EFG Companies, the innovator behind the award-winning Hyundai Assurance program, together with Northwood University, today announced the selection of Team Vigilance as the winner of the 2016 Innovator of the Year Award competition, and the recipient of $25,000.

Team Vigilance utilized their millennial mindset, ongoing dealership research, and F&I mentor input to create “401Karrs”. The product addresses Millennial and Gen Z concerns around financial security, and delivers on dealership goals around customer retention. In addition to the team’s monetary reward, they will potentially see 401Karrs developed by EFG for market availability. Team Vigilance is made up of three team members:

  • Alec Bond from Lindin, MI
  • Houston Huff from Tuscon, AZ
  • Lucas Myrhe from Austin, TX

“We want to thank all the teachers and mentors from this competition and across Northwood who’ve been a huge inspiration and motivation throughout this project,” said Lucas Myrhe. “With their guidance, we were able to deliver a product that is beneficial to customers and dealerships, increasing dealership profit, retention, and customer satisfaction.”

During the semester-long contest, team members leveraged time spent with their mentor, Craig Drew, the general manager of Central Maine Motors Auto Group in Waterville, ME. “Team Vigilance hit the ground running from day one, and they weren’t afraid to go back to the drawing board. Their dedication and perseverance to create a useful and beneficial product won them this award,” said Drew.

401Karrs – Pairing Evolving Consumer and Dealer Needs

Team Vigilance developed 401Karrs to address a concern among Millennials and Generation Z – financial stability. According to the Federal Reserve, to date, 44.2 million Americans owe nearly $1.26 trillion in student loan debt. In 2016 alone, student loan debt increased by 6 percent. The generations that will soon make up the bulk of the auto retail consumer market are entering adulthood with the largest debt load in history. With 401Karrs, this new generation of car buyers will have a tool to help manage their money by reducing or eliminating their out-of-pocket expense by putting a down payment on a vehicle.

401Karrs is essentially a down-payment savings product. Dealership customers will have the opportunity to add as little as $20 to their monthly payment, which will be used for a down payment on their next vehicle. When they return to the selling dealership to purchase their next vehicle, the dealer will match up to 20 percent of the amount saved, or $1000. In this way, the product acts as a customer retention tool, since they must return to the dealership to take advantage of the match.

The last part of 401Karrs is a reinsurance opportunity. As with vehicle service contracts, dealers can participate in reinsurance on the 401Karrs product, accruing interest on the money set aside for the down payment. This balances out the dealership match and has the potential to generate greater reinsurance profit.

Contest pairs students with F&I industry leaders.

In addition to experienced team mentors, the contest was judged by F&I industry leaders. The eight-member panel brought more than 100 years of F&I expertise from automotive dealerships and corporations from across the country, encompassing all major automotive brands. Several of the judges commented that the student product entries provided a fresh perspective and challenged their thinking about their own dealerships and operations.

“This competition offers students the unique opportunity to take their education beyond the classroom and individual dealership rooftops to create an industry impact,” said Keith Pretty, President and CEO, Northwood University. “Each of the participating students will be able to learn from their experiences from this semester and apply them to their future success as leaders.”

The contest winners were announced on Thursday, December 8, during a ceremony at Northwood University.

F&I Innovator contest designed to boost development, reach consumers

Each year during Northwood’s fall semester, the F&I Innovator of the Year Award competition pits six teams of Northwood undergraduate automotive marketing and management students against one another to conceptualize and build a new F&I product, while earning course credit. EFG and Northwood created the F&I Innovator of the Year competition to stimulate another level of innovation in the F&I space.

“With changing market demographics, increased compliance, and an evolving dealership model, everyone is looking at how the F&I space will evolve in the coming years,” said John Pappanastos, President and CEO, EFG Companies. “This competition exemplifies the need to develop new ways of capitalizing on these market changes by taking into account fresh sources of inspiration to meet new demands.”

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