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Helping customers understand the value of add-on products
How does your dealership demonstrate the value of financial add-on products to customers? GAP insurance, warranty and others provide many benefits but there might also be reasons a particular product would not be suitable.
Providing customers with the right information so they can make an informed purchasing decision is essential – and from 1st September 2015 providing that detail will be enforced more rigidly by the Financial Conduct Authority (FCA) when selling GAP insurance.
For more information, download our FREE eBook: Get ready for FCA Regulation changes in September 2015.
How does the FCA measure value?
A recent study by the FCA of the general insurance marketplace found that some financial products provided poor value for customers. This was reviewed through a range of measures, including looking at the amount of premium paid out in claims, the way in which insurance products are sold to customers and the retail prices at point of sale.
The regulatory body is now looking to introduce a standardised measure of value across the insurance market. It is hoped this will increase competition between firms and benefit consumers.
The FCA published a discussion paper on the subject in June 2015, where it set out a range of value measurement options. They are inviting feedback from the industry before 24th September 2015. The FCA is also asking firms to put forward alternative options for increasing transparency and product quality.
To learn more about the FCA’s discussion paper and to put forward your feedback, visit the FCA website.
Helping customers to understand add-on products
From 1st September 2015, it will be compulsory for all dealers to provide customers with prescribed information on GAP insurance. The pre-sale information – which covers cost, benefits, exclusions, limitations and more – must be delivered two clear days before the conclusion of the GAP insurance sale.
For further information check our blog: FCA regulations on prescribed information ahead of GAP sales.
Providing customers with the information they need to make informed purchasing decisions on all add-on products is essential. The provision of clear, legible information, paired with great verbal communication, not only helps build customer relationships it also boosts sales and retention rates.
Staff must be able to communicate with customers in a clear, friendly and informative manner. That comes from fully understanding the products they are selling as well as effective training. Investment in staff training will have a direct impact on sales – as MINI Cooper York found out to their benefit.
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