Ford Motor Co. CEO Jim Farley once called the company’s commercial business unit, Ford Pro, its “secret weapon.”
Today it’s not so secret: Ford Pro turned a $2.4 billion profit in the second quarter and is on track to generate nearly $8 billion for the year. In addition to commercial vehicles such as the F-150 or Transit, Ford Pro offers fleet buyers financing through Ford Pro FinSimple, part of a push to become a one-stop shop for business owners.
FinSimple offers a commercial line of credit for fleets of any size, vehicle leasing and purchasing as well as charging infrastructure for commercial EVs. It also launched an insurance product this year.
Jim Drotman, executive vice president of Ford Pro FinSimple, spoke with Staff Reporter Michael Martinez about the business and its growth plans. Here are edited excerpts.
Q: What’s the business case for creating Ford Pro FinSimple?
A: When Ford Pro was created, we did a lot of work around what the customer experience needed to be. It’s not just vehicles anymore. It’s software, charging, service, finance and they all come together to make it super simple for the customer. We know now that for business customers in particular, one of the most valuable things they have is time. They want to run a business. They don’t have time to go negotiate, turn in credit applications, wait for a decision to come back.
It’s not as simple as a retail customer; they have a FICO score, they get approved. For a business, we need a tax return, their balance sheet, bank account information. Today, they can come in and go through a digital process and be ready to go. Looking at what FinSimple could do, we were super excited about changing that whole journey for a business customer.
What sort of efficiencies does Ford Pro FinSimple provide compared with how the process used to be?
In the past it was a very inward-focused view of what we wanted, sort of a risk-based view. If a business had a certain amount of vehicles outstanding, then they’d have to get some sort of higher-level approval; we’ll kind of push you into that line of credit. It was fax machines and paperwork, mail and back-office work. You look at all that and say it’s totally antiquated.
We started to look into how can we simplify that journey. So we started with a digital application for a commercial line of credit. It was a great opportunity to change things. A customer, on their own time, can submit an application and upload their information on their own terms. We started at zero, when Ford Pro started, and now 80 percent of our volume comes through this digital channel.
How do you typically interact with customers?
So the dealer will introduce us to the customer most of the time. We have a field team that actually will go out sometimes with dealers, make joint calls to the customer to understand what their business looks like. We don’t just want to sell one truck or van or whatever it may be.
They may not be ready now, but over the course of the next 12 months, what will the needs of their business be? We sort of have a consulting conversation with them. And you can bring in the software team to talk about telematics, maybe the charging team, and have a holistic discussion with these businesses. And then we as FinSimple can go back and do the underwriting. In Canada and the U.K., we’ve begun to proactively talk with customers who maybe just apply for a single vehicle. And we’ve started to pre-qualify them for a line of credit. The cool thing we’ve seen is that almost all the customers will take the offer. I think there’s a larger opportunity.
You recently launched an insurance product in three states. What have you learned and do you see an opportunity to use connected software to offer customers cheaper rates?
We launched in the first quarter in Illinois and then we rolled out to Arizona and Tennessee in the second quarter. It’s very early days, but we’re above our projections. We got a few lessons learned with the customers in terms of how we go to market and how we leverage independent agents and what our direct channel is going to be.
We really haven’t had much with the direct channel yet, which is digital for us. And in addition to that, we’re going to roll out into more states. There will be several more states launched this year. With the connected data, we think there are opportunities. You know, as I said, we’re kind of building out the models as we speak. But, to me, the real win for the customer is the one-stop shop. I can come in and know it’s insured when I drive off.
Near-term, do you see FinSimple trying to build out its insurance product and refine the commercial line of credit or do you plan to offer new products?
For us right now, it’s about building the platform. I think where we’re focused is on the financing products that we’ve got as well as the insurance product and what we can do from a bundling perspective. We’re going to start, in those three states [where FinSimple offers insurance], offering some form of lower insurance rates if we get a telematics subscription. We want to start to see how do we simplify for customers and make it easy and also provide maybe a little bit lower total cost of ownership for choosing the services.