As featured in Digital Dealer on July 25th for Dealer Ops & Leadership and Trending Industry News.
Now more than ever, the very mention of implementing AI in business evokes polarizing reactions from people, especially when it comes to the automotive industry. Selling cars has always been, and always will be, about people. No automated system could ever replace that. It is understandable that some dealerships are skeptical when it comes to AI. But the truth is, when implemented effectively, AI is tremendously helpful to both consumers and dealers alike. AI is not just the future, it’s the present. The most important thing for dealers is understanding precisely how it can work for them.
For a long time, the automotive industry standard when it came to contacting customers was to call, text and email the very second a lead came in. But data has shown that it’s less about making immediate contact and more about being strategic in when exactly you contact a customer. For example, a dealer participating in a case study in April of 2023 reported that 40 percent of their leads were submitted when the dealership was closed. This statistic isn’t surprising when you really break it down. If a customer is contacted by a dealership during their work hours, there is a strong chance they won’t respond. After-work hours are more convenient for a lot of people, and if there’s anything we’ve learned about customers in automotive, it is that convenience is king. AI is accessible 24/7 and it is a helpful tool when it comes to making things easy and efficient for a customer in the early stages of buying a vehicle. AI can provide guests with the immediate gratification of a response at a time that works for them. Of course, a software program won’t always have the perfect answer 100 percent of the time. But it can assist in driving the customers toward the next steps.
The last thing dealers need is yet another portal to log into. So when it comes to AI in automotive, it is important to integrate it into the existing foundation you already have. When everything is kept native to one platform, it makes for a more holistic experience for the consumer and the dealer. When layered with CDPs, dealers are able to utilize AI to be their most effective communication follow-up tool.
A dealership can truly take things to the next level when they integrate AI with their CRM. It’s the separation of consumer activity/action and sales team active/action versus automation and AI. Every dealership would greatly benefit from a deep level of integration with all CRMs. Some people in the industry are apprehensive about this, whether it’s a fear of a competitive product or just of the general unknown, but that is only going to hinder dealers from being able to really develop their strategies and keep up with the OEMs who are already taking action with AI tools.
The automotive industry will continue to see a lot of dealerships come to the market with some kind of AI component. But there are so many variations of what that means. Is it a communication style AI? A Voice AI? What function is it specifically performing? Is it writing vehicle comment descriptions? Enhancing photos and videos? The bottom line for a dealer is asking these kinds of questions to ultimately figure out which AI solution will help their store in operation.
Another thing dealers should keep in mind when looking at AI is to ask the prospective company about their models and how they are training their data. Is it simply creating an interface and doing an API to ChatGPT and calling it AI? Sometimes companies outsource machine learning to another company and the data that the AI is trained in is not always exclusively automotive. It’s about really understanding what AI is and how it will be implemented at the store.
AI in automotive is not a replacement for anything, it is an enhancement for the entire industry. It will help streamline the overall ecosystem by applying integrations and strategies that will increase employee loyalty and retention and significantly strengthen the overall guest experience.