A.I. expert: Rise of the A.I. employee in car dealerships

Welcome to another episode of the Car Dealership Guy Podcast.

On today’s episode, Eric Rea, Co-Founder and CEO of Podium, sits down to talk about machine learning and how dealers are using “A.I. employees,” aka chatbots, to drive everything from sales to service appointments.

You can stream the full episode now on YouTube, Spotify, or Apple.

1. Eric’s background in the business.

Although his father worked at a dealership, Eric himself wouldn’t become professionally involved with the automotive industry until later in his adulthood. His first job would instead be in technology, working for the International Atomic Energy Agency in Vienna, Austria. However, he always knew he wanted to start his own business, and, in 2014, he got his chance.

2. The start of something big.

After deciding he no longer wished to work in Austria, Eric returned to the U.S. He recalls that around this time his father began complaining to him about the negative Google reviews his business received. This led him to come up with the idea of a service that would help companies improve their online ratings and expand their presence. Partnering with a friend from college, Eric would go on to co-found Podium.

3. The world has changed.

While Podium started out as a push to help businesses get more five-star reviews through texts, things have changed a lot over the last decade, especially where technology is concerned. Although face-to-face communication is still key, many processes today can be accomplished by artificial intelligence (A.I.). In fact, Eric believes the arrival of A.I. will drastically change the business world's trajectory.

4. Dealers face two big challenges today.

Lead conversion and training. Both take an extensive amount of time, money, and effort, but have to be taken seriously in order for any storefront to succeed. Eric believes that today’s technology has come so far that software can effectively take over both processes from dealers, giving them more time to focus on growing their business.

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5. Leveraging A.I.

Jerry, the “A.I. employee,” is the company’s solution to these two challenges. Since its launch, the chatbot has already helped Podium’s 7,000 dealer clients drive unbelievable performance across their operations, from sales to service to BDC. In one instance cited by Eric, a dealership group was so satisfied with the success of Jerry that it decided to open a new storefront with only a single human BDC worker, whose primary job would be to oversee Podium’s A.I.

6. Podium’s history with A.I.

Podium decided to shift to A.I.-powered chatbots around 2016, inspired by Facebook’s own progress in the field of machine learning. While online bots were much less effective at the time, the arrival of large language models (LLM) thanks to companies like OpenAI have drastically improved their engagement and utility.

7. Why does A.I. work so well?

While LLMs are the driving force behind chatbots, vendors like Podium can finetune the A.I. for a specific purpose, in this case serving car buyers. Eric emphasizes that a customized and well-trained chatbot is roughly as effective as a human at a wide range of tasks. But that’s not what really sets A.I. apart from typical employees. Eric explains that the main advantage of an A.I. is that it’s working 24/7. Many customers, especially those with families or busy jobs, don’t have time during the day to call dealerships. But by engaging with an A.I. through text, shoppers can arrange appointments and ask questions at their convenience, even if it’s late at night and the BDC team is asleep. Because of this, Eric estimates dealers using Podium see up to a 30% increase in sales conversion and up to an 80% increase in test-drive scheduling.

8. The cost advantage.

Eric acknowledges that dealers who can afford to assemble and train a world-class BDC team may not see any real performance improvement by switching to A.I. However, he notes that most dealers would still want to cut costs from their operations where possible, and chatbots provide an affordable way to do that without impacting their operational effectiveness. Computers can also conduct outreach in place of staff members, giving them more time to work on things that drive revenue.

9. Limitations of A.I.

That being said Eric acknowledges that A.I. isn’t perfect, adding that human interaction will always be a part of the car buying process. ai’s limitations are especially evident during the setup phase. Chatbots have to be attuned to a dealership’s specific business model and can make mistakes without the proper instruction. However, Eric still firmly believes in the advantages of machine learning. He recalls one instance where Podium’s chatbot made a mistake at one of its client’s dealerships, which promptly canceled the service after only a few days. However, due to an oversight, the chatbot was left on for another week. Customers suddenly started flooding the dealership for test drives, catching the business off guard. After some investigating they discovered that the A.I. had been scheduling appointments and pulling in new leads. Eric notes the dealer ultimately decided to retain Podium’s services.

10. A.I.’s long-term impact.

Eric believes that A.I. has the power to change not only how we sell cars but also how every industry engages with the public. The technology is already so advanced that even if LLMs stopped learning and improving, they would still dramatically alter the way businesses operate. Today’s early adopters will be at the forefront of this transformation. Eric envisions a world where dealers have so many A.I. employees that they will need to use dedicated platforms just to oversee all of their software.

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