Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter.
Today’s guest is Graham Anderson, CCO and Co-Founder of KENECT, who breaks down how dealers are solving the #1 bottleneck in fixed ops, the best times to text customers, how Gen Z is flipping the script on dealer communications, and more.
1. Text messaging has become the preferred customer communication channel.
The shift in consumer preferences is undeniable and generational.
"90% of consumers would prefer to interact with a business, dealership specifically via text rather than a phone call. As Gen Z, like Gen Z has money now, you know, like they have real jobs."
Text messages are read 98% of the time and within three minutes 95% of the time, while answer rates for phone calls from unknown numbers have dropped below 15%.
2. AI is solving the "catching the vision" challenge for dealers.
The biggest hurdle is helping dealers understand how AI adoption will transform their operations.
"It feels like we're at a similar point here. It's a little bit like the personal computer. It's a little like the iPhone where AI is becoming this hugely critical part of our businesses, but helping dealers to catch the vision of it being a good thing for their dealership."
Like the introduction of tractors to farming, initial resistance gives way to dramatic productivity gains once adoption occurs.
3. Fixed ops is where AI is making the biggest immediate impact.
Service departments are seeing the most tangible benefits from AI automation.
"We usually see just from our text product, we'll see a service department's phone traffic going down about 35% just because the text is handling that so effectively."
Dealers are achieving a 25% lift in service revenue on average across all brands using AI-powered scheduling platforms.
4. Integration complexity remains a major adoption barrier.
Dealers are managing an overwhelming number of technology solutions that need to work together.
One Honda/Subaru dealer referenced in the interview runs "80 pieces of technology" in his dealership, from DMS systems to marketing tools to communication platforms.
The real challenge is figuring out how AI tools fit into existing tech stacks.
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5. Voice AI capabilities are rapidly advancing beyond basic automation.
Modern AI voice systems can handle complex, nuanced conversations that feel natural.
"Our voice product is amazing and dynamic and every time I use it, I'm blown away at how good it is...If somebody starts speaking Spanish to it, it immediately moves over to Spanish."
These systems can handle full receptionist processes, transfer calls, and schedule appointments without human intervention.
6. The automation sweet spot is in routine, high-volume tasks.
AI excels at handling the repetitive communications that bog down service teams.
"They're spending their time on building relationships, figuring out how to upsell, potentially equity mining with the customer. They're doing things that really drive value rather than menial tasks all day."
Service agents can instead focus on strategic, interpersonal work while AI handles appointment scheduling and basic customer inquiries.
7. Recall management is being revolutionized by AI outreach.
Traditional recall processes using mail and email are being replaced by targeted text campaigns.
One Texas dealership mentioned to Graham that using AI-powered text outreach instead of having service agents call down printed lists of customer, is "effectively at this point zeroing out all of [the store’s] recalls."
With this technology, speed and completion rates out-do traditional methods.
8. Industry specialization is creating long-term competitive advantages.
Companies that go deep rather than wide in automotive are building stronger, more profitable businesses.
"It makes it so that we don't get distracted trying to build a solution for hair salons while I'm trying to serve a multi-location auto dealer that's doing $700 million in revenue."
Vertical focus means deeper DMS integration and industry-specific solutions that other platforms can't match.
9. AI adoption varies significantly by dealer, not brand.
The effectiveness of AI tools doesn't correlate with luxury vs. mainstream brands as expected.
"We've got a Mercedes dealership using the same product that the Subaru dealership is using...those people still want to communicate via text more than a phone call."
Both high-volume Toyota dealers (6,500 ROs/month) and lower-volume Cadillac dealers (600 ROs/month) see similar percentage improvements.
10. The future of dealership AI will be deeply conversational.
AI systems are evolving toward having complete customer history and multi-department integration.
"The deepening of AI in the dealership is our number one focus, having it permeate through different departments...dealers are going to be in a place, I think in the next two years, where a lot of the basic communication that's going on with their customers can be done automatically through a 24 hour a day, seven day a week, 365 day a year AI tool."
Like ChatGPT remembering conversation history, dealership AI will know customer preferences, service history, and buying patterns across all touchpoints.
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