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How AI agents are extinguishing service 'heat cases' and protecting dealership profitability
Featuring Tasso Roumeliotis, Founder and CEO of Numa
Welcome to another episode of the Car Dealership Guy Podcast.
In this episode, Tasso Roumeliotis, Founder and CEO of Numa, discusses how to calm upset service department customers before they burn profitability, why 911 started his entrepreneurial journey, when AI should answer phone calls and when it shouldn't, and much more.
1. Dealers’ resilience and adaptability.
Tasso notes that dealers are inherently entrepreneurial and adaptive. Regardless of market shifts like the rise of EVs or robotaxis, dealers will evolve and thrive. He labels this resilience as “anti-fragility,” seeing it as a reason to invest in dealerships over other industries like real estate. This resilience, combined with the industry's size and potential for transformation, makes it a promising sector for innovation.
2. Addressing communication gaps in dealerships.
Dealers’ number one customer complaint is poor communication. The reason communication in many dealerships is so poor is due to the complexity of the business: employees often have to talk to people in multiple departments to care for one customer, hurting their ability to deliver speedy service. Using AI, however, companies can tackle internal communication inefficiencies, especially if they redesign their processes around the technology.
“If you look at, for example, in the service department, why is communication so bad? Why is it so hard to give a status update? Because the information resides in other departments and there's internal communication that's lacking. Typically, it's done in a very analog way. I, as a service advisor, have to walk to the shop or walk to the parts department to get the answer to my information.”
3. Redefining the “AI-native dealership.”
Tasso likens AI's potential to electricity's transformative impact during the Second Industrial Revolution. Just as electricity redefined manufacturing processes, AI has the potential to dramatically enhance dealership operations. Dealers should see AI, not just as a new tool to perform tasks but also as a way to innovate entirely new ways of running their business.
4. Solving “heat cases” with AI.
Heat cases (situations with angry customers) can severely impact profitability—dealerships with 10% more heat cases see 50% less profit than the average. Using generative AI, dealers can predict and address those issues before they escalate. By proactively handling dissatisfied customers, the right tools can help preserve CSI scores, employee morale, and profitability.
“The heat case is, it's like the butterfly effect. You have an angry customer that is gonna drive by your dealership every single day and never buy a car from you, never get the car serviced. They're gonna go to another party, they're gonna tell 15 people about how much you suck, and then another party a week later. They're gonna abuse your employees, your employees are gonna feel really awkward about their situation.”
NUMA — Numa is the first AI agent platform for auto dealerships. Address communication breakdowns with customers and get full visibility into all service interactions. Numa answers every call, rescues and books service appointments and lets service teams see all customer communications in one place. Increase Repair Order revenue, expand your customer base and increase CSI. Learn more numa.com/ or visit them at NADA, booth 7012
TradePending — TradePending makes dealers' websites convert better with their trade-in tool and payment calculator on steroids, makes it easier for sales teams to sell with video and digital vehicle brochures, and helps grow your service business with video for service departments and service offers management that turns your website into a service marketing machine. And they do it all under one roof. Check ‘em out in Booth 851 at NADA and learn more at tradepending.com.
AutoFi — Whether online or in the showroom, AutoFi enables dealers to build trust and fast-track the deal to F&I. Learn more about AutoFi's digital retailing and showroom solutions at .autofi.com/cdg.
5. Improving responsiveness in service departments.
On average, it takes 23 hours for dealerships to respond to customer inquiries. Service departments are especially challenged when it comes to handling clients over the phone, due to the large volume of work they experience during busy periods. AI phone assistants can service employees by handling basic caller questions, providing updates and setting appointments. Aside from streamlining communication, integrations with dealership management software and customer management software provide managers with additional visibility into the communications process.
6. Building AI tailored to dealerships.
Generic AI isn’t enough to serve dealers — if the industry is to benefit from AI it needs tailored solutions. This is why the best AI tools allow dealer clients to personalize their toolkit to suit their customers. Of course, retailers that have ample amounts of data are best positioned to benefit from machine learning.
7. Prioritizing service over sales.
Tasso explains that most AI vendors focus on sales departments, overlooking service in the process. This is a big problem for dealers, since service departments are a major revenue driver, accounting for nearly 50% of a dealership's profitability. Service departments are also plagued the most by inefficiencies: in a study conducted by Numa, the company found that service teams miss an average of 158 appointments per month, representing millions of dollars in potential revenue. Dealers desperately need AI tools for their service departments to improve responsiveness and boost the number of appointments they receive.
8. Future impacts of autonomous vehicles.
Advancements in Tesla’s self driving technology could revolutionize dealership opportunities. Tasso projects that by 2026, entrepreneurs will begin building robotaxi fleets: these startups will need someone to provide maintenance, parking, and financing for fleets. He sees this as a natural extension of dealers’ adaptability and an opening to create new revenue streams.
“The person that's running their little robotaxi business, right? They're not gonna park their six cars in their garage. They need somewhere to park them. These cars need to be cleaned all the time. They need power…Who's gonna finance these? These are entrepreneurs that lack capital. So all the metrics that you run your business on, you're gonna be able to both finance, sell, and then offer as a kind of service to these entrepreneurs.”
9. Overcoming dealer reluctance to AI.
While some dealers resist adopting AI due to fears of losing control over customer interactions, Tasso believes the technology should be seen as an internal tool to improve operations. By focusing on non-customer-facing applications like improving responsiveness and accountability, dealers can gradually grow more comfortable with AI without losing control over their customer service operations, even as they integrate the technology into their core processes.
10. The future of AI in dealerships.
Looking ahead, Tasso envisions dealerships employing "AI agents" as virtual staff members. These agents will handle complex tasks, enabling human employees to focus on higher-value responsibilities. He predicts a future where AI becomes an integral part of dealership operations, driving innovation and efficiency across the board.
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