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How A.I. is sneaking into car dealerships — and shaping the business
Featuring Leigh Ann Conver, Senior Director of CDK Data Services
Welcome to another edition of expert insights from the Car Dealership Guy Podcast, an episode recap that breaks down the high-level takeaways from the conversation.
On today’s edition, Leigh Ann Conver, Senior Director of CDK Data Services, discusses how A.I. is quietly integrating into dealership operations, the top A.I. trends for 2024, and how dealerships of all sizes can leverage A.I. to boost car sales.
1. Getting started in the car business.
Leigh Ann entered the retail auto space 26 years ago and has spent the entirety of her career using data to help dealers improve performance and stay in tune with the market. In one of her first jobs, she played an instrumental role in connecting dealers to the power of the Internet. Since then, technology has evolved tremendously, and so has the way in which the car industry interacts with and leverages data.
2. A.I. and car dealerships.
This is an exciting time to be in the auto industry. While the car business has often lagged behind other sectors in terms of technological advancements, many dealers are realizing the power that artificial intelligence and other modern innovations can offer. However, they remain focused on fixing their real-world problems rather than adopting new tech to be seen as tech-savvy.
3. The value of A.I.
As one might expect, CDK’s study found that more dealers are incorporating A.I. into their business processes. However, there was a surprising shift this year compared to the previous survey.
The number of dealers who feel they are getting value out of their new A.I. tools is currently 65%, down from 74%.
With adoption on the rise, this might seem counterintuitive. But Leigh Ann explains that now that A.I. has become more commonplace, it is no longer seen as “that shiny new object.”
Retailers are now starting to realize that some of the A.I. products on the market won’t actually solve their problems. Although this is causing dissatisfaction to increase, it is also leading to a healthier understanding of what A.I. can actually do and where it can be put to the best use.
4. What is A.I….actually?
A.I. has become a catch-all phrase for a variety of products and services, which can lead to confusion over what dealers are actually doing with their technology. Chatbots are the most commonly used form of A.I. in the retail automotive space, but other kinds are emerging. Some are using machine learning for predictive modeling.
However, A.I., in any form, is only as strong as the data it’s given, and for retail auto purposes, dealers must be selective when it comes to feeding information to A.I. products.
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5. Virtual assistants.
One key pain point faced by many dealers is staffing. Retailers are struggling to find and train the right people for certain positions, leading to weaknesses that, for years, were impossible to solve.
“This is one of those areas where A.I. is being specifically used to assist.”
Virtual assistants can plug up holes in understaffed dealerships, introducing benefits like 24/7 phone reception and appointment scheduling. Most virtual assistants can also talk in different languages, expanding a dealer’s potential customer base.
6. Leveraging predictive modeling.
Predictive analysis helps boost dealers’ bottom lines and enhances the abilities of their workers. These types of A.I. services have a variety of use cases. For example, Leigh Ann explains that machine learning software could use existing data to guess what kind of maintenance or repair work a caller will need, allowing employees to recommend specific products or services.
In one instance, she recalls that a dealer used predictive modeling to boost operations sold by 20% in the service bay.
“It’s helping the customer too,” she adds, explaining that A.I. offers more transparency since it is making decisions based on real-world data.
7. A.I.’s prevalence.
A.I. is used everywhere today — most dealers have probably been using the technology well before they ever realized it.
Despite its quick adoption curve, roughly 40% of retailers in CDK’s survey admitted that they don’t really understand what A.I. is or how to use it.
Leigh Ann believes this is simply due to the fact that the technology is already so ingrained in the industry that users simply don’t realize they rely on it for their day-to-day.
She notes that 35% of dealer apps and 50% of dealer software subscriptions use A.I. in some form (based on results from the Fortellis marketplace), making it unlikely that any retailer has never used A.I. in some fashion.
8. AI and employees.
The data suggests that A.I. has yet to evolve to a point where it can replace workers. Dealers today are instead relying on the technology to improve their team’s performance. Leigh Ann believes the area most likely to benefit from a human-A.I. partnership is lead management, as the software boosts engagement and operating power.
“It just helps augment your everyday life.”
On the service side, A.I. is helping technicians provide better customer service, allowing them to keep track of things like client sentiment and previous visits.
9. Is A.I. only for big dealers?
Both large and small dealers are likely to benefit from incorporating A.I. into their business processes. Although bigger retailers may see more ROI from insights and data, most, if not all, dealerships are already using machine learning to boost profits, even if they don’t realize it. For smaller retailers wondering whether they should invest in an A.I. tool, Leigh Ann believes there is little risk and lots to gain, granted they do their research to find the best product for their needs.
10. Where can A.I. help the most?
A.I. is making the biggest impact on sales in the car business, matching the experience of other industries. Service is a close second, helping retailers improve the client experience and boost customer retention. Marketing is a lagging third, offering some benefit through data and predictive analysis but not to the same extent as marketing and sales.
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