Tech venture builder. Co-founder and CEO at RAVIN.ai.
AI is upending nearly all industries and businesses, including those that have been around for decades, like auto sales. Car dealerships that relied on traditional methods for advertising, customer service, management, inspection and repairs—and for nearly all other aspects of the business—are feeling these changes and are under pressure to become more efficient.
Dealers who want to remain ahead of the curve should consider how to adopt AI and machine learning tools—because their competitors are doing so. As more sales shift online and more automakers consider selling directly to consumers, the right AI tools can help dealers become more competitive, allowing them to achieve their goals of higher sales, increased customer retention, more efficient administration and better customer experiences.
How Data Transforms Sales And Advertising
In the past, sales were a hit or miss. If the right person was reading your ad or listening to your radio or TV spot, and they needed a car, liked your brand and they were in the right demographic, they would come in for a test drive. In order to make a sale, dealers and customers would bargain until they made a deal.
AI upends that process—but can also improve it. By using data gathered from manufacturer or dealership databases and external sources, dealers can focus their outreach campaigns to specific demographic groups that are most likely to become customers.
Ad campaigns can be conducted through a variety of social media channels with AI guiding the messaging for the specific demographic being targeted. By reaching the potential customers that are most likely to become actual customers, dealers can save time, money and effort, while ensuring a much higher return on their outreach costs. The data they gather on their customers based on an initial sale can also help them retain that customer when they decide it’s time to buy another vehicle.
Using Chatbots To Better Serve Customers
AI has a reputation of being a cold, faceless technology. But the truth is that AI can help humanize the purchase experience for customers. Sophisticated chatbots that draw on advanced AI-based conversation technologies help customers feel that someone is listening to them and immediately answering their questions or concerns.
Advanced AI technology enables chatbots to answer a wide range of questions, and systems will also flag queries that the chatbot can’t answer, enabling a human member of the dealership to quickly intervene and answer.
Trust, of course, is one of the most important elements in the customer-seller relationship, and studies show a close correlation between trust and communication; the easier it is for customers to get answers, the more they are likely to trust the dealership, and the more likely they are to buy—and come back again. AI-powered chatbots can help dealers build that communication—and trust.
Enhancing Repairs And Inspection
Here, too, AI has an important role to play—reducing costs for dealers, while ensuring that customers get what they need. AI inspection systems—which, full disclosure, my company offers—can parse through many parts of a vehicle and quickly determine what needs to be fixed. Often, a symptom, like an overheated engine, could be caused by the malfunctioning of a small part; AI systems can suss out the problem, saving mechanics time and effort.
AI in the repair shop also helps increase customer trust. Instead of relying solely on the recommendation of a mechanic—whom some customers may suspect of misleading them in order to increase their bill—an objective, AI-based diagnostic and inspection system can identify what should be repaired, and even how much it may cost.
And in the case of an accident repair, a report provided by an AI system using advanced vision technology to pinpoint damage, and help adjusters determine responsibility, is also more likely to be accepted without questions by a customer’s insurance company.
Preparing For The Sales Model Of The Future
As the world transitions to electric vehicles, the sales model is transitioning as well, with more sales moving online and with some manufacturers, including Ford and Volvo, preparing to sell directly to consumers in the future.
In this changing sales environment, the role of dealers may be diminished. With AI, the best dealers can remain relevant and survive the competition that direct online sales will bring. By targeting customers in their own local markets, and appealing to them with special deals and personalized service—using AI-powered tools—dealers can build a sales and service platform made to order for the mid-21st century.
Anonymized data on customer preferences, leisure activities, price points and thousands of other details can help dealers develop campaigns that precisely target the customers most likely to be interested in a specific vehicle. Dealerships should consider partnering with data companies that specialize in developing algorithms to accomplish this, and use this data to develop sales and marketing campaigns to reach specific customer groups. In this way, dealers will be able to efficiently utilize their limited resources.
Dealers have always faced challenges—competition, customer retention, customer satisfaction and more—but those challenges pale in the face of what the future holds now, as social and legal forces change the way people shop, buy and get service. AI tools can help dealers even out things, giving them a fighting chance of not only surviving but thriving in this new era.
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