ResearchJul 26th, 2023

How Artificial Intelligence is Improving the Auto Dealership

Dealership AI

A survey done by CDK Global highlights the automotive retail market shift toward Artificial Intelligence (AI). More than half of the survey sample reports successful improvements from AI and anticipate further positive outcomes. In this survey, CDK Global illustrates that AI can have a domino effect on automotive dealership success, beginning with applying technologies such as Machine Learning and Natural Language Processing (NLP) to solve issues within their sales, service, and marketing departments. By improving employee productivity and satisfaction through procedural efficiencies and better guidance, dealerships can not only enhance employee retention rates and revenue growth but also provide quality service to their customers.

According to CDK Global, the department that benefits the most from AI is sales. The Sales department can use AI to improve employee efficiency and productivity through various methods. Fifty-six percent of dealerships are already using AI to attract new customers by identifying, targeting, and converting sales leads. Then using an AI-powered Virtual Assistant (VA), sales can routinely rekindle interest in dormant leads. Furthermore, VA allows prospective and current customers to contact dealers 24/7 through email, text, and internet chat. Meanwhile, AI technology like NLP is helping dealerships handle customer calls by creating a more efficient method to identify customer needs through voice and language, leading to higher rates of service and sales appointments. From a marketing perspective, AI can convert customer data into profiles that can help dealerships target their marketing efforts and quantify their ROI. All these procedural efficiencies made possible by AI create opportunities for automotive dealerships to increase their profits. In fact, 47% of automotive dealerships are already using AI to improve their revenue growth and customer service.

These technologies prove the effectiveness of AI to not only increase the profitability of automotive dealerships, but to create an overall higher level of employee satisfaction. The survey showed that 59% of automotive dealerships agree that finding and retaining quality employees is a monumental challenge in creating a successful business. With high rates of employee turnover due to burnout and inadequate guidance, AI offers various avenues of solutions. In the service department, AI technology can be used to organize vehicle repair-related data and use it to properly guide technicians through the inspection process more effectively and efficiently. Another effective use of AI is to simplify workflows by automating repetitive and mundane tasks, and enabling intelligent searches can improve employee productivity and satisfaction, leading to better employee retention.

According to an IDC Employee Experience Survey, when employees feel productive and engaged in their roles, it leads to a higher quality experience for their customers. If AI enhances the work experience for dealers and dealership employees by effectively and efficiently assisting them in their day-to-day tasks and long-term endeavors, then it empowers dealerships to deliver better customer service and obtain higher levels of customer satisfaction.

Improved employee satisfaction translates to better overall performance and engagement, which can also help with marketing efforts and customer service in front of the customer.

Dealership workers in various departments (such as service, sales, and F&I) are utilizing AI tools to enhance their productivity. These tools are becoming more precise, which ensures that marketing strategies and technologies can appropriately match the correct vehicle to the correct customer at an earlier stage of the process. With third-party repair shops dominating the market, dealerships can also use AI to differentiate their customers’ experiences and achieve better satisfaction.

This ultimately leads to customer loyalty and retention, a trending concern for dealers.

John Sternal is a Partner and Director of PR & Social Media at Merit Mile, where he oversees strategic client programs for PR, social media, and communications research. He has been writing about the automotive industry since 2005 and has more than 25 years of experience in building brands and creating brand awareness through PR, communications, and media strategy.

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