How AI Can Help You Sell More Cars in Your Dealership
AI is changing the way organizations across industries do business, including in the auto industry. Car dealerships can use AI to enhance business operations, decision-making processes, and customer experiences.
Unlock the potential of utilizing AI in car dealerships. Learn how advanced algorithms streamline inventory management and enhance customer experiences and how Podium’s AI can help you boost sales and save time.
This article will provide a guide on how to leverage AI to drive more sales at your car dealership. We’ll review the benefits of AI BDC tools, including Podium’s AI BDC, and how they can accelerate your revenue and growth.
What Does AI Look Like For The Car Industry?
AI is technology that enables computers and machines to perform tasks that would otherwise require human intelligence or intervention, like learning, reasoning, and problem-solving. There are various components of AI, including:
- Machine learning: Enables systems to learn from data and improve over time without explicit programming.
- Natural language processing: Facilitates interaction between humans and computers through speech and text.
- Computer vision: Allows machines to interpret and understand visual information. AI applications span diverse domains, from virtual assistants and autonomous vehicles to medical diagnosis and financial analysis, reshaping industries and daily life.
AI is reshaping industries, including the auto industry. Machine learning algorithms, for example, enable car dealerships to analyze vast amounts of data to predict customer preferences, optimize inventory management, and personalize marketing efforts. Natural language processing empowers dealerships to engage with customers through conversational interfaces like chatbots, providing instant assistance and improving customer satisfaction. Computer vision applications enhance safety and efficiency in manufacturing processes, aid in vehicle inspection, and enable features like autonomous driving.
7 Benefits of AI for Car Dealerships
Like any small business, car dealerships can unlock several benefits from using AI to automate routine tasks and streamline processes. Let’s take a look at seven major ones below.
Faster Response Time
AI tools can reduce the time it takes for dealerships to respond to incoming lead inquiries. With the right tool in place, potential car shoppers get immediate responses instead of waiting for dealership staff to be available to read and reply to new messages. This is a game-changer for businesses—helping them beat their competition by responding to potential customers first instead of letting them wait and go to another dealership.
Cost Reduction
AI technologies help car dealerships reduce costs through optimized inventory management. Leveraging machine learning, AI can analyze various data points such as historical car sales data, market trends, and supplier information to predict demand more accurately, manage inventory levels efficiently, and reduce excess stock or shortages. This can help car dealerships lower carrying costs and improve their profit margins.
Increased Sales Efficiency and Productivity
AI tools can automate other tasks in car dealerships, like pricing optimization and lead prioritization. This not only helps reduce operational costs, it also boosts productivity and efficiency. By automating tasks, AI frees up sales teams to focus on what matters most: closing sales.
Improved Customer Service and Personalization
AI-powered chatbots and virtual assistants enable dealerships to provide round-the-clock customer support, addressing inquiries promptly even outside regular business hours. AI tools can also offer customers personalized recommendations, such as vehicle options and financing plans, based on analysis of past behaviors and preferences. This type of personalization can help car dealerships enhance the overall customer experience.
Better Lead Management
AI algorithms analyze vast amounts of customer data to identify patterns and behaviors indicative of purchase intent. By prioritizing car sales leads based on likelihood to convert, sales teams at car dealerships can allocate resources more efficiently, focusing their efforts on prospects with the highest probability of making a purchase and ultimately growing the dealership effectively.
Data Analysis and Insights
AI enables car dealerships to extract valuable insights from large datasets, uncovering trends, customer preferences, and market dynamics. By leveraging advanced analytics and predictive modeling, dealerships can make data-driven decisions regarding inventory management, pricing strategies, and automotive marketing campaigns, optimizing their operations for greater success.
Shortened Sales Cycles
By automating repetitive tasks such as data entry and lead qualification, providing instant and personalized responses to customer inquiries, and identifying high-intent leads based on their behavior, AI can help move customers through the sales funnel more efficiently, reducing friction and expediting the path to purchase. This shortened sales cycle not only improves customer satisfaction but also increases dealership revenue.
5 Steps to Implement AI in Car Dealerships
Implementing AI in car dealership operations can greatly enhance efficiency and productivity. Here’s a detailed guide on how dealerships can integrate AI into their processes:
1. Identify Areas for Automation
Begin by assessing current workflows and identifying tasks that are repetitive, time-consuming, or prone to errors. Common areas for automation in car dealerships as well as other businesses include:
- Inventory management
- Customer support
- Lead generation and nurturing
- Data analysis
2. Research and Select Appropriate AI Tools
Research various AI tools and platforms available in the market that can help automate the areas you identified in the previous steps. Additionally, consider factors such as scalability, compatibility with existing systems, ease of integration, and cost-effectiveness.
Look for tools that offer all components of AI, including machine learning for predictive analytics, natural language processing for customer interactions, and computer vision for inventory management.
3. Reach Out to AI Solution Providers
Reach out to AI solution providers or vendors specializing in automotive retail to discuss your dealership’s specific needs and objectives. Request resources, demos, or a free trial if available to ensure that you find a solution that meets your unique requirements and goals.
For example, Podium offers AI-powered tools for managing leads and customer communications, online reviews, and other communications, which can significantly improve your car dealership’s customer engagement and reputation management.
4. Train and Upskill Employees
Invest in training programs to ensure that employees are equipped with the necessary skills to effectively utilize whatever AI tool you choose. Provide comprehensive training on how to operate and integrate AI into existing workflows, emphasizing the benefits and best practices for maximizing efficiency and productivity.
5. Monitor and Evaluate AI Implementation
Implementing AI at your car dealership requires ongoing monitoring of its performance and impact across various dealership operations. To maximize its ROI, you’ll have to:
- Collect feedback from employees and customers to identify areas for improvement and optimization.
- Measure key performance indicators (KPIs) such as sales conversion rates, customer satisfaction scores, and operational efficiency metrics to assess the effectiveness of AI-driven processes.
- Regularly review and refine AI strategies based on insights gained from monitoring and evaluation efforts.
3 Best AI Tools for Car Dealerships
To help you find the right AI tool for your car dealership, here’s a look at three of the best options that can help improve your daily operations. Find information on their features, pros, cons, use cases, and cost.
Podium AI BDC
Podium’s AI BDC helps dealerships turn leads into sales. By responding to leads automatically with AI, dealerships can beat the competition, warm leads automatically, and sell more cars. With a high-quality of responses, customers interact with the AI naturally and your staff saves time.
“Podium’s AI BDC sold 20 cars out of the 41 test drives he scheduled over the last 2 weeks.”
—Tina Tasche of Van Horn Auto Group in Plymouth, WI
With Podium’s AI BDC, your dealership can get access to the same benefits:
Reply to new leads 2x faster.
Don’t let your competition beat you to new leads first. Podium’s AI BDC helps your dealership engage with leads 2x faster than they would with a manual process for every message. AI takes care of responding to every conversation automatically. Plus, Podium’s AI assistant is smart enough to answer FAQs, ask follow up questions, and keep the lead warm.
Get shoppers to a test drive faster.
When leads ask a question about a vehicle—looking for a specific color or something under X amount of miles—Podium’s AI BDC reviews the message and responds with a single, clear message and a follow up question to keep the lead warm. Your staff will spend less time on early-stage leads and more time closing deals.
Share real-time inventory with car shoppers
A lot of lead requests come in the form of inventory questions. For dealerships, this can take up too much time and backlog responses. With Podium’s AI BDC, inquiries are answered automatically with real-time information and a follow-up question to keep the lead warm.
Let AI answer vehicle feature questions
Don’t let your staff waste time answering questions about specific vehicle features. With Podium’s AI BDC, lead questions are answered automatically. The AI shares the feature information you have about the vehicle the shopper is interested in—and keeps the conversation going without requiring a sales rep for these early conversations.
Escalate the right conversations to management
Some conversations need a quick escalation to a management team member. In this case, Podium’s AI BDC is smart enough to route conversations about specific topics to the right manager while keeping the conversation moving with the car shopper.
Field vehicle history inquiries
Leads have vehicle history questions, but those can take serious time away from your sales team and other staff. With Podium’s AI BDC, you can get questions answered quickly and automatically, help leads get what they need, moving more potential customers closer to a closed sale.
Schedule service appointments without extra staff time
Don’t let service inquiries get in the way of your dealership booking appointments or selling more cars. Podium’s AI BDC manages these requests automatically—answering service questions and directing customers to the right place to make an appointment.
Podium’s AI helps dealerships like you sell more cars and save more time:
→ Reduce review response times by 65% with AI-generated replies
→ Increase the chances of landing a sale by 23% with AI automated responses
→ Boost response and click rates by 3x – 4x with AI messages using high-performance campaign data
Learn more about Podium’s AI BDC.
ChatGPT
ChatGPT is a conversational AI tool powered by OpenAI’s GPT (Generative Pre-trained Transformer) model. It can help car dealerships to deploy chatbots on their websites or messaging platforms to answer customer inquiries and provide assistance 24/7 and with less staff. These highly flexible and customizable chatbot solutions can tailor responses to specific customer queries and preferences, provide information about available inventory, schedule test drives, and answer frequently asked questions.
However, while ChatGPT excels in natural language understanding, it may occasionally generate responses that are not entirely accurate or relevant, requiring human intervention for complex inquiries. (The chatbot used by Chevy of Watsonville in California is an extreme example of the need for human intervention.)
Building a chatbot using ChatGPT (ie. a custom GPT) is currently available only to ChatGPT Plus and Enterprise users. ChatGPT Plus is $20 per month. The Enterprise subscription plan can vary depending on usage and customization requirements.
DALL·E 3
DALL·E 3 is an advanced image generation AI model, also developed by OpenAI. DALL·E 3 leverages deep learning algorithms and large-scale training data to produce diverse and visually compelling images. Car dealerships can use this model to generate highly realistic images of vehicles and customers based on textual descriptions or other specifications provided to use in online listings, digital marketing materials, and virtual showroom experiences. This can significantly reduce the costs of marketing and advertising for a car dealership.
However, while DALL·E 3 excels in generating realistic images, there may be limitations in terms of specificity and fine-grained details, particularly for complex or unique vehicle features.
Pricing for DALL·E 3 varies by usage. Depending on image size and quality, an image may cost between $.04 and $.08.
Learn how Podium’s AI BDC can help you respond to customers and leads faster than the competition, send review invites and responses, and create marketing campaigns in half the time.
