This article was first published in the March/April 2018 edition of FixedOps, and written by John Ruble, Director of Sales at Conversica.
As I read the mid-year report from NADA on fixed ops and the shrinking margins on the variable side I couldn’t help but think how important people are becoming. Yes, process and technology are important parts of retaining our employees and customers, but without people everything else is irrelevant. This is likely obvious to those of you reading this.
Inherently we know that the following are the building blocks to happy employees and customers because we live in the day to day frenzy of fixed operations:
- Have the right employees with the right mindset
- Enable the dealership to maintain a personal relationship with EVERY customer
- Wow our customers with transparency and convenience
- Maintain a proactive rather than reactive communication channel with our customers
- Reduce non-productive tasks for our employees
- Alleviate employee “Tunnel Vision” in the service drive
- Eliminate frustration for both our employee and our customer
- Keep a customer happy with our brand
- Increase service visits per year
If you’re still reading this, then you know we are at a tipping point in our industry and we must find a way to repeat and scale these critical building blocks. Look at what Jeff Bezos from Amazon has been able to do with online retailing in such a short time. Many traditional retailers are seeing profits drop drastically and some are going out of business because of Jeff’s vision and ability to execute, repeat and scale convenience to consumers.
We are hearing rumblings of replacing the brick and mortar retail experience on the variable side, but the absolute reality is we will never see that replacement on the fixed side. What we may see is consolidation over the next decade of “Service Centers”. Absolutely CRAZY thought I know. This will likely be influenced by incentives from the OEM to provide the expected building blocks afore mentioned to the consumer. Another likelihood in this scenario is those “Service Centers” will offer a concierge pick up and drop off service to offer wanted convenience to the consumer. This will further increase the critical nature of customer communication to more nontraditional channels.
Let’s put this into a Dealer Operator perspective. On the Variable Side Dealers started adopting CRM in the nineties to manage customers. Yet on the fixed side there is no CRM, or if there is it was an afterthought bolt on to the sales CRM. Why is that? We know service customers are at least as important as sales customers, right? The reason is the sheer volume of records in fixed vs. variable. There is no way a team in service could manager a CRM. Sales may be managing a few hundred records at a time where service would be managing thousands of records. Therefore, CRM hasn’t been adopted in fixed operations and we rely on outdated marketing and discounts to try to retain the customer. What if Artificial Intelligence could manage your thousands of customer records and reduce discounting and employee workload? Sounds impossible right? It’s not and, in fact, it’s being done as we speak.
There are many classifications of Artificial Intelligence and for the sake of our trees (and your eyes for the digital reader) I will only focus on Conversational Artificial Intelligence (CAI), which I will simply refer to as AI for congruency.
I will further narrow the subject to how AI software relates to Automotive Fixed Operations.
An AI mines your DMS to find each lifecycle trigger point throughout the customers complete service journey.
It then reaches out to each customer to communicate and engage that customer per OEM or Dealer preferences with the right message at the right time for:
- Pit Stop
- First Service Visit
- Next Service Visit
- Abandoned or defected Customers
- Declined Services
- State Inspections
AI software then processes the email responses written by Customers and interprets intent and sentiment one by one instantaneously.
After reading an email, the AI persona (assistant) continues the conversation, alerts a dealership employee or stops sending emails to the customer if they opt out, or allows an actual employee of the Dealership to take over as the assistant. The AI can also pause its communication after reading a message from the customer stating they will be ready to service in a certain time frame and then re-engage that customer at that time.
It can also help facilitate the appointment process by serving up your appointment scheduling link at the appropriate time to reduce traditional time spent scheduling a visit.
It executes on natural language in such a manner that the end customer feels they are engaging with an actual dealership employee. The AI is given a name such as “Nicole” to further a human experience for the customer. True natural language processing AI vs. chatbots has a less than 1% occurrence of the end customer identifying they are communicating with AI.
The first question that may come to mind is “Are we ready for this and does it really work”? If you haven’t already answered this many of your peers have blazed the trail for you!
One OEM has already diligently vetted AI and is rolling it out to their dealer base, and a dozen or so top 100 dealer groups have embraced an AI and are seeing game-changing results.
The second question you may have is “What will the AI do?”
- Scale and repeat personal communication to customers in your DMS
- Segment your database so the AI knows the objective and goal for each communication
- Engage at a much higher rate than traditional media and carry on a conversation with your customer in a human manner
- Follow up with each customer that had questions or needed additional information, so no customer is left behind
- Facilitate scheduling appointments for service through your scheduler
- Alleviate menial tasks for your employees and direct them to meaningful conversations with your customers
- Elevate proactive outreach and reduce reactive communications which ultimately increases customer satisfaction
- Alert your team immediately when human interaction is needed
- Provide real time visibility into process gaps and training opportunities
- Function as a turnkey solution that notifies you with context of your team’s next steps
And lastly the question may be “How do I measure the success of my AI (If you choose to adopt one)?”
Analytics and KPI’s are an important part of measuring success and fixing gaps that we may not know even exist. They should also provide an overall sentiment of your customer base and what is lacking or what the customers love. Because the data that an AI can collect is vast and real-time you will have some of the following new insights to establish trends and immediate corrections:
- Engagement rate- What percentage of my customers have engaged with the AI?
- Marketing Metrics- Where should I redirect my money based off the AI capability.
- Employee Performance- You will receive a breakdown of each employee’s satisfaction rating based on the feedback of the actual customer responses.
- Engagement by each specific communication channel and bucket.
And number 5 is the real true ROI of what a good AI can do for your business, Closed R.O.’s.
You will want to employ a very conservative tick sheet of your vendors’ efforts to take credit for a closed R.O. First the AI needs to identify the customer falls into an active communication bucket, the AI must have a valid email, the AI must message the customer, the customer must engage in a two- way conversation, the customer must say yes to doing service, and lastly the customer should show up within a certain timeframe of that engagement, say 30 days.
We have struggled for decades to solve the problem of poor execution on the building blocks, and until now, we had no viable option to scale and repeat personal communication with each customer. Those Dealers using AI in fixed ops are seeing average engagement rates of 34%.
So, to the headline of this article “Will Artificial Intelligence replace your employees this year?” the answer is, no.
In fact, those organizations that fully embrace AI are finding that lift in engaged customers is allowing them to justify additional personnel.
Experts predict that AI will out shadow the advances we saw with the birth of the internet. So the true question should not be, “Will I embrace AI?” but rather “WHEN will I embrace AI?”
AI has become extremely attractive because of cost savings in preventing lost customers and mitigation of low level task load currently handled by humans. And I’m happy to report that you’ll still need plenty of them.