top of page

3 Factors auto dealers must consider for their tech investment

Service providers around the world such as Airbnb, Uber, and Amazon have redefined customer service so rapidly that we have come to expect a high level of customer service from all of our consumer interactions.

These online or digital experiences offer a seamless and straightforward way of booking the next stay, next ride or finding the next exciting movie or gizmo.

We seek to bring the efficacy of these digital interactions to local businesses, which primarily rely on non-digital interactions with their clientele

Can human interaction based experiences be as compelling as online or digital experiences? Can local businesses use the same technologies, concepts, and solutions to create outstanding customer service?

Absolutely, we believe that local businesses can bolster their human interactions to the level of the online digital companies, and with very similar results. In this blog, we discuss the capabilities that can be enabled with technologies and solutions related to those driving the online/digital experiences. While the concepts considered in this blog are relevant to a wide variety of local businesses, we will focus on auto dealerships as a concrete example.

How does it all work?

Broadly speaking, the online experiences are enabled by focusing on three key steps: learn about the customer through their interactions, personalize and simplify each interaction, and predict/recommend the next step. This machine learning/AI based learn-personalize-predict cycle is used with great success across a strikingly large set of businesses.

These technology-enabled experiences also have a unique characteristic – the technology is entirely behind the scenes. The only external evidence is the increasing simplicity in doing the task at hand.

For a car dealer, the central human relationship is with a service advisor. Can a service advisor use capabilities similar to those, which power the online experiences from digital service providers of the world? Can a car dealer use these capabilities to increase customer service experience or even their car buying experience?

If, as we think it is, the answer to these questions is a resounding yes, then what do car dealers need to make a marked improvement in customer experience?

There are three essential steps to better customer experience, more effective service advisors, and higher sales lead generations. They are:

    1. Identify, support, and enrich customer interaction points

An auto car dealership interacts with customers across their car buying and car service journeys. Each part of the journey has particular customer interactions.  For example, scheduling, service check-in, and car pickup interactions make up the service journey. Auto dealers have an opportunity to support each one of these steps with information, recommendations, and predictions. Let’s consider some of these journeys:

Service scheduling:

Information about previous service appointments can be used to inform the next appointment. Did they book in the morning? Which day seems to be working the best for them? Did they need a ride to drop-off and pick-up? What service does their car need at this time? Are there offers that benefit this customer? Service options and offers can be provided based on the vehicle’s history. Similarly, scheduling can be simplified based on the customer’s history. Introducing these capabilities into the scheduling journey increases the convenience for the customer and makes service scheduling as easy as ordering coffee through the Starbucks app for a pickup on the way to work.

Service check-in:

Customers expect their auto dealers to be the experts for their car and thus are receptive to inputs provided by the service advisor.  Can a service advisor recommend a different set of service options at check-in? What about highlighting offers that the customer may have missed?

Service check-in provides a unique opportunity for the service advisor to increase customer experience. Excellent service experience typically leads to increased customer satisfaction. So, it is isn’t shocking that 85% of satisfied service customers end up buying cars from the dealerships that treated them well.

Service pick-up:

Every service customer is a potential lead for a trade-in or a purchase of a new car. When a customer walks in for a service appointment, it is an excellent opportunity for the sales team to talk to them regarding their next purchase.

Car dealers can benefit from information and recommendations about walk-in customers both from a buyback and sales perspective. Does the customer have a car that has a high trade-in value? At what price will the trade-in be profitable for the dealer? Which new or used vehicle is the customer more likely to buy?  Is the customer getting ready to buy their next car? The dealer can use the answers to these questions to make an appointment or go over to talk to the customer while they are in the dealership.

Car buying:

Generally, auto dealers have an arsenal of standard offers they run to incentivize new customers. What if auto dealers have answers to these questions: Is the potential customer in the market to buy a new car? When are they likely to make the purchase? What kind of a shopper is the customer? Is he/she a value shopper? What is most important for the customer, upfront cost, monthly payments, or reliability? Auto dealers could use this information to personalize offers for their leads.

Personalized offers will not only increase the customer experience of a target lead but also raise the conversion rates for a dealership.

Considering the customer interaction points and how to enrich them is the first step towards an exceptional customer experience that today’s consumers have come to expect.

    2. Start with the available customer and vehicle data

Providing information and making subsequent recommendations to improve customer interactions requires an existing knowledge base of consumer and vehicle data. Does this mean a car dealer needs to start collecting data before they can reap the benefits of recommendations and predictions?

Contrary to popular belief, many customer and vehicle datasets are readily available. Demographic, lifestyle, and behavioral datasets can help understand the customer better. Vehicle service, recall, and pricing information can help drive next step recommendations for a vehicle. For car dealers that have limited or no access to their historical data, external data provides immediate benefits. However, dealers with historical data the external data brings in new factors that provide an opportunity for deeper insights.

     3. Continuous learning to enhance customer interactions

One of the hallmarks of technology-enabled experiences is the constant learning that is now possible with machine learning and AI1. For example, Spotify uses AI to tailor your music according to your preferences. Google Photos automatically labels photos using AI-based image recognition. All of these AIs “learn” their subject material over time and thus recommend actions based on past behavior. Machine learning and AI can power fantastic customer experience, from intelligent scheduling to recommending service options to predict whether the service customer who just walked in is considering buying a new car. Data collection across recommendations, predictions, and subsequent behavior improve machine learning over time.

An average auto dealer in the US has between 30,000 to 36,000 service customer interactions and about 4,000 interactions for car sales in a year. Any technology investments in working with customers will dramatically improve these interactions.


Commenting has been turned off.
bottom of page