Why AI matters for your Dealership | DealerAI
Artificial intelligence is steadily taking over different aspects of life. From transportation to shopping, AI’s influence is growing all the time. Particularly in the last few years, the growth of AI has been phenomenal — according to wardsauto.com, around 79% of businesses are planning to use AI by 2021.
Not Merely a Trend
AI is not merely a trend, but a massive advancement in technology that will inevitably benefit businesses with significant improvements and increased efficiency. Over time, companies from almost every sector are increasingly transitioning their operations toward AI. The automotive dealership space is certainly not an exception.
When it comes to AI for automotive, one may think that it is about driverless cars or robot-powered production lines as these are what we often see in science fiction. Looking at the operations perspective, AI’s application in an automotive dealership helps businesses solving complex business problems using data, analytics and advanced machine learning algorithms.
Lower Cost Per Sale with AI
Dealership businesses that are leveraging AI can experience reduced cost, improvement in sales, and increased sales margins. According to Lotnix.com, AI can deliver a dramatically lower cost per sale by 80 to 85%. AI technology uses the data collected from previous sales campaigns with favourable and unfavourable outcomes and makes better decisions in the future. For instance, if a campaign spends too much money on a prospect that didn’t convert, the machine would take this as unfavourable to avoid future over expenditure. The technology continually learns until it finds that equation for the best available solution.
This approach is far more precise, and it is cheaper and faster, but it is also more efficient in generating leads and finalizing deals than e-mailing or cold calling.
Personalized Marketing by AI
Dealerships are moving from mass marketing to personalization because of the shift in customer demands and behaviours. According to peak.ai, 88% of millennials look up the car they want to purchase before visiting the showroom.
AI can handle your entire marketing campaigns on its own by customizing your e-mails, banner ads, etc. to the right target audience at the right time. With AI-powered personalized marketing, dealerships can create personalized follow-ups and build a stronger relationship with clients and prospects.
Operation Cost Reduction from AI
When it comes to fixed operations, AI empowers dealerships to save money by maintaining leaner parts of inventories and ordering fewer parts that are likely to be returned to the automaker or become obsolete. AI can save operational costs from the entire supply chain process as well. According to McKinsey, by 2025, AI is expected to provide $173 billion in cost savings across the whole automotive supply chain, ranging from procurement to research and development.[1]
AI — A Necessity
Using AI technology is going to be a necessity in this era. Otherwise, it would be hard for your business to survive in a highly competitive market. Therefore, to thrive as an auto dealer, it is vital to embrace AI technology.
Your car dealer business will be in a better position than your competition if AI is adopted. Your business will be making more sales and be proactive in catering to your customers with a personalized experience based on their demands while saving a considerable amount in operational costs.
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[1] SECTOR FACTSHEET GLOBAL FOOD TRENDS. https://xynteo.com/sites/default/files/download/2019/10/Sector%20factsheets.pdf
Originally published at https://dealerai.com on May 27, 2020.
