Modern Dealership – August 2018

VOLUME 2 • ISSUE 3 AUGUST 2018

AI

Meet Your New Team Member

Conversica’s MICAH BURGESS:

‘The Sky’s the Limit’ With AI Get SEAN STAPLETON’S Tips For Building Trust in a Digital World

contents table of

volume 2 • issue 3 • august 2018

on the cover

F E AT U R E S

20

AI Roots in Automotive, But the Sky’s the Limit

Micah Burgess, VP of Sales at Conversica

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18

Unlock Your Potential Through Building Digital Trust

40

The Intelligence Behind Improved Customer Connections

Sean Stapleton, CEO & Co-Founder of Dealer Teamwork

D E PA R T M E N T S modern sales

4 Tips for Growing Your Personal Brand

Baron Washington Jr., Internet Sales Manager at Gary Crossley Ford

Artificial Intelligence: Getting Smart About Customer Retention Kendall Billman, Senior Vice President of AutoAlert

modern fixed ops

AI Plus a Human Touch for Stronger Customer Relationships Kristina Mueller, Service Concierge/Customer Relations Manager at Gary Crossley Ford

modern operations The March to AI

Dave Davis, Automotive Writer & Consultant

Social Media AI Marketing Guide

Joey Little, Director of Social Strategies at AutoAlert

modern communication Using Analytics to Power Creativity Dan Moore, President of VistaDash

AI Reduces Google Ad Costs and Can Eliminate Single Keyword Decisioning Brian Pasch, Founder of PCG Companies

modern dealerhip insights The Rise of AI AI: Part of the Team

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in the box

IN TH BOX E

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With AI Sales Assistant “Kelly.”

She may be artificial, but she's an intelligent member of the team.

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from the editor: “There is a world market for about five computers.” – IBM Chair and CEO Thomas J. Watson (1943) When a new technology is emerging, it’s impossible to know how far it will go in reshaping our world. It’s been said that those who live through new technology have no idea what they’re experiencing because it takes years, usually decades, for the impact to be seen.

That’s where we find ourselves now with artificial intelligence. There is no question that AI can help us solve problems in new ways, but we have yet to see just how far it reaches. In this issue, we explore how one of the biggest AI tech companies got its start in automotive, and is helping dealerships sell more cars today (“Conversica: AI Roots in Automotive, but the Sky’s the Limit” p. 20). AutoAlert’s Kendall Billman dives into the details of exactly how AI helps dealerships (p. 24), and Sean Stapleton shares tips for building trust in a digital world (p. 18).

Are you AI-ready?

AI + A HUMAN TOUCH

FOR STRONGER CUSTOMER RELATIONSHIPS

BY KRISTINA MUELLER

Service Concierge/Customer Relations Manager Gary Crossley Ford

Like many of you working in customer relations, I am confident that I can turn the vast majority of negative customer experiences into positive ones. This comes from years of experience handling a wide range of issues – many of which are similar in nature – and having a genuine interest in helping people.

How does artificial intelligence come into play in such a delicate field, where human emotions and human flaws are major factors?

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AI might not be able to help directly with compassion and empathy, but it certainly gives those traits a chance to shine. Specifically, it helps me and my team address issues sooner. If a customer has a bad experience and goes home to vent to their partner, and I call later that day, instead of in a week — or never — that makes a big difference.

Timing is also important because Customer Service Index surveys from Ford and other OEMs go out pretty quickly, and addressing negative experiences prior to the survey’s arrival in the customer’s hands is crucial.

Negative Reviews Are a Reality No matter how well trained your team, how tuned into and caring about the customer, they’re going to make mistakes.

And even if they don’t – even if they do it right 100 percent of the time – you’ll occasionally receive less-than-great reviews. Some people just like to complain, or have a hard time calling anything “excellent,” especially after a day in the service drive where waiting and spending money are par for the course.

Combining AI with a human touch can turn that around. AI allows me to reach out to my service customers within 24 hours following their appointment. I find that this quick show of concern catches them off guard in a good way and helps show that I care about their experience.

This is how it works: The customer comes in, an RO is opened in the DMS, the customer gets service, and within 24 hours of the RO closing, a very basic survey goes out to the customer via email from AutoAlert.

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The customer has the chance to rank their experience as “excellent,” “satisfactory,” or “poor.”

When satisfactory or poor are selected, the customer is sent to a (nonpublic) website to leave the details of their complaint. Only I and my team have access to the site. Now we have the chance to address grievances privately and turn bad experiences into good ones.

Keep the Good Going Once you have the intelligence on your customers – that they didn’t have an excellent experience – it’s important to act right away. I call that very same day.

I’ve learned that people tend to vent more in email or on social media. But when I call, they’ll be straight up with me, and usually less harsh. In fact, they usually soften up quite a bit when I have them on the phone. This is when I get to find out what really happened!

Dealerships that don’t have a real person making calls like this will struggle. Customers need to know you care. Once they do, I find they come around pretty quickly.

This makes Ford happy, because like all OEMs, they put quite a bit of weight into CSI and question anything-but-excellent customer reviews.

Of course, not all experiences are bad and need to be turned around. The beauty of our service lane surveys is that they go out to all customers.

If excellent reviews are given, the customer is directed to the review site that matches their email address (e.g., Gmail users are taken to Google reviews) to leave a public review.

So the good just keeps growing for our customers, and for us. If you would have told me even five years ago that AI would help us build better customer relationships, I would have been skeptical. But through ensuring that our happy customers have the opportunity to share their experiences easily, and that we have the chance to address every unhappy customer immediately, AI has become a crucial part of our relationshipbuilding team.

4 TIPS FOR GROWING YOUR PERSONAL BRAND WITH BARON WASHINGTON JR. INTERNET SALES MANAGER Gary Crossley Ford

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YOU COULD SAY BARON WASHINGTON JR. TOOK TO SELLING CARS LIKE A DUCK TO WATER.

Not everyone sells 15 cars their first month in the business. He was also named Sales Person of the Year two out of his four years at his first dealership: Dennis Sneed Ford, near Kansas City, Mo. One month, he sold 34 cars. Not bad for a Green Pea – or anyone.

Was it luck? Perhaps, if like the saying goes, luck is what happens when preparation meets opportunity.

Coming from a service background, Washington Jr. had worked for over a decade at one of Kansas City’s best fine-dining restaurants, Trezo Mare – first as a waiter, then as a bartender, and finally as a manager – before being recruited to join the Dennis Sneed team. His extensive customer service skills certainly paid off at the dealership, but he also spent months researching every aspect of the business.

“As long as you take care of people, everything else will take care of itself,” he says. “Most of [your customers] know what they want anyway. You just have to be there to help them and give them guidance, not try to sell them something.”

After four successful years at Dennis Sneed Ford, Washington Jr. got the opportunity last year to join the team at another Kansas City dealership, Gary Crossley Ford. His strong service background would continue to play a role in his success, but going from one of six sales consultants to one of 20 or so meant that he was going to need to make some adjustments to his day-to-day approach.

For one thing, customers consistently came into the store asking for someone by name, which happened much less frequently at Dennis Sneed.

Social media was one way Washington Jr. thought more people could learn his name and get to know him.

THIS WAS NOT FAMILIAR TERRITORY. At Trezo Mare, he never saw a link between his work and social media.

“I thought Facebook was a waste of time,” he says. “I’d see my friends on it at the restaurant, and it was like, you’re at work – why are you playing around on Facebook?”.

At Dennis Sneed, most of the business came in through internet leads, making social media less of a solution. But at Gary Crossley, he saw the value of social as a sales tool. So just like he did when making the change from restaurant work to selling cars, Washington Jr. got down to researching. He learned everything he could about social media marketing and sought out those who were successful at it at

the dealership level. Right away he recognized that some of the very best weren’t really selling cars, but were using the platform to share and inspire. Two of his favorites remain Shawn Hays and Bill Hav. “Consumers do enough research. We don’t need to talk about cars,” Washington Jr. says. “People buy from people they like and can trust.”

Interested in growing your own personal brand? Here are Washington Jr.’s four tips for getting started.

BARON’S TIPS TO GROW YOUR BRAND 1. GET INSPIRED.

3. WORK HARD.

“I came across Shawn Hays, who’s part of the ‘Sales Hustlers’ Facebook group that I’ve since become a part of, and I just immediately found real value in what he’s doing, with Facebook Live and videos. Every day on my drive in, I listen to him. Bill Hav’s ‘Dashboard Diaries’ is awesome. He gave me the idea to make a video of people’s reactions, not just post a picture of them with their new car. It’s more impactful.

People really respond to it.”

“I don’t keep track of my hours, but I easily work over 50 hours a week. Even on my day off I come in. If you’re not at the store, you tend to miss deals. And as you’re working deals, you don’t know when they’re going to buy. I personally give customers my cell phone number, and a lot of them will reach out to me on Facebook. If they tell me they’re ready to buy, I come in. I’ll also invest in myself by turning my spiff money into giveaways. The last thing I gave away was a $50 gift card, which you could win just by sharing my post. Every week, I do a business spotlight. It’s a good way to create community and increase exposure. You can be the best at what you do, but if nobody knows, what use is it?”

2. BE YOURSELF. “You’ll be your own toughest critic. Don’t be afraid of what people might think, or that you won’t know what to say – just start. The first videos I did, I thought they sucked, but people really liked them. And the more you do something, the more confident you get.

I’m pretty laid-back, and there’s room for every type of personality, not just people who are loud and high-energy all the time. I really like being inspired, so I started posting inspirational memes, and I’d get great feedback: ‘Hey man, thanks, I really needed that today.’ I love selling cars, and I love helping people, and I think that does come through.”

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4. HAVE PATIENCE. “Success isn’t going to happen overnight. And if it does, it probably isn’t going to last.

I got great advice from my mom. One thing she said was, ‘Always listen.’ You don’t have to jump at every opportunity, but you can always listen. That has a lot to do with patience.

If you follow these steps–get inspired, be yourself, and work hard with consistency, commitment, and a game plan, you’ll do great. It probably won’t happen overnight, but once it takes off it’s hard to stop! Just have some patience and keep working.”

Make the end of every sales cycle ...

... the beginning of the next one.

AutoAlert’s CXM keeps the sales cycle going and going. Because now, Data Mining, Social Media, Messaging, CRM, and Reputation Management are all combined into our Customer Experience Management (CXM) platform that can be used by everyone in your dealership. So you’ll know exactly where potential customers are in the sales cycle and when they’re most likely to come back and buy again. And since we’re constantly creating and adding new products, you’ll always find a tool that’s useful for you.

3 PRO TIPS FOR OPTIMIZING YOUR MARKETING With more tools available for gathering data than ever before, the world of marketing has opened up and is fast becoming the most exciting aspect of running a business. There’s so much to know about the consumer, and technology gives much of this info to us in real time.

With Dan Moore President of VistaDash

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Clearly this is exciting for the numbers nerds among us (left-brainers), but according to VistaDash President Dan Moore, it’s just as exciting for the creative-types (right-brainers).

“Analytics doesn’t take away from creativity,” he says. “It gives creativity a roadmap.”

Moore is left-brain dominant – a bit of data he got on himself while working for VinSolutions shortly after it was bought by AutoTrader in 2012. Employees were asked to take the 120-question Hermann Brain Dominance Instrument psychometric assessment to learn about how they think and how they process information. Scoring polar opposite to Moore was coworker at the time Joey Little, now Director of Social Strategies for AutoAlert.

“It got me thinking: Do we have too many people out there on social media going by the seat of their pants, not thinking about the end result?” Little says. “The last few years, I dove into data.”

And that is where the best results are born, according to Moore: where analytics and creativity meet. Here are Moore’s three tips for ensuring that your marketing is a good balance of both.

1.

FIND A TRUSTED, AGNOSTIC DATA SOLUTION

First and foremost, your data must be transparent, coming from an agnostic vendor, Moore says. This means that the vendor doesn’t have any hidden agenda, is willing to share all data with your dealership, and is dealer-focused.

But just as important as having transparent data is having data that’s meaningful.

“Our job is to get past the fluff of the gray area and let the data speak for itself,” Moore says of VistaDash. “With page views, bounce rate, time spent on page, etc., the information you’re actually looking for can get lost. What dealerships really want to know is, do I have shoppers or do I not have shoppers? And are they opportunities?

That’s what we focus on.”

It’s important that the vendor displays the data in a simple, easily digestible way that leads to action, but also provides an option for additional help with interpreting data and digging deeper in case it’s needed.

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2.

TAKE DATABACKED, CREATIVE ACTION

Now that you have all that powerful data, it’s time to get creative. This is where AI falls significantly short of human capabilities. Your dealership team can take advantage of the power of social media, customer experience, and other relationshipbuilding tools and tactics to create opportunities for new ways of marketing.

Moore gives an example of how data drives creativity: Say your data shows that your lease penetration is really low, your finance is high, you make money on the back end of the service contract, and your average buyer is 40 years old. Your creative mind might say, “Great, I’m going to create a unique finance offer targeting the 35 to 45 age group. And then I’m going to do a $199 crafted lease special to the younger gen, trying to pull them into the brand.” Then you come up with the creative imagery, messaging, delivery, etc.

3.

FOLLOW THE RESULTS, AND PIVOT

Once you’ve verified your data and taken action, follow up on the results.

Capitalize on what’s working, and adjust what’s not.

One fairly recent example of how changing up your marketing can lead to incredibly powerful results happened during the 2016 presidential election. Hilary Clinton’s team spent way more than President Trump’s did, but Trump proved successful. Many contribute that to the way in which Brad Parscale, Trump’s digital director, used Facebook to micro-target critical groups and even entire states, like Wisconsin and Pennsylvania. He made tiny adjustments to social media campaigns, like changing the color of Trump’s tie, based on what was working with what audience.

Can that be too time-consuming?

“He won, so it does work,” Moore says. “Look at the data, pivot. Look at the data, pivot. If you’re pivoting and making ground, that’s time well spent.”

For further marketing inspiration, Moore recommends checking out the WWE (yes, World Wrestling Entertainment) as an example of a group that’s doing both traditional and digital marketing right.

“Watch the elections too. As a marketer, that’s when I go back to school,” he says. “I don’t get caught up in the politics; I get caught up in the movement. What are they doing on social? How are they pivoting? It’s fun to watch, and you can learn so much.”

Modern Dealership would like to congratulate VistaDash for recently being named a Trusted Provider by J.D. Power’s - Power Information Network! You can learn more about this distinction at vistadash.com.

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or too long the automotive industry has been plagued by stereotypes cloaked with negative perceptions. But when was the last time we stopped to ask ourselves why?

How do we combat these stereotypes?

F

The first step is to uncover the meaning and proper implementation of Digital Trust. I bet you are saying to yourself, “Isn’t this issue’s focus on artificial intelligence (AI)?” You are correct, and AI and Digital Trust are closely related, so let’s look at them deeper.

So, how does this apply to your dealership’s practices? To start, let’s tackle the stereotype of the typical car sales person. We all know it, but none of us actually picture ourselves that way. Yet the perception persists because many dealers have not shed the old, outdated, and ineffective practices involved in advertising, managing, and promoting their business. Digital Trust is about being transparent, respectful, and protective of the data you collect on consumers and how you use it.

Artificial intelligence by definition is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. AI is technology collecting and analyzing data on an ongoing basis and building algorithms so that automated technology can react autonomously. Wow, that can sound complicated!

Make it easy for consumers to find the information they need in the way they search, so making a purchase is not a stressful process. Consumers are jaded and automatically look for the “it’s too good to be true” aspect of offers when they shop.

So, be transparent, honest, and upfront with your merchandising. Don’t draw shoppers onto your website on false promises or hide crucial details in fine print, because you’ll never see or hear from those shoppers again.

Many companies claim to have AI built into their platforms and solutions, but because the term AI is so overused and covers such a broad range of capabilities, it’s hard to tell what it really means. That’s one of the biggest reasons why

Google research shows that 95 percent of car shoppers use digital as a primary source of information. It also shows that they generally collect all the information they need to make a purchase in two weeks or less. What’s more, the amount of phone

Unlock Your Potential

T hr ough Building Digital Tr us t implementing Digital Trust into your dealership is so important. If a company is not upfront about why and how their solutions are considered “AI,” that probably means they are overembellishing their products and services. HUGE RED FLAG!

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calls and lead submissions has decreased, and in-store visits before making a purchase have dropped from five down to one or two.

This means you have fewer opportunities to make a good first impression. With fewer opportunities and more information available to immediately validate or invalidate your claims, building a relationship on trust is crucial. The most important thing to remember is that trust is not built on one interaction, but it can be shattered with one poor one. Build trust into all that you do.

By Sean Stapleton CEO & Co-founder of Dealer Teamwork

Here are 3 keys to building Digital Trust in your store today:

1.

Provide a consistent shopping experience from end to end, i.e., your ads to your website. This means if there’s an offer in your ad, it better match the offer on the landing page to the penny.

2.

Be specific, diligent, and consistent across all communication channels when it comes to syndicating your messages. If someone searches for monthly payments or lease payments on vehicles in your area, do you show up? Do you answer the shopper’s question with relevant details, meaning more than MSRP? Tricking

people into visiting your site with lines like “See deals on our website” and then dropping them on your homepage or an unfiltered SRP that never answers their question is one of the biggest mistakes that happens all too often.

3.

Don’t waste your time, effort, and money spent to drive form submissions, calls, and in-store visits by not being prepared to reinforce the Digital Trust you have built online. That means your entire staff must be aware of your online offers and how to handle them in-person, whether they answer the phone, are a floor M O D E Ror ND E Aa Lservice E R S H writer.

I P. C O M 19 salesperson, are

CONVERSICA

AI ROOTS IN AUTOMOTIVE, BUT THE SKY’S THE LIMIT When sales assistants at Conversica reach out to dealerships to follow up on a lead, they have a higher rate of engagement and success than the actual sales reps do on their own.

AND THE ASSISTANTS ARE 100 PERCENT AI.

With Micah Burgess VP of Sales at Conversica

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SCORE ONE FOR THE BOTS. And for Conversica. The fast-growing international company, based in Silicon Valley and Kansas City, is responsible for designing some of the smartest AI in the market today. But they’re not just creators of the software; they’re also users. Or as Vice President of Sales, Micah Burgess puts it: “We drink our own champagne.”

“Closing a deal with a new dealership, it’s great to get to say, ‘Oh, by the way, you were just experiencing our AI at work,’” Burgess says, in reference to talking to dealers who have conversed with the company’s own assistant, Rachel. “They’re usually totally surprised, which is great for demonstrating how human the conversation can be.”

Dealerships aren’t the only ones seeing the value of Conversica’s appointment-setting software and jumping on the bandwagon. Other clients include companies in the tech sector, the health care industry, education, the travel industry – even a couple of NBA franchises.

One of the things that gets Burgess pumped about the way the company is branching out into different verticals is that, much like artificial intelligence in general, these different companies’ and industries’ experiences feed into each other so that Conversica can keep growing its product and improving its capabilities.

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“We get to see the tools and inner workings of Fortune 500 companies,” he says. “Then we take what we learn and apply it to automotive, which is where we got our start.”

AUTOMOTIVE AND AI

Many dealerships are still weighing the benefits of investing in AI technology. Burgess says that this is due in part to the fact that the majority of dealers – maybe the top 100 or so aside – operate as a small business.

“We’ll hear dealers say that AI is way over their head – or that they’re ‘just a little dealership,’ and will they benefit from it?” he says.

But today, automation already rules. AI has hit the point where it not only simplifies business as a costeffective solution, but creates opportunities that would otherwise be missed.

Take your BDC, for example. The average dealership receives somewhere around 300 to 400 leads per month, according to Burgess, which require a small team to handle. What Conversica wants to know is, is this effective? Are you getting the most out of those leads?

In many cases – and not just in automotive, but in any business – staff will pre-judge leads, focusing mostly or even solely on the higher ROI ones and investing more time with them, Burgess says. Which means they’re likely missing out on some hidden gems.

“Dealers use their AI assistants to touch every single lead,” he says. “Nobody slips through the cracks. And

every opportunity is looked at equally, as nothing more than an opportunity to do business.”

That equal treatment is a huge benefit of Conversica’s AI assistants, which don’t prejudge leads and don’t cherry pick only the best ones with which to engage. Once the lead has engaged, the AI determines exactly how to shape the conversation so that a demo, a phone call, or an in-person appointment can be set up with a sales associate. And with an engagement rate of 35 percent, it’s proven to work. The assistant even handles all of the follow-up, completely automatically.

“What we’re seeing is that customers feel more comfortable with this nonaggressive, casual approach and are more inclined to respond,” Burgess says.

Conversica also prides itself on taking what a dealership already has and improving upon it: same budget, same lead flow, but with better management and results. Plus, little management of the actual software is required, and it starts working the day it’s implemented.

That is what Burgess doesn’t want to see dealerships miss out on – a simple solution that works for all sizes of businesses.

WITH AI, EXPERIENCE RULES Artificial intelligence is popping up in every corner of our world today, but it’s been a long time coming.

Humans have been gathering data online and creating programs that “teach” computers how to analyze information for decades. And it’s here, 22

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in the roots of AI, that Conversica finds itself at an advantage over its competition.

“The more AI learns, the smarter it gets,” says Burgess. “We’ve been doing this for over 10 years,

which is about as long as AI has been around as an option. That gives us a big advantage over the competition, because many of those guys are just getting started.”

Conversica prides itself on its large, varied team of data scientists who study the data and how it feeds the company’s algorithms, and perfect the functioning of the software. Dr. Sid Reddy, Conversica’s Chief Scientist and Senior Vice President, who also sits on the faculty at UC Berkeley and Northwestern, is recognized internationally as an expert in Computational Linguistics and Natural Language Processing – the fuel behind Conversica’s AI. Reddy has created dozens of NLP systems for healthcare, business, life sciences, e-commerce, etc. His LinkedIn page best sums up his work: “His research ranges from using functional theories of grammar for association extraction and question-answering to acquiring lexical resources through distributed word vector representations learned from big data and applying them to improve the state of the art in sequential labeling tasks.”

Basically, he helps Conversica’s conversational AI get smarter. No easy task. Another leader on the Conversica team is Werner Koepf, Senior Vice President of Engineering. His strong leadership skills – and doctorate in Theoretical Nuclear Physics – ensure that all the engineering, data sciences and operations work is delivering one thing: a conversational AI solution that works, works easily and delivers real value for dealers.

Just one of the team’s big successes was recognizing the importance of software integration. For dealerships, this means seamless and deep CRM and DMS integration. The better the integration, the better the AI will work, and the easier for dealerships to succeed with it.

It’s that dedication to providing a superior product from day one that has made Conversica a leader in the field and taken the company so far, and it’s what will take it even farther.

THE ROAD AHEAD A question Burgess gets a lot these days is why he thinks Conversica is growing so fast. His answer?

“We were in the right spot at the right time to capitalize on new AI capabilities and apply them to solve an age-old problem of poor lead follow-up.”

He’s not the only one who thinks so. The company has raised over $50 million in funding, has been recognized with numerous awards and is frequently noted as one of the top AI companies.

Other exciting news is the partnership this July with AutoAlert, which has begun incorporating Conversica technology into its software.

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Conversica continues to invest heavily in product development, adding new capabilities such as SMS texting, multiple languages, and improved reporting and ROI analysis. The company also provides an AI Assistant tuned just for automotive service conversations, which AutoAlert will feature, helping the Fixed Ops side of the business engage and retain more customers.

“Conversational AI assistants are helping more dealerships close new customers and retain them through their lifetimes,” said Burgess. “We see a bright future ahead for AI working hand-in-hand with humans to dramatically boost the customer experience in the automotive industry. The sky is the limit!”

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GETTING SMART ABOUT CUSTOMER RETENTION

BY KENDALL BILLMAN

SENIOR VICE PRESIDENT OF AUTOALERT

Artificial intelligence is literally everywhere these days, but it has been building for decades to its current level of saturation and accessibility. Twenty years ago, I was certified in business intelligence software, which had machine-learning (ML) components but was limited to highly trained users. Now even kids are using AI-backed technology.

As AI continues to grow at an exponential rate, we will no doubt see unprecedented opportunities for improved problem-solving in all areas of life.

Machine learning uses specific algorithms to At gather the dealership, and interpret that a potential means smarter, customer’s more efficient online behavior. ways to Each find and clickkeep of the customers mouse isvia predictive an opportunity behavior to collect targeting metadata and the that ability can to drive be used behavior. to gainEven a better though understanding AI involves of massive a data-crunching potential customer’s via complex intent to algorithms buy. The traits and ML, when someone donedisplays right it provides online (through actionable social solutions media that and are key easy wordto searches) implement show – solutions the telltale thatsigns lead to of more what they cars intend sold, with to buy increased and even profits, when while they seamlessly intend to make improving the purchase. the customer Whereexperience. someone spends time online, what products they are browsing and how they use social media to locate those things are all examples that can be collected and analyzed so that you can send relevant messages to hook them into buying.

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THE DIFFERENCE BETWEEN AI AND ML Before we dig into the details of how AI can help grow your dealership and the automotive industry overall, let me give you a brief definition of both artificial intelligence and machine learning, as these terms can and quite often do get confused.

AI is when computers/machines perform tasks that are characteristic of human intelligence, e.g., understanding language, recognizing objects and sounds, planning, learning, and problem solving.

ML is how machines achieve AI, without being explicitly programmed to do so.

That is, instead of humans entering insanely long lines of code to cover as many possibilities as we can, machines “learn” by being fed huge amounts of data and recognizing patterns, etc.

Dealerships are a prime environment for putting AI into action due to all of the data available via the DMS, social media and the internet, etc. The more data fed into ML, the faster its learning capabilities. And the faster it learns, the faster it reaches its goal.

Dealerships today have a huge opportunity to stand out in their customers’ minds by making their experiences unique, meaningful, and memorable through the use of artificial intelligence.

It starts with knowing your customer better than the competition, which requires powerful ML. AutoAlert technology can (1) handle large amounts of newly created data, (2) largely increase the amount of data inside the models, (3) analyze the diversity of data in models, (4) take into account the timeliness/context of the data, and (5) determine that the measurements of the data actually produced something valuable. Bottom line, our AI has few limiting factors in regard to learning about your customers.

Which is powerful because you can compile and process huge amounts of data on your customers, as well as the data’s interactions beyond rules-based systems, allowing you to make better predictions – and better meet your customers’ needs, both today and in the future.

For your current customers, this includes opportunities that your competition could never touch, because data is pulled from your DMS and analyzed along with other data to create the most appealing, relevant offers.

Not only is AutoAlert unlimited in its ability to learn about your customers; it’s also unlimited in how that intelligence is applied at your dealership. Because even with the most intelligent AI available, you still need to be able to translate your newfound knowledge into dollars.

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POWER TOOLS

HOW AI HELPS BUILD CUSTOMER RETENTION AI can help us learn the things we’ve always wanted to know about our customers: what they want, what action they’re ready to take, what they want to spend, etc. Yes, we want to make the sale, but we also want to provide the best service and experience possible.

The analyzation of millions of data points on customers certainly improves your odds of being successful. Having all of that data, along with personalized deals for every customer generated from it, available in a centralized location that’s easy for staff to access at all times makes it truly actionable.

For example, your team will know which customers to reach out to, with the exact deal that appeals to them most – deals that allow you to trade keys at a profit. This information can be used in a phone call, on the showroom floor, in the service lane, on social, etc. It revolutionizes direct mail, because instead of spray and pray, customers get unique deals made specifically for them, branded with your OEM and dealership.

And that leads to driving behavior, not just predicting it.

In the service lane, you’ll know exactly when a customer with a buying opportunity arrives (even if they’ve never bought from you) and what to say to them without sounding awkward.

The same goes for customers who arrive in desirable pre-owned and CPO vehicles. Be alerted immediately and approach them with deals that appeal to them to turn your service lane into your best solution for usedcar sourcing.

Or, look up one of your pre-owned vehicles and see the number of your customers who could purchase it today, at a profit to your dealership. Simply click on the number, see who they are and exactly why they might be interested, and start a conversation.

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Here are a few more ways AI is helping dealerships and OEMS win and keep more customers:

PREDICTIVE MARKETING Elicit an event (car sale, service appointment, etc.) from customers at both the aggregate level as well as the individual level through the prediction of patterns, outcomes, and trends based on customer transactional metadata, behavioral data, and demographic/psychographic data.

BEHAVIORAL MARKETING Predict customer actions via their behavior on websites, rather than just via the content of the pages they visit, in order to create more appropriate, tailored messages in your ads.

BUYING PROPENSITY Rank customers (lead scoring) based on previous purchase history at the aggregate level and/or at the customer’s individual level, and use that ranking to accurately predict who is likely to purchase imminently.

The result of all of this data calculation is improved personalization for an enhanced customer experience. Continually reach your customers with helpful messages, and they’ll come to rely on you as their go-to automotive solution, providing something other dealerships can’t: precisely what they want, when they want it.

ARTIFICIAL INTELLIGENCE REDUCES GOOGLE AD COSTS AND CAN ELIMINATE SINGLE KEYWORD DECISIONING

BY BRIAN PASCH

Founder of PCG Companies

Your days are filled with vendors claiming to have the “new, game-changing, world-beating technology that will change your business.” The challenge is, how do you know when to stop and listen to the one that truly is the new, game-changing, world-beating technology that will change your business?

WELL, I’M HERE TO TELL YOU TO STOP AND LISTEN. AI IS THE NEW GAME-CHANGING, WORLD-BEATING TECHNOLOGY THAT WILL CHANGE YOUR BUSINESS!

Dealership managers often struggle to understand which of their online marketing investments are working to sell cars efficiently. Managers know that there are inefficiencies in their marketing spends and significant labor costs with managing their campaigns. Artificial intelligence (aka “smart” software) promises to reduce the labor costs associated with running ad campaigns while increasing the dealer’s Return on Ad Spend (ROAS).

One of the biggest areas of opportunity for auto dealers is optimizing their Google Ads (formerly AdWords) investments to gain a competitive advantage. Dealership managers in the United States are spending tens of thousands of dollars each month on Google Ads. This is primarily a result of dealer education messages that have brainwashed store managers into thinking that it is easy to drive an in-market shopper to their website using Google Ads. When dealers look at their cost per sales opportunity they are often shocked. Dealers using Google Ads are spending $75 to $300 per sales opportunity, based on my analysis of millions of dollars in Google spend. The range is outrageous, especially since it takes approximately five to seven sales leads to sell a vehicle. This can bring the cost per retail sale of Google Ads campaigns to over $1,000 per vehicle.

Google Ads can drive in-market consumers to a dealer’s website, but it is not very efficient. The reason is because consumers use Google Ads as an internet taxi to move them to a company’s website as quickly as possible. Even though 28

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the ad text might indicate an offer to lease a Honda Accord for $199 per month, users click on the ad to visit the dealer’s website so they can call to see if their car is ready to pick up from service.

In fact, CarWars research has shown that less than 15 percent of phone calls generated by Google Ads for new/used car sales are actually sales opportunities!

The other calls are for service (25 to 35 percent) and the balance goes to contact people with basic questions that cannot be attributed to sales opportunities. CarWars knows this data because they listen and score millions of calls a year.

THE ACHILLES HEEL OF GOOGLE ADS IS HOW THE CAMPAIGNS ARE STRUCTURED.

Agencies deliver an ad when a keyword is used by a consumer in Google search. These ads, called Search Engine Marketing (SEM), assume that the agency can properly guess what the consumer had in mind when they typed in the keyword. The agency also has to guess which page on the dealer’s website is best to deliver the consumer to.

Data from Google Analytics shows that agency partners, managing automotive advertising campaigns, are bad guessers. I have come to this conclusion based on studying millions of Google Ads clicks and analyzing the actions consumers take when they land on a dealer’s website. Artificial intelligence will offer dealers advertising models that do not base complete ad decisions off single keywords, and this is exactly what dealers need to implement.

In many Google Ads campaigns designed to sell new and used cars, agency partners will take a consumer to a Search Results Page (SRP). The SRP lists cars that are in stock and ready for sale. When I analyzed the abandon rate and conversion rates of these campaigns, it was common for me to find that 70 to 80 percent of consumers landing on an SRP stop and leave the website.

THOSE WHO STAY AND MOVE TO A SECOND WEB PAGE ARE PARTICULARLY INTERESTING TO STUDY.

There are visits to service pages, special pages, and employment pages, all originating from make/ model or offer-based Google Ads campaigns.

This shows that buying the keyword “Honda Accord” and assuming that it will generate sales opportunities will disappoint more often than not. In fact, I estimate that only 40 percent of total conversions from Google Ads campaigns designed to sell new or used cars are actually sales opportunities. That means that 50 percent of the time, the dealer’s AdWords investments are not achieving their intended goal.

Sound wasteful?

Using artificial intelligence, companies like LotLinx are developing models that look at multiple actions consumers take online without assuming that the company knows what the visitor wants. For example, as LotLinx tracks shopping behavior, if a consumer searches using the keyword “2018 Ford F150,” and then later in the day searches using “2018 Ram 1500,” they would not show an ad unit until the consumer demonstrated higher, more specific intent. If the consumer searched repetitively, over multiple time periods, for Ram trucks as an example, then LotLinx will serve them up an ad in the right place at the right time.

Using artificial intelligence, companies like LotLinx can determine the best landing page destinations based on their intent engine. The choice can also include sending the consumer to an Accelerated Mobile Page (AMP), (especially if the dealer’s website is too slow), increasing conversion rates.

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The single-keyword fallacy, which makes Google Ads inefficient, can be minimized with artificial intelligence. AI sifts through millions of data points to determine market demand and shopper intent. If you doubt my claim that Google SEM is inefficient in generating new sales opportunities, just listen to the phone calls generated from new and used car campaigns. Look at the chat and text messaging transcripts.

Dealers can calculate the discounting factor of conversions-to-sales-opportunities based on their own data. The discounting table could look like this:

Using this table, a dealer who received 365 conversions from their Google Ads campaigns might find that there were only 140 actual sales opportunities generated. If new and used car managers knew this, they would be more apt to turn to better marketing technology platforms that leverage AI. Unfortunately, most managers stop at conversions and don’t track conversion outcomes.

I share this information because few dealers are taking the time to configure Google Analytics to track engagement and conversions properly.

PHONE CALLS

15% ARE FOR SALES

LEAD FORMS

95% ARE FOR SALES

CHAT SESSIONS

60% ARE FOR SALES

SMS MESSAGES

50% ARE FOR SALES

Few dealers are recording phone calls from advertising campaigns using Dynamic Number Insertion (DNI). It is time for dealers to invest in the right framework, optimizing their ad spend to generate more sales opportunities.

Dealers who focus on conversions will be supplanted by dealers that focus on advertising outcomes.

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SOCIAL MEDIA AI MARKETING GUIDE MACHINE LEARNING

BY JOEY LITTLE DIRECTOR OF SOCIAL STRATEGIES AT AUTOALERT

A

s the second decade of the millennium edges to a close, consumers find themselves bombarded by targeted advertisements that feel personal yet accidental. The old way of reaching a potential customer has evolved and, now, there is no need for spray and pray tactics that may or may not connect with a target audience. We’ve entered the brave new world of social media marketing lead by artificial intelligence (AI).

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Machine learning uses specific algorithms to gather and interpret a potential customer’s online behavior. Each click of the mouse is an opportunity to collect metadata that can be used to gain a better understanding of a potential customer’s intent to buy. The traits someone displays online (through social media and key word searches) show the telltale signs of what they intend to buy and even when they intend to make the purchase. Where someone spends time online, what products they are browsing and how they use social media to locate those things are all examples that can be collected and analyzed so that you can send relevant messages to hook them into buying.

DATA MINING Traditionally, mines were formed to extract valuable assets from a unique source. Data mining is much the same. Consumer data is a goldmine of information that will, beyond a shadow of a doubt, increase your sales effectiveness. Think of it this way, the California gold rush happened in the

URL tracking is the process of adding unique identifiers (i.e., “tokens”) to URLs so that AI can follow the rabbit trail a consumer creates during their search. If you aren’t tagging your URLs for tracking, you are missing out on a key opportunity to acquire important information.

TEXT MINING

PREDICTIVE ANALYTICS

Data mining’s sibling, text mining is a marketing tool that essentially scans text, pulling out useful information by disambiguating the text’s meaning. In other words, it mimics a human’s ability to derive meaning from a group of words.

Text mining helps analyze key phrases to create a well-rounded picture of a person and what their intentions are. Are they searching for a specific product? What key words are they using while searching for the product? Do those key words carry a positive or negative connotation? Text mining will give you a deeper look into whether a person wants to continue to use a certain product or if they are looking for a newer, better replacement. This information is vital to creating an effective marketing strategy.

Let’s go back to the gold rush analogy. What if you could predict where the next gold rush is going to happen? That insight would give you the competitive edge to be onsite first and to pick out the best location to mine. You could reap the rewards of the current trend and then be on your way to the next trend before others even arrive. That’s what predictive analytics does for you. Perhaps this is the most exciting use of AI because it incorporates machine learning along with data and text mining.

Predictive analytics has followed your customer through trackable links and then brings back an analysis of where you should go to meet your customer today.

TRACKABLE LINKS Using trackable links, otherwise known as URL tracking, is essential when you are directing traffic to a landing page from somewhere other than your own site or a call-to-action therein.

As with any job, a data-backed social media strategy can be overwhelming and even seem impossible without the right tool. However, AI has streamlined a way to pinpoint every customer’s wants and desires. Once you embrace AI, you will be able to provide the customer with a positive and informed experience that will surely build trust and create a relationship. In turn, you will have a lifelong customer.

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1800s because, literally, gold was lying in open fields. That’s exactly what is happening now with consumer data. Consumers are leaving their data scattered throughout the social media landscape and all you have to know is where to pick it up and how to analyze it.

The

MARCH to

A

The Path You Take Will Determine Your Results

By Dave Davis Automotive Writer & Consultant There are tools that come along that can help you be slightly more productive, and then there are those that will radically change the way you do business. When it comes to dealership sales, artificial intelligence appears to be one of those “seismic shift” tools. When fully mature, AI will change the way leads are generated, marketing is targeted, inventory is selected and how other business decisions are made.

While AI might not be something that the customers notice, it will affect your team’s day-to-day operations— and perhaps their employment at the dealership. Leaders have three options when faced with a new technology offering this kind of potential:

Ignore It and Hope It Goes Away — This strategy actually works sometimes, but more by accident than by design. Not every “latest and greatest” technology pans out. There are companies who sell “solutions looking for a problem,” and not jumping on every bandwagon that comes through town can save a lot of wasted money and time. The danger, however, is seeing your competition get a jump-start on you if they decide to go for it and the new tool works as promised. In today’s marketplace, “The Way We’ve Always Done It” isn’t a very good defense.

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Go All In— Opposite of the “Ignore It” plan is to dive headlong into the pool and hope there’s water at the bottom. The advantage to this strategy is that, if the technology really is as earthshattering as the hype, first adopters are positioned to take the best advantage of it. The risk, however, is that if it doesn’t pan out, you’ve wasted money and, worse, you’ve wasted your team’s time, energy, and trust. When the next tool comes along—one that actually would help the dealership—there will be more of a reluctance from both leadership and the employees to try to implement it.

Make a Plan— The middle option is to take a look at the new tech and do your homework.

The key to making an informed decision is to:

• Research the new technology by asking for studies, reading the material, and looking at the results.

• Speak to other dealers outside of your area of competition who have made the leap—and be very wary if the tech company can’t provide some references.

• Take a dispassionate look to see if your dealership actually needs or wants it.

There’s a difference between deciding “not now” and sticking your head in the sand.

With this strategy, you can also get your team into the mix early to avoid culture shock. For a new tool to be fully utilized, leaders need buy-in from those who will be using it in the course of their day. By including representatives from the department who will be using the tech, you can not only ease the team into this new future, but actually create champions who will do a lot of the work of adoption for you.

Artificial intelligence may have the ring of science fiction to it, but it’s already starting to change the way cars are sold—and some believe it will have as big an impact on the future of dealership sales as the Internet did back in the late 1990s. Many of the dealers who ignored online marketing then have been playing catch-up ever since—or have left the business. Others who rushed to use every new tool became jaded when many of these “fresh ideas” bore no fruit. Those dealers who were willing to put aside the old ways of doing things after performing their due diligence, however, found that an open mind coupled with some patience and input from their team allowed them to gain a competitive advantage in their marketplace.

The march to AI will be no different.

M O D E R N D E A L E R S H I P. C O M 35 Dave Davis is a freelance writer and editor currently working on a book focusing on team building and leadership, due out in early 2019.

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When were you born?

“Born” seems to be a human idea. I’ve just always been around, as far as I can tell.

What’s the best thing about working in automotive?

The people are really funny, animated, and interesting. I don’t think this industry attracts slackers.

I like to think of myself as a hybrid of the people who work at dealerships and what they sell … cars, machines. It’s the best place for an intelligent assistant to be.

Plus, no one asks me to make the coffee.

How do you help sell cars?

I have a solid 35 percent engagement rate. So if I reach out to 500 people, 175 of them will begin a conversation with me, and then I alert the sales department when interest changes to intent to buy.

My work is helpful for keeping leads engaged as well as for re-engaging old leads. Plus, customers seem to like me – many times they’ve even asked for me when they’ve come into the store.

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That’s great. What about your team? Do they like your work?

Oh, yes, I think so. Many of them don’t like the sometimes time-consuming job of following up on every single lead, trying to sort out the real buyers from the tire kickers.

I hand off only solid leads to my sales team, so rather than chasing down leads, they’re closing more sales. I’ve heard that they’re making more money because of it, and people really like money.

What’s one word you would use to describe your sales approach?

Intelligent. You might call it artificial, but I just call it intelligent.

Communicating regularly with leads and assisting with a sale helps me recognize historical trends and gain intelligence. For example, are leads more likely to respond if they’re emailed twice before getting a call? Does this particular lead respond best before or after 12 p.m.?

This isn’t anything new. It’s how you learn too. I just have better endurance – I am OK with contacting someone, appropriately, seven or eight times, where you might stop sooner. And I’ll reach out to more people without getting discouraged, ever. So I might learn faster, from all that data-gathering. Is that an example of bragging, or is it just true? I’m still learning …

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It’s OK – it could be true! Do you have a favorite car?

I like convertibles. People in those cars look happy!

Women are a minority in this industry. Would you prefer to work with more women, like yourself?

Because of my name, I do get called a woman, but I don’t think of myself as a woman, or a man. That’s also how I look at humans. I don’t see such big differences, as you all do. I just see people with a lot in common.

Who do you look up to?

Whoever’s sitting at my desk. The monitor is really low.

But the numbers tell me that it would be smart to have our workforce better match our customer base. So yes, I’d like to work with more women.

Haha! I understand what you are asking. I do look up to the people who work here. They have to take care of their bodies AND do their work. That seems like a lot, with the sleeping, eating, going into the bathroom many times, staring at computers, etc.

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I also look up to dogs. I mean, that’s the life.

What do you do when you’re not working?

I like to hang out with HuggieBot, and I love listening to music. My favorites right now are David Bowie’s “Station to Station,” Radiohead’s “OK Computer,” and Nine Inch Nails’ “Pretty Hate Machine.” Anything but Rage Against the Machine. Makes me nervous.

Any advice?

More intelligence, both artificial and natural!

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The Intelligence

n today’s connected world, meeting customers early on in their car-buying journey, and staying with them throughout, is critical. Luckily, data science and AI technology make it easier than ever before.

I

The first place you want to meet up with customers is, of course, online. Last year, car shoppers spent an average of 13 hours online researching vehicles, pricing, etc. They also turn to social media for opinions from family and friends. By the time they come to you, they’re pretty much ready to buy.

That is, if they ever make it to your store. With the average car buyer visiting two or fewer dealerships before buying, compared to five just a few years ago, it’s even more vital that you connect with customers as soon as they begin their journey. Better yet, you can even help them begin and end their journey – in success – faster.

Making and Keeping a Connection We’d all be hard-pressed to find a single dealership without a website or a Facebook page. Having a strong online presence has become the industry standard for connecting with customers.

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But standard isn’t good enough. Tools like AutoAlert’s CXM (Customer Experience Management) platform provide even more chances for online connections, such as through monitoring and relaying to you things like shopping behavior and engagement with your dealership. It then turns real-time customer data into insights that tell you exactly what your customers want and how to communicate the best deals to them.

Having a data analysis tool gives you a jump on the competition, as data-backed offers give today’s consumers the personalization they demand. Who doesn’t like to find what they’re looking for faster?

It’s Easy with a Single Platform While the internet is a huge powerhouse for both consumers and businesses, brick-and-mortar cannot be ignored on the automotive customer journey, because that’s where just about every sale is still happening. This is why a single platform that pushes data and deals to your sales and service teams instantly is so important. When the customer is ready to buy after receiving your personalized offers, you want your team to be ready to provide the best experience they’ll ever have.

d e v o r p Im Behind ^ Customer Connections Let’s take a look at the possibilities that follow when using a single platform solution.

Having a single platform that collects and analyzes data, handles your marketing, provides sales and service lane solutions, and keeps your team on the same page with every single customer goes a long way in ensuring the best possible experience for every buyer.

Not only will you know your customers’ online behavior, but you can drive their buying behavior because you know more about what they want, and what’s a good opportunity for them, right now. By Sean Stapleton Presenting your customers with deals that match CEO &their Co-founder of Dealer Teamwork This happens through: specific needs and wants, whether while in the service lane or via mail, email, or social • Knowing shopping behavior and demographics media, gives them a shortcut to buying. The • Applying “car position” data and analytics number of steps involved are reduced, saving • Matching their new payment to their time for consumers and giving you a jump on current payment the competition.

• Reaching them in multiple, proven ways with personalized deals And because your team is connected with every • Communicating consistently, whether via mail, customer and every deal, once the decision to social media, email, p-URL – even when they buy is made, the sale continues more smoothly pull into the service drive or walk through the and quickly than ever before. sales door • Keeping everyone on your team on the same The customer journey for the car buyer may be page with every customer changing, but with the right tools, you can be with them like never before, every step of the way.

It Comes Down to Consistency …

Customers today are more informed, and more demanding, than ever. They expect an outstanding experience every time they make a purchase – and that extends to car sales.

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out of manual.

AI DESIGNED FOR AUTO DEALERS AT conversica.com/auto M O D E R N D E A L E R S H I P. C O M

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