AI for car dealers: how proactive dealerships plan to beat rising costs, sale slumps and industry uncertainty using tech through 2024.
Rising costs are placing an unprecedented strain on auto dealers, and traditional dealership models are no longer cutting the mustard. At least that was the general consensus at the recent AADA Convention and Expo in Melbourne.
Deloitte reported staffing costs had reached a staggering 51.4% for dealers around the country, bringing the issue of rising costs firmly into focus.
Meanwhile the Australian Automotive Dealer Association (AADA) estimated that new car dealers spent a staggering $7.3 billion on wages annually.
It comes at a time where sales are becoming harder from a traditional standing point, and consumers are demanding more from their sales journey and buying experience.
So, to succeed in this environment, dealers are required to adapt their approach to sales, optimise in-house processes, and refine their overarching strategies – and to do it all while reducing spending.
By leveraging technology, these shifts are simple, effective and cost efficient.
Here’s our priority list for dealers looking to slash expenses and elevate their opportunities using tech throughout the rest of 2024.
- Tackle soaring staff costs head-on
- Get your inventory management in check
- Make data your new best friend
- Call in more customers with an upleveled CRM
1. Tackle soaring staff costs head-on
With many dealerships handing over more than half of their income in wages, budgets are being tightened across all areas of operation.
“Auto dealerships are currently spending 51.4% on wage costs.” Barton said
Source: Deloitte, AADA, 2024
Contact Harald CFO, Nick O’Halloran said this was an unsustainable figure for any auto dealerships looking toward the future.
“It’s clear that staffing costs this high are eating deep into dealership profitability,” Nick said.
“Short of slowing down business operations, the only real solution here is to implement appropriate technologies that support teams, automate administrative tasks and can actively seek out opportunities on your behalf.
“Imagine how a reduction of wages output of say 5% or 10% would positively impact business. This is entirely possible when utilising the right technology in the right way”
Systems like Ask Harry help reduce wage costs by:
- Automating admin, therefore freeing up salespeople to do more selling.
- Enabling handover of repetitive tasks to AI.
- Enable a 24/7 sales model – your tech continues to generate leads and sales while your team sleeps.
- Create end to end customer experiences (without the additional clocked hours).
2. Get your inventory management in check
The balance of maintaining profitability and meeting customer demand isn’t always an easy one to get right – and mistakes in inventory management can cost dealers big.
AI powered tech can accurately predict demand by analysing market trends, customer preferences, and historical data. This makes over or understocking a thing of the past and elevates your profit potential.
3. Take strong, data-driven action
With predictive analytics powered by AI, auto dealers can make data-driven decisions and identify new and emerging opportunities.
Auto dealers can use predictive analytics to:
- Anticipate market trends.
- Track customer behaviour.
- Accurately foresee sales performance.
- Refine marketing strategies.
- Properly allocate resources.
4. Call in more customers – uplevel your CRM
Today, customers expect a lot more from the buying journey than ever before, this is particularly prevalent in the auto industry.
By tracking customer behaviour and interactions AI-driven CRM systems like Ask Harry allow dealers to anticipate customer needs before they know they need them.
This leads to higher customer retention rates and extended customer lifetime value.
It’s time for auto dealers to take up tech
Traditional car sales involve a lot of spaghetti throwing, simply hoping something sticks. In today’s climate where costs are at an all time high and customers are continuously expecting more from their experience, the only option for auto dealers to get ahead is to adopt appropriate technologies into their operation.
When you choose a robust system that is built to meet the specific demands of the auto industry, the transition isn’t hard.
Systems like Ask Harry work with your existing infrastructure and require very little time to establish and get to work.
By choosing to take up tech, you are positioning your business, not just to survive these times of extreme costs and industry uncertainty, but to thrive well into the future.
Chat to the team at Ask Harry to learn more.
