Exchange overheard at a tire dealership, sometime in the future:
Service advisor: “Open the bay doors, artificial intelligence (AI) program.”
AI program: “Affirmative, advisor. I read you,” as the bay door instantly opens.
You’ve heard a lot about AI and its possible use within businesses – with more speculation, no doubt, to come. While the future is always fun to ponder, let’s take a realistic look at what AI and other technologies could do for your business.
Over the last several decades, a lot of promises have been made about whether technology, in general, can deliver. While many predictions have come to fruition, there’s also a list of broken promises. Remember the promise of a paperless society?
“Say goodbye to your computer printer, ladies and gentlemen. In the future, your customers will demand paperless receipts.”
That one definitely didn’t pan out. And while the promises of “paperless” still abound everywhere, we still get three-foot-long receipts for the stuff we buy. So what’s the future state of technology, up to and including AI, in and around tire dealerships?
By the way, first we have to acknowledge that there are some slow pokes on the technology superhighway who just keep going two mph. These dealerships are great at repairing vehicles, but sometimes forget to do a tire rotation or basic inspection since someone never wrote down what the customer asked for in the discovery phase.
This leads to reduced profitability. Let’s face it: there are still dealerships with a $100 an hour labor rate when the rest of the country is cruising along at $170 an hour. I’m not a mathematician, but I imagine that when the owners of these dealerships are asked, “Why aren’t you operating in the 21st century?” they respond, “Well, that’s expensive.”
Yes, keeping up with the times is expensive. It’s especially expensive for tire dealers who think the labor rate covers only labor costs and not basic business expenses like store image, upkeep and modernization. So put the bubbler down, tie those alignment strings up and take a giant step into today’s market, which is all about efficiency.
For example, drive-over tread depth readers are becoming more standard in forward-thinking shops and should have been standard at least five years ago. Digital vehicle inspections (DVIs) are also standard these days.
A DVI isn’t just about pictures, which, I admit, are a really great, modern version of show-and-tell selling. They allow a dealership to do traditional, “Here’s-you-air filter-and-here's-what-a-clean-one-looks-like" sales pitch. But pictures are a function of DVIs – not a feature.
The main feature is efficiency – in other words, dropping down vehicle time in your shops to as low as possible in order to increase your bay turnover ratio. If your shop is open 10 hours a day and your average ticket is about an hour-and-a-half labor, that vehicle ideally should turn about seven times.
Most shops today are lucky if they turn a bay four times a day. The reason? Downtime, which is otherwise known as idle time. How much time is the vehicle inside your building where nothing is getting done to it?
In a process-driven environment, the vehicle is brought inside, racked and an initial inspection is completed and returned to the advisors for estimating, while the technician is performing any pre-authorized work – usually an oil change or tire replacement. If the technician stands under the car watching the oil drain, that’s idle time. Didn’t turn in the inspection first? Idle time. Left a voicemail and waiting for a customer to return the call? Idle time.
It’s brutal when you really start to add it up. About 50% of the time, a vehicle is inside a shop, something somewhere in the process is slowing down the rate of bay turnover.
Here’s why AI could possibly help. With use of a simple AI program, a more precise time can be calculated on when the vehicle will be ready – not only giving employees a more accurate pick-up time to convey to the customer, but also giving the shop the proper time to find its rhythm.
Another area where AI could help reduce idle time is through pre-estimating. Currently, most shops wait until a technician returns the inspection to begin estimating repairs.
Think of the start of a traffic jam near the bend of a highway. During rush hour, all it takes is one person to tap their brakes unnecessarily and a cascade of red lights appear behind the first offender. Within a minute, the traffic has slowed to a crawl and there is a lot of open highway in front of the jam. The time it takes an estimate to be created is the first tap of the brakes, then the contact with the customer is the next if they don’t answer or don’t read your text right away.
We can’t control the customer’s response time, but with basic AI analyzing ticket life cycles and mini-milestones like the time from when an inspection is finished to the completion of the estimate for certain jobs, a pre-emptive text message could alert a customer to an incoming call to action.
Based on VIN, a preliminary estimate could be generated, as well. Take a 2021 Honda Civic with the proper data like ballpark mileage, VI, and customer history already in place. AI could load a pre-screen of typical items due for service with actual part numbers, available from parts-houses that show inventory. If the vehicle is in for a brake check, this could take the form of a pre-screen list of common brake work at said mileage, based only on total data within your point-of-sale system.
Let’s dream big. Maybe as your technician is inspecting a vehicle, an AI estimator is pre-loading the jobs relevant to the inspection, while highlighting more difficult estimates difficult estimates left to the humans. This could revolutionize the ticket life cycle and potentially cut down estimate idle time.
Further, an AI estimator could force-include add-on services. Common add-on jobs often removed from the customer conversation today are tire alignments, flushes and milestone maintenance — items listed in every vehicle’s owner’s manual.
In addition to placing AI in the driver’s seat for estimating tickets, AI also could be used to enforce price integrity.
With an AI driven estimator, based on VIN and local parts house inventory, AI could use the proper matrix or whatever system your shop uses to price parts and lock in those prices. Multiple vendors stocking the same parts can then competeon price and speed of delivery — the way it should be.
AI-driven estimating could also eliminate the all-too-often owner/manager complaint of service advisors “selling with their own wallets.” Since AI doesn’t have a wallet, advisors will have to comply with pricing guidelines. And there’s no need to show advisors what the cost to the shop is. If an advisor doesn’t have a window to see costs, they will be less sympathetic to customer plights of affordability.
Real-world affordability means price integrity, not discounting. If actual affordability is an issue, maintenance items can be removed and payment plans or credit card options and other financing options/programs can be discussed. But if a customer comes in for brake work and the front brakes need to be replaced and the brake fluid hasn’t been changed in five years, the pads and rotors coming down in price is not an option. A flush can be delayed, temporarily saving the customer from being put in a pinch. But that is the customer’s option — and not left to the whim of the service advisor.
I’m sure in the next few years you’re going to start hearing about some amazing and hard-to-believe solutions AI can bring to your dealership — some of it so unbelievable that it will sound like the paperless society pitch from decades ago. I hope you will temper the desire for science fiction-like results and focus on the potential, real-world impact of AI on your shop’s productivity.
Idle time in between the steps of a ticket is a major area of opportunity for each and every tire dealership in America. If you have a process, maybe even documented, I ask that you look between the steps you have listed.
That’s your opportunity — today. Put pressure on vendors to solve those problems with software, integration and AI.
But AI alone isn’t going to fix everything. It’s not magic. If the person behind your sales counter doesn’t do their job correctly, AI won’t be able to do its job.
