Some people in your dealership might fear artificial intelligence and machine learning tools, but they are already widely in use whether you recognize them or not.
In the last two columns in this space, we took a deep dive into showing how machine learning tools were empowering next generation decision making for the financing teams within dealerships.
We showcased examples of how a credit decisioning platform called Lucy, that was developed by dealers, was being used to get more car deals approved. Lucy is powered by artificial intelligence and pre-qualifies 85 per cent of customers in 16 seconds—regardless of their credit history.
One challenge though, is that many dealership personnel don’t fully understand artificial intelligence and machine learning and this leads to fears and apprehensions about trying out the technology.
In this column, I’d like to take a step back and help demystify and clear up some confusion and bust some myths about concepts like machine learning and artificial intelligence so that dealers can make informed choices about embracing tools that can help fuel productivity and innovation.
Myth: Only large organizations can afford machine learning and artificial intelligence.
It’s true that many big companies use artificial intelligence right now, and have worked on it for many years. But I think people would be really surprised to see how many small companies use AI and machine learning. It’s just the way of the future. Many companies are trying to incorporate AI into their business. It reduces inefficiencies with things that are already being done by human beings. I think everybody’s gonna be doing some kind of AI or machine learning in the future— not just big companies. Mom and Pa shops can, and will use it.
Rather than replace people, a lot of companies use these tools in combination with their people. How can the technology be used to make this person’s job a lot more effective, more accurate and a lot easier to do?
Myth: AI and Machine Learning will replace my people.
That’s a huge misconception. I think there will always be some people that will feel that way. But I think the ones who are up to date with technology will see this as a huge benefit for them.
Rather than replace people, a lot of companies use these tools in combination with their people. How can the technology be used to make this person’s job a lot more effective, more accurate and a lot easier to do? Many systems are not fully autonomous and still need some degree of human interaction. If you have a system that can help you be more effective in your job and does, let’s say 80 per cent of the work for you, why would you not embrace that? So I would just say, don’t be afraid of the future. Don’t be afraid of AI. It’s not meant to replace you. It’s meant to support you and help you be more, more effective in your job.
Myth: Artificial Intelligence and Machine Learning are the same thing.
Artificial Intelligence systems are built to solve complex problems, in some cases by thinking like a human. Machine learning is a subset of that system. Machine learning allows machines to learn from data without being programmed. As data is entered, it starts to learn those algorithms, and gets better, and more accurate in its analysis and predictions as it gets more data to assess.
Myth: No machine can replace the “gut” instinct of my experienced F&I Manager
When it comes to Lucy, our Credit Decisioning Platform for car dealerships, she has the “gut instinct” of hundreds of F&I Managers, who have done this for 20 years! Even your most experienced F&I Manager won’t have seen as many clients as Lucy has. It’s not that it’s a competition, it’s just the volume of data that provides insights into which deals get approved and that’s why Lucy can be a very sharp ally within your dealership. Lucy can work with your experienced—and less experienced finance teams—to help them be more efficient, close more deals and better understand the complex world of credit approvals, particularly in the non-prime market.
Myth: Your AI system will reach the same conclusion as my Finance team so why bother.
When the Founder of DecisioningIT wanted to build this product for his dealerships, he took five of his F&I managers and asked them to work on a credit application file. All five came back with a completely different analysis and recommendation. A system using machine learning can reduce human error because it focuses on actual stats, information, lending criteria, all in real time, and makes decisions based on a massive amount of information in the system.
Myth: If I just keep doing things as I’ve always done, I’ll be fine.
A lot of dealerships might not recognize how much Artificial Intelligence is already baked into their own personal lives and their dealerships too. For example, companies that mine CRM data and trigger alerts to touch base with customers after a certain time or service interval, or make predictions based on their expected mileage and vehicle usage. Or the voice activated assistants streaming their music or powering their search. The reality is that many dealerships are embracing a host of advanced technologies that help them run their businesses, and help provide a better customer experience. Machine learning tools that help make faster, more accurate decisions are just part of that.