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How AI is transforming the auto dealership business

Josselyn Boudett, Founder and Chairman of STELLA Automotive AI, sat down with Jason W. Smith, Head of Truist Dealer Commercial Services, to discuss how artificial intelligence (AI) is helping dealerships deliver the best possible customer experience while streamlining their operations.

How did you get involved in AI and in developing the concept for STELLA?

I was into AI so early that we didn't even call it AI. Back in the mid-90s, I worked at Lucent Technologies where our Bell Labs delivered sophisticated data routing capabilities that could re-route and “heal” any issues as data travelled around the world. In the late ‘90s, I worked with a start-up that used peer-to-peer networking and language technology to evaluate patent claims.

Josselyn Boudett, CEO and founder of STELLA Automotive AI, and Jason W. Smith, Head of Truist Dealer Commercial Services.
In the early 2000s, I worked with the first consulting firm in the world out of Cambridge (Massachusetts) that built custom AI simulations using agent-based models (like SIM City at work). We also built search and discovery technology using adaptive genetic algorithms.

Fast forward to 2016 when my interest in systems that deliver intelligence led me to write the business plan for an AI digital voice assistant that could make sense of a company’s data and deliver a language model to talk to its staff and customers. The conversational AI system that we created became the platform for STELLA Automotive AI.

What prompted you to focus on auto retailing?

One of my investor friends invited me to a National Automobile Dealers Association (NADA) show, and I went with a demo of the AI voice assistant on my iPad. I walked around the booths and showed people what was possible. Dealers and vendors were practically chasing me down the aisles asking me to bring a similar product to auto dealerships.

What excited dealers most about what STELLA could do for them?

You talk to the STELLA AI voice assistant, as you can to Siri or Alexa. It interacts with customers over the phone, a key step in the customer’s car-buying journey and a vital element in every part of a dealer’s business. Historically, dealers have had a tough time hiring and retaining staff to handle these calls. STELLA addresses this pain point for them.

Say a customer calls the dealership and has a bad phone experience. Not only does that leave a bad impression in the customer’s mind, but dealers that want satisfied customers also need OEMs to see high customer service scores.

Dealers had hoped that chatbots would be the answer, but they failed to deliver, whereas STELLA provides a world-class customer experience.

What were some of the biggest hurdles you had to overcome to bring AI technology to dealers?

The amount of software a dealership relies on is staggering. While you wouldn’t expect a business with less than 100 employees to run as much software as a Fortune 100 company, it’s not unusual to see dealers using more than 80 different programs. It’s a fractured technology ecosystem that lacks data-sharing capabilities—many of the software applications weren't designed to work together.

AI takes on the task of data integration much differently. AI doesn't really care where the data is held and can use natural language techniques to bridge various applications and assemble the data. We’re one of the first vendors that could cross the boundaries of the tech stack regardless of the software the dealership runs.

A publicly traded dealership organization or a large privately operated dealership group could have an even more complex tech stack to support its numerous stores. AI software isn’t challenged by volume or complexity like traditional systems are. We’re able to distribute and deploy a configurable, secure product that's agnostic to a dealership's specific technology profile and meets the needs of each unique business, all on one SaaS platform. It's radical. It's exciting. And it's a huge advantage of the STELLA AI solution.

What other advantages does AI offer?

AI is a fluid product that offers great flexibility in how it can be configured. Let’s say you have two dealerships, with vastly different service operations. One has a huge service department, and they’re open 24/7. The other is small and limited in the amount of service traffic it can handle at any one time. When a customer calls to have their car serviced, the conversation with these two dealerships will be quite different.

For the large service department, the phone conversation might be, "You don't need to make an appointment. We're open 24/7, and you can come in any time. When do you think you’ll be coming in? Tomorrow? Great. We’ll see you then.” It’s a straightforward dialogue with no specific restrictions.

The small service department might have more limitations that create a need for further interaction based on the type of service the customer needs. “You have 48,000 miles on your car? OK, then let’s get you in for factory maintenance. It looks like you have a recall, too.” Or “You need an oil change? We have Thursday afternoon, or Friday morning. Would either of those times work for you?”

The software and dialog rules driving those conversations can be completely different, but our software-as- a-service AI product is able to serve both of those dealerships. We configure the product to each dealer’s specific business rules and policies.

Are there other areas where STELLA supports dealerships?

As a customer engagement system, STELLA’s job is talking to customers, finding out what they need, and matching their needs to the dealer at hand.

We support just about every area at a dealership. We serve reception, booking, parts, and sales. On the sales side, we can start with an understanding of the exact car the customer has been researching. We book test drives. We check inventory and schedule service appointments. We're currently working on a parts module and expect to be rolling that out early next year. In addition to phone calls, STELLA handles web, chat, and SMS text. All our solutions can be adjusted to fit the individual guidelines and policies of each dealership.

What’s the one area where STELLA has the greatest impact?

Staffing—there’s no question about it. Most dealerships are short-staffed. They have a tough time recruiting staff and finding the time to train them once they do.
—Josselyn Boudett, CEO and founder of STELLA Automotive AI

Anything we can do to help to provide relief from those constant staffing pressures is a win.

Beyond that, STELLA does much of what people don’t want to do anyway. Anything highly repetitive and frequent is what STELLA does best. Employees are happy to be released from those kinds of tasks.

STELLA frees people to work on the activities that create the most value for customers and that can transform the dealer-customer relationship. Staff can spend more time helping customers, whether it’s finding the car they want or having the service experience they need. Staff will also have more time to focus on your business, looking for operational improvements or developing growth strategies to boost your dealership’s financial returns.

What do you mean by “transform the dealer-customer relationship”?

Dealerships tend to operate on a transactional basis with customers. They haven’t been able to connect all the data they have and use it to enhance the customer experience.

Humans can be linear. A salesperson can think, who are you? What car do you have? Is it still under warranty? When was your last service? Are you due for service? Do you have insurance? What’s your credit score? What’s the value of your trade-in? That’s a lot of information to gather and process.

AI is the opposite of linear—it’s simultaneously aware. STELLA's going to remember all the conversations a customer has had and assemble it all in one millisecond. So instead of answering the phone with “Hello, how can I help you?”, STELLA can answer the phone, already having some idea of how it can help the customer.

If you want your dealership to provide an exceptional customer experience, you’ve got to be proactive. From the moment a customer walks in the door, dealers need to know as much as possible about them, including if they've been here before, under what circumstances, what conversations they’ve had, and what they might need. Dealers need that information upfront, right away. They need to provide their staff with insights and recommendations to help them anticipate their customers’ needs. STELLA is about putting more intelligence into a dealership, bringing in actionable data that wasn’t available before.

So, what’s next on the horizon for STELLA in the auto dealership business?

We’re thrilled about our partnership with Microsoft that we announced recently at NADA. As Microsoft’s Copilot for Automotive, STELLA can guide dealers through the performance and management of their business, integrating phone, email, web, and chat with big data, analytics, and intelligence.

We’re eager about where we’re going and what else we could do with STELLA, and the dealers have been excited to join us on this journey. We’ve had a large group of dealers join our advisory group, and those that have bought and are using STELLA are active in providing input for our product roadmap. We feel like these dealer relationships help us keep a finger on the pulse of the market.

Finally, what’s it been like for you building an AI business in the predominantly male tech industry?

I would say it's been a privilege. It’s true, there aren’t many women in technology, especially in deep tech, like AI. People tend to be a little wary of AI and how it works, but this industry has seen, firsthand, what it can do. The auto dealer market has been very welcoming to both me and the STELLA solution. I'm proud to be in this vertical—it feels open and ready for the world's next steps.

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