Is AI customer service right for dealerships?Machine efficiency can be no match for the human touch.

Artificial Intelligence. Unless you are currently residing under a rock, you’ve heard of it. One of the industries boasting the fastest adoption rates is customer service. No wonder. Modern customers want fast, convenient service. Leveraging AI is a potential win. However, as much as customers want speed and efficiency, AI customer service comes with serious drawbacks. Drawbacks that can seriously undermine a dealership’s retention, reputation and bottom line.

AI Customer Service Adoption Growth

In simple terms, AI customer service focuses on digital machines that can complete tasks that used to require human intelligence. Today’s modern customer is fueling AI’s growth. For example, 2/3 of millennials expect real-time customer service, and 75% of all customers expect a consistent experience, whether in-person, online or over the phone. By automating simple communication tasks, AI can handle basic inquiries, responses, order tracking, and more. Available 24/7, it reduces response times while simultaneously addressing one of the industry’s biggest challenges – employee burnout. Companies regularly experience annual agent turnover rates of up to 45%. This is costly, both in terms of productivity and the bottom line.

Limitations of AI must be considered when determining the right customer service strategy.

The Limitations are Real

Yet there are serious drawbacks to AI customer service. “If it’s your responsibility to manage customer interactions as a BDC Manager or BDC agent in an automotive dealership, it’s critical to fully understand its limitations and how they impact customer sentiment and loyalty”, warns Melissa Szekely SVP, Blueprint BDC Consulting, a division of Dealer-FX. Proponents of AI tout its advantages, but according to digital marketing experts at HubSpot, there’s one thing a majority of research participants stressed: Human touch is irreplaceable. Why? Emotional intelligence.

Empathy is Essential

Over the years, studies by TalentSmart have revealed that emotional intelligence (EQ) is the most influential predictor of performance. The higher the emotional intelligence you possess, the better you can handle pressure, resolve conflict and respond with empathy. Empathy is the crux of strong customer service. Displaying empathy shows customers that their concerns are valid and that you care. An empathetic agent helps cool heated interactions, preventing escalation. Customers are more likely to forgive mistakes when a company shows empathy and is willing to go the extra mile. In turn, these customers are more likely to stay loyal and increase their spending over time.

Programmed. Not Personal.

AI customer service cannot be empathetic in its approach. AI tools can be unpredictable and, in some cases, potentially dangerous. Artifical intelligence systems “learn” through pre-fed data and experience. Machines are programmed for repetitive actions and thus cannot modify responses to unfamiliar scenarios. AI is unable to judge right or wrong. The powerful persuasive nature of Conversational AI can be leveraged to push services customers don’t want… or even need. AI systems rely on algorithms, and if not regularly updated, increase the risk of generating incorrect or misleading information that can seriously impact a company’s reputation and bottom line.

In the end, adoption of AI customer service will come down to a company-by-company analysis of benefits and drawbacks. For her part, Blueprint’s Melissa Szekely leaves dealership decision makers with this important consideration. “As human beings, our interactions are very nuanced, yet we know that customers can really feel when the human touch is missing. And if it’s missing, this leads to more frustration and dramatically increases the chances of losing them forever”.

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