When BMW of Bayside hired Stella Automotive AI to answer its phones last year, the dealership had already reduced overhead costs by outsourcing its business development center.
But Doug Foss, general manager of the dealership in New York City’s Queens borough, said he wanted to find still more savings from BDC operations. And he wanted to improve customers’ experience in an area in which dealerships often struggle: answering the phone.
That’s not a problem with Stella, Foss said. She works 24 hours a day, seven days a week. She picks up every inbound call, thanks the customer for calling and asks how she can help. She can route calls to specific employees, tell a customer if the dealership is open on Saturday and schedule a service appointment.
Stella is a digital voice assistant, a product that Tampa, Fla.-based Telepathy Labs launched in February. She is among several such tools that have come to market or shifted strategies in the past 12 to 18 months to help dealerships manage their inbound phone calls, improve customers’ experiences and lessen some of the challenges related to hiring and staffing in today’s tight labor market.
“You couldn’t hire enough people to answer the flood of phone calls you’d get on a Monday morning, and that was always a problem,” Foss said.
With Stella, he said, “the math works. It’s a total no-brainer.”
The companies behind Stella and similar tools — including Brooke.ai, from Huntersville, N.C.-based Proactive Dealer Solutions, and Numa, of Oakland, Calif. — say their capabilities draw on artificial intelligence to interact with customers similar to the way humans would, through voice or messaging, and get smarter based on past interactions.
The market for conversational AI, which also includes website chatbots and virtual assistants, globally is poised for rapid growth this decade, with some estimates that it could reach into the tens of billions of dollars within a few years.
Proponents of the technology say the advantages for busy service departments are many — picking up calls after hours or when call volumes are high; improving productivity by taking over routine tasks from employees; offering a convenient and consistent experience to customers, who don’t have to wait on hold and ultimately may not need to talk to a human. For those customers who want to talk to a person, the tools provide paths to do so.
“It seems like because of the number of dealerships and the magnitude of the problem, it was the perfect market fit for our company, and it seems like a perfect demand fit for the market,” said Josselyn Boudett, Telepathy Labs’ CEO. “We found that the industry as a whole is incredibly open-minded regarding AI.”
Boudett told Automotive News that the company’s interest in automotive started while working on the Stella application for heavy-equipment parts. She said she attended the NADA Show in 2020 after one of her employees said the tool could be useful in auto retail, and people appeared more interested in how it could help with phone calls than with parts.
Stella now is live with 17 dealerships, with more than 100 in the onboarding process, according to the company.
Proactive Dealer Solutions launched Brooke last summer after a beta test last year. Brooke can set, cancel and change appointments, answer basic questions about hours of operation and location, and route calls that need a live person.
“Three out of 10 calls aren’t answered, so if you’re concerned about customer experience and you’re not answering the phone, then, obviously, that’s not a good thing,” CEO Lawson Owen said. “Brooke enables us to, one, eliminate that call failure rate [and] enhance or streamline the process for the consumer so they can get in and get out.”
Brooke is used in nearly 250 dealerships today and sets more than 25,000 appointments each month, with about half of those coming after hours or while agents are busy. Brooke soon will expand into upselling recommended maintenance and recall campaigns, with outbound calls related to open recalls and text messaging later this year, the company said.
McKenna Auto Group, which has eight dealerships in California, activated Brooke in September 2021 after the group’s BDC experienced turnover and dropped to two full-time employees. That first month, Brooke set about 400 appointments, though that has stabilized at about 12 appointments per day, or roughly 360 per month, now that the BDC has been staffed up to six full-time employees.
Employees initially were concerned that Brooke would replace humans and thought they had to prioritize incoming calls for fear of missing them, said Alexandra Issacharoff, McKenna’s BDC operations director.
Brooke “allows BDC people to spend more time doing outbound calls,” CFO Greg Stolrow said. “They can do that and not worry about calls not being answered. The phone doesn’t keep ringing behind their back.”
Numa also can serve as a supplement to dealership employees, CEO Tasso Roumeliotis said, adding that “the human should answer first, as long as it’s kind of appropriate to do so.”
Numa was founded in 2017 as a messaging tool serving multiple industries, from restaurants to salons. Yet the company noticed that its most avid users were auto dealership service departments, even though Numa didn’t actively market to them.
So early in 2021, the company pivoted to solely focus on automotive, Roumeliotis said. Numa picks up missed calls and can message customers a link to an appointment scheduling tool or answers to basic questions, such as dealership hours. If a consumer leaves a voicemail, Numa will transcribe it and send the message to an employee.
As of March, Numa was in 100 to 250 dealerships after its relaunch in automotive a year ago, Roumeliotis said, adding that the company had raised $14 million so far from investors that include Google’s Gradient Ventures.
For BMW of Bayside, Stella has helped reduce call times for setting appointments to two and a half minutes on average — a full minute less than when the BDC handled calls, Foss said. Monthly BDC costs also are lower — roughly $3,500 to $4,500 on average, compared with nearly $10,000 before the dealership introduced Stella, he said.
“The customer experience demands that we reinvent ourselves, and realize that we’ll never want to pay the freight in the training and the turnover,” Foss said. “It doesn’t pencil anymore.”