How an auto dealership drives sales with a chatbot
Feldman Automotive Group partnered with Valassis to develop a Facebook ad and chatbot to find qualified nearby leads and encourage in-person visits.
Buyers of between 50 and 60 cars a month interact with a Michigan auto dealership's chatbot-enabled ad on Facebook before visiting a location in person, pointing to the technology's potential to find qualified leads and drive them into brick-and-mortar locations.
Chatbots are artificial-intelligence powered applications designed to mimic conversations with real people with the aim of providing more personalized service, typically on mobile devices. Following a surge of interest last year, the tech has dropped off somewhat in 2017 in the wake of reports that users found the experience lacking. However, the technology continues to improve and still holds potential for marketers who can provide value.
The Feldman-Auto-Group chatbot was developed and implemented by Valassis Digital. Valassis introduces the chatbot to auto enthusiasts within a 25 mile radius of Feldman Auto dealers in their Facebook newsfeeds using the Facebook Audience Network. The ad includes a button that users can click on to launch the native chatbot.
“We used the Facebook customer audience tool to segment down to auto enthusiasts in the geographies where Feldman had dealerships,” said Cali Tran, president of Valassis Digital. “To figure out whether they were in market, we sent newsfeed ads around auto. So when the consumer clicked on the ad unit, it opened up our chatbot for auto.
“That chatbot had the artificial intelligence algorithm to start talking to the consumer as if they were in a chat message experience,” Tran said. “And that pre-program dialog was how Feldman was able to determine which consumers are in market and which are not.”
Those who click through the Feldman Automotive Facebook ads are presented with a chatbot that asks a series of questions aimed at guiding them toward the most appropriate call to action, such as making an appointment with a dealer or filling out a lead form.
“It’s full AI [artificial intelligence] and it adapts to what the customer is saying,” said Al Gillespie, ecommerce director at Feldman Automotive Group. “If we’re not getting the response that we want from the customer it’s going to change its messaging.”
According to Valassis’ Tran, Feldman's chatbot was designed to converse in vocabulary typically used in the automobile sales process.
“It’s an artificial intelligence algorithm that can digest various vocabularies based on different verticals,” he said.
“Our marketing partners all use different words to talk to consumers,” Tran added. “Financial services will talk about credit score. The auto industry will talk about cars and makes and models. What we’ve done with Feldman is we have worked through the presale discussions that consumers typically have in an auto dealer.”
As a result, the Feldman chatbot asks questions such as what model car or truck users are interested in, whether or not they need financing and if so, whether or not they know their credit score. If they don’t know their credit score, the chatbot can pull it from Trans Union on their behalf.
“In the chatbot experience, we walk them down a discussion tree and we walk them to an explicit call to action,” said Tran. “If the consumer shows real interest we can walk them to visiting a dealer.”
A talking billboard
So far, the chatbot has been a home run, he added.
“I’m seeing huge engagement with the chatbot,” Gillespie said. “Consumers want to be in control of as much of the shopping process as possible and the less interaction they can have with a human being the better. It serves the customer better because they get information without having to talk to somebody.”
The Feldman Facebook ads are being served to about 100,000 people each month and are achieving click-through rates of between 4.5% and 5%, Gillespie said.
“It’s like 100,000 people driving past a billboard,” he said. Also, 40 percent of the people buying autos in Feldman’s dealerships have been exposed to Feldman’s Facebook ads, he said.
According to Gillespie, Feldman Auto is seeing 50 to 60 sales per month that can be tied back the chatbot.
“There’s a percentage of those sales we would have gotten anyway, but I would say there’s a percentage of these shoppers we would not have gotten without the ad,” said Gillespie.
Driving foot traffic
Feldman sales reps need not fear artificial intelligence eating into their commissions, though, because the chatbot is not designed to close sales.
“We’re just helping the auto dealer have these prequalifying conversations in a consumer-led, non-intimidating fashion so that when the consumer goes into the dealership, they’re already more comfortable in engaging and talking about a car,” said Tran.
During each interaction, the chatbot also explicitly states it is not a real human so there is no confusion on the consumer’s part as to what he or she is dealing with.
“It takes years and years and years to build consumer trust,” said Tran. “You only need one bad experience to destroy credibility. So everything we do has to be explicit, transparent, above board.”
According to Feldman’s Gillespie, the chatbot is helping prospects shop the way they want to shop.
“People want to do 90 percent of their shopping before setting foot into a dealership,” he said, adding that consumers will visit 1.3 dealerships on average before buying a vehicle.
“That’s because they’re doing all this online before they walk into a store. When they walk through the doors, they want to make a purchase right now,” Gillespie said.