We’ve all watched personalization transform online business models for subscription services such as Netflix and Spotify. And a large proportion of their current booming success is down to the fact that these streaming services are far smarter than their users.
Not only does this mean they know and remember what sort of content their users enjoy, but they also surprise users by introducing them to new, similar content that they might not have been otherwise exposed to.
“Netflix knows me so well that I don’t even have to go past the home screen and I’ll find something I want,” Vikrant Pathak, CEO and Chief Data Scientist of the AI-powered customer engagement platform myautoIQ told Publicize.
Inspired by his favorite streaming platforms, in 2017 Pathak decided to develop a similar personalization service for offline environments, of which he chose to focus on car dealerships. Two and a half years later, his team launched myautoIQ in January 2020.
Purchasing a car
For the average U.S customer, buying a car is probably the second-most expensive purchase they’ll ever make. Deciding which car to buy, therefore, can take an average of three to six months, according to research conducted by Pathak and his team.
Part of this process is spent online, narrowing down choices. A typical car buyer spends 14 hours, and visits 13 different websites before they find the car they want to buy and the dealer they want to buy from, Pathak explained.
However, the final car purchase stage is almost always done in person because, understandably, buyers prefer to see the car in a showroom and sometimes test drive it before they buy.
And it’s this stage, Pathak says, that is not as efficient as it could be. Before myautoIQ’s service came onto the market, most car dealerships would work using a reactive sales model, leaving it up to chance for their dealership to be picked.
A proactive sales model
Using machine learning and data science, myautoIQ, on the other hand, allows car dealerships to be proactive in their sales process. They provide dealerships with a SaaS product, driven by their proprietary algorithms, to help find, acquire, score and engage their customers throughout.
During their first few months of commercial operation, the idea of myautoIQ’s algorithm was generally received very well by its customers — car dealerships — Pathak said.
“There was a certain eagerness to pull the trigger on something new,” he added.
From 2014 until the start of this year, the U.S auto market was healthy, with an average of approximately 17 million new and 40 million used cars sold per year.
However, since the novel coronavirus pandemic arrived in the United States at the end of February this year, analysts are now predicting new car sales to plummet to a low average of between 11.5 and 14 million, hovering just above what they were after the 2008 economic recession.
Adapting to unprecedented circumstances
The current conditions have also taken their toll on myautoIQ within the first two quarters of their first year of commercial operation, with just 20% of their customers actually working during the pandemic.
In New Jersey — where myautoIQ is based — like most states, car dealerships were deemed non-essential businesses, and forced to either stop sales or sell online only. And when dealerships shut down, it impacts myautoIQ.
“When our customers are hit, we are hit,” said Pathak, explaining how his business was immediately forced to cut costs with certain partners.
In the early days of lockdown, the company reached out to their customers to offer to help them continue business virtually. All of this was pro-bono, designed to help car dealerships provide their customers with digital ‘walk rounds’ of cars using zoom or set online sales and delivery appointments.
Targeting customers more efficiently and intelligently
However, as time progresses and lockdown is close to entering its third month, Pathak and his team have decided to see their current lull in activity as an opportunity to work on features they did not have the chance to devote time to before.
Hoping to avoid falling at an early hurdle many startups face, myautoIQ plans to double down on ironing out all the gaps they feel their product can expand upon while they can, removing any of their potential to convert into glitches later down the line.
And when car dealerships are eventually back in business in the U.S, despite not knowing when this will be, Pathak predicts that the market his team will be selling to will be very different from what it was before.
With roughly a third of car dealership staff laid off so far during the pandemic, these businesses will be forced to do more to recover, with less resources, he said.
But rather than this being a disadvantage for myautoIQ, Pathak believes that once car dealerships open up again, a service like his team’s will be even more in demand.
“The pandemic-driven sales drop will increase the need to target customers more efficiently and intelligently,” he said, which means the targeted customer acquisition myautoIQ can offer will be more important than ever for car dealerships.
In turn, myautoIQ hopes to be able to adapt the way they position themselves to customers according to this new reality, showing how its product can add value at a time when it will be needed the most.