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Utilizing Recommendation Engines to Improve the Customer Experience

What is a recommendation engine? The short answer in automotive is it turns the car search process into a matching process.

Dan Jackson is the CEO and founder of Driverbase.

How does a dealership compete with the latest disruptive technologies? How does it drive more traffic to the store? If I were a dealer, I would be thinking about how to differentiate my website and improve the customer’s experience with my site. 

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There’s a concept called intrapreneurship, where a dealership can reinvent itself by creating a new, online experience with its own website that helps it better compete with the many disruptors taking over the industry.

One way to do this is through a recommendation engine, which helps car buyers search inventory based on their unique situations instead of manually filtering and comparing vehicles. 

You may be asking, “What is a recommendation engine?” The short answer in automotive is it turns the car search process into a matching process. It shifts your website’s focus from discounting and price to helping customers find their optimal vehicles.

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The best examples of recommendation engines, which most people already use today, are Netflix and Amazon. In fact, over 35% of Amazon’s revenue is generated by its recommendation engine.

The systems are designed to share the learnings from what users like and help them filter through items — whether they’re products, movies or vehicles — and find their optimal products much faster.

Once a recommendation engine system is designed, users feed it profile data (and vehicle data) to generate a personalized consideration set of vehicles. It’s no surprise that Amazon and Netflix have some of the most powerful recommendation engines, because they have the most user data to help the system continually improve the recommendation quality.

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Currently, the average car search includes over 900 online touchpoints. Why do we make every customer manually filter through, rank and compare all of these vehicles across multiple dealerships and multiple brands? How long does it take to manually search a dealer group with 8,000 vehicles? How do you compare all of those vehicles? How do you compare multiple dealerships’ inventories against each other? Car shoppers are eventually going to expect the dealership’s site to find the right vehicles for them.  

As a consumer, how do I know what’s my optimal vehicle from all of these new products coming to market? With the increase in electric vehicles and the fragmentation of the market — as well as younger generations being less brand-loyal — a recommendation engine is a powerful tool that can provide a better experience on your dealer site. If you don’t provide consumers a better tool to filter all this, they might not be making the best decisions for themselves.

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The most powerful automotive use case for recommendation engines is arming the consumer with this technology. Your dealership’s site can help customers leverage the technology in their car purchase decisions. By listening to your customers, you can create a service that differentiates your online experience with personalized vehicle recommendations that can help your dealership provide a consultative sales process and improve the customer’s experience.

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