Why Dealerships Need a “Dealership Brain” for AI Success

Artificial intelligence is quickly becoming a defining competitive advantage in automotive retail. On this episode of Inside Automotive, Todd Smith, CEO of QoreAI and author of The Intelligent Dealership, explains why dealers need to rethink how they approach AI adoption and data ownership.

Smith argues that AI should not be treated like traditional software. Instead, dealerships must train AI systems using their internal workflows, operational knowledge, and transactional data to create what he calls a “dealership brain.” He explains how AI can improve efficiency across sales, service, marketing, HR, and used-vehicle operations while helping dealers build long-term operational advantages.

Key discussion points include:

•  Why dealerships misunderstand AI implementation 
•  The importance of building a “dealership brain” 
•  Protecting dealership data from third-party dependency 
•  How consumers are already using AI during the buying process 
•  Practical AI applications across every dealership department 
•  Why AI-driven efficiency compounds over time 
•  The risks of delaying AI adoption in automotive retail 

Smith also discusses why transparency, operational intelligence, and data ownership will become critical differentiators as AI reshapes the customer experience.

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

For more content, visit CBTNews.com and follow us on your favorite podcast platform.

Transcript

Why Dealers Need An AI Framework

SPEAKER_00 0:06

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:11

With so much noise around AI, it can be tough knowing how to actually use it to improve operations at your dealership. Joining us today is Todd Smith, CEO of Core AI, and author of the new book I ha which I happen to have a copy of right here: The Intelligent Dealership: How AI and Data Transform Automotive Retail to break down what AI really means for dealers and how they can start putting it to work. We're going to discuss that with Todd today. So, Todd Smith, thank you so much for joining us on the show.

SPEAKER_01 0:40

Thank you so much for having me.

Jim Fitzpatrick 0:43

Congrats on the book. I'm looking through it when you sent it to me, uh, read some of it. It's a little bit high level for me, so I got a lot of questions, but uh but I do want to dive into this. And for those of you out there, this book is so impressive. If you don't get this book and you're running a dealership and you're asking yourself questions about AI, shame on you because uh it's now available right below the video that you're watching. There's a link to take you right over to get your copy. I happen to have my copy right here, which he was nice enough to sign for me, as you can see there. But the intelligent dealership, how AI and data transform automotive retail, this is a must-get. So get get your copy of it. And uh so thank you so much for coming into the dealership. I mean the dealership, into the studio. I have now I put my dealer hat on there from many years ago, right? Yeah. But uh talk to us. What inspired you to write the book and then what do you want the dealers to leave with once they write it?

SPEAKER_01 1:33

Yeah, look, I I feel like my exploration in AI started probably far before, like 2015. Sure. I was trying to see if Watson was possible to use it. Okay. It really wasn't then. Um, but it was really after first Chat GPT and then computer use came out, which was uh October 2024. At that moment I realized everything was gonna change. Okay. And I realized that we were set up to fail because we were gonna try to buy this very interesting new technology, like we bought SaaS tools. Yeah. And I thought we needed a new framework. So I started writing the book, which was a very painful journey. Yeah. Uh it's very difficult to sit and write every single day. But and as technology is changing, we're having to rewrite sections. I bet. So my inspiration was purely, I wanted to help create the new framework for dealers to be able to look at this tech, to be able to put it inside their dealership and actually get productivity.

Jim Fitzpatrick 2:26

And I understand now it's a number one bestseller with Amazon for automotive, right? Yep.

SPEAKER_01 2:30

I'm gonna be niche, but I'm gonna take my number one in automotive.

Jim Fitzpatrick 2:34

You deserve it. Thank you. You deserve it. That that's that that is awesome. So um the this is much needed right now because there's so much out there in automotive about AI. Uh, this year at NADA, um, everybody was screaming AI. Everybody had an AI component to their offering, right? Um, some more than others, some were you know still playing around with it, trying to fit it into their SaaS uh uh plans and what have you and their and their offering. Um is that is that pretty much where we're at? Is the very early stages of AI right now?

SPEAKER_01 3:05

Look, yes. I I think we're in a a stage, but it's accelerating so fast. Early's gonna become mid to late really fast. Right. And that's the difference between this. This is a very compounding technology, it's not linear. Like you're not making a once-a year update to your SaaS tool. I mean, you're shipping hours of days. And if you look at even the biggest models today, the foundation models, the ChatGPT, Claude, uh, Grok, you know, they were running on an 18-month cycle. You'd get a new model and then it went to seven. Okay. Now it's four. Okay. So it's just accelerating. And I think for many dealers, they look at the business and they're like, ah, I'm just gonna buy AI at at NADA and plug it in. Yeah. And I I think you have to kind of pause and say, really, what are you trying to accomplish with it first?

Jim Fitzpatrick 3:51

Right. Right. I was just gonna ask you, what in your view, what are dealers getting wrong in in this area or overcomplicating when it comes to adopting AI?

AI Is Moving Too Fast To Wait

SPEAKER_01 3:59

I I think it's looking at it like you're buying a SaaS tool instead of looking like you're buying a coworker. Okay. I think that's the number one thing. Yeah. And it's a coworker that's going to struggle, it's a co-worker that's gonna have to figure out things, and you have to help walk it through those journeys. Okay. And I think that's very different. We've never had technology like this. Right. Uh, versus buying a SaaS tool where you, the human, just did the inputs and then you got an output. Right. Very different type of uh tech of what we're dealing with.

Jim Fitzpatrick 4:29

Sure, sure. My wife is addicted to her uh what she calls her assistant, you know, and uh and it's just she has this AI tool doing everything that she can possibly do. And and she said, you know, over time this thing has gotten to know me. I can write emails, I can write text messages, whatever it might be, I can write proposals in my voice, you know, which is just astounding that that we have that kind of technology. It it's right, and it's getting better.

SPEAKER_01 4:55

And I we laugh at our company. We're like AI is the worst it's ever gonna be today. That that's how we look at it. Yeah. Um, just mythos, the new model that Anthropic's going to release soon, but they had to put a brakes on it because it was way too powerful. Sure. Uh, it caused all kinds of zero-day, like uh ultimately hacks in across the systems. So they had to get everyone together. Um so I definitely look at it as a man, we're just gonna see some amazing things this year, too. Yeah. This year that's so cool. Um, it'll be crazy.

Jim Fitzpatrick 5:29

Many of the people that I've spoken to in the industry and many that have got AI uh components to their to their offering, um, will say that, oh, well, this isn't necessarily gonna replace headcount or or or or uh decrease headcount in a dealership or re you know, replace personnel. Um, I if we can speak candidly, I disagree with them wholeheartedly. I think it is going to decrease headcount based on what I've seen so far. Um I know that they're being careful so that people don't say, well, we don't want to fire people, and this is gonna really get people upset. But I mean, come on, if you get 24-hour assistant, uh phone assistant that uh that is taking incoming calls on service, and you've got outgoing calls now being made on recalls and and so many other things, this has to bring down the expenses in a dealership through through the headcount, right?

SPEAKER_01 6:16

I think it's gonna massively bring down expenses. Yes. And I look at it in a multiple way where first I believe the AI right now, it seems many dealers are focusing and everything at AD was outwards, meaning let's let's use it to interact with our customers. To me, that's high risk, right? Because you are risking a very new system that's managing your customers versus turning AI inwards and building a more efficient dealership. So and look, AI will absolutely come for jobs, but first it comes for tasks. Okay. Think about a job. A job is a series of tasks, right? You have 32 tasks that you do that make up your job role. Right. AI is going to start picking apart those tasks first, and then ultimately gets to the point where it will take over pretty much every job, I believe, where we touch a computer is going to be gone.

Jim Fitzpatrick 7:08

Good point. Good point. That's that is amazing. Scary a little bit, but it is amazing. Um what what does becoming an intelligent dealership actually look like?

SPEAKER_01 7:18

I I think it's shifting the mindset that one, you have to build your own dealership brain. Um think about it today. Like all dealerships are a group of personalities, and the personality's controlled. It's not really systems and all the knowledge hasn't been organized. You know, it's loosely held, or let's say the employee binder, or we did work processes two years ago and it's in a binder that's dusty with coffee stains on it. Nobody's thought of through it. Right. Uh, I think today we have to resurface all of that and we have to capture all of how our people work. We have to ultimately define all that and then get all the quality stuff that they do, the tricks, the things they've learned that work really well, and put it all into basically the AI brain that becomes their intelligent dealership.

Jim Fitzpatrick 8:07

That's right. This will affect and impact every single department, every every job within the dealership, right? Every job.

SPEAKER_01 8:14

Yeah. So think about it now. I mean, you're already seeing it bleed across, right, with sales. I I was just out of story, you'll laugh with this. Um I was there and I was watching uh older couple buy a car, and the salesperson, the customer or the old couple asked the salesperson a question about an accessory price. He had no idea. So he had to leave. But in front was the deal sheet. This nice old lady pulled out her phone. Oh boy, took a picture.

Jim Fitzpatrick 8:42

You're watching this in real time.

Treat AI Like A Coworker

SPEAKER_01 8:44

Yes, I'm watching, I'm creeping over. Uh and and she takes the picture and she puts in Chat GPT and she says, Is this a good deal? And her and her husband are like this and are reading it. Wow. And so I went to the desk and I was like, hey Brian. I was like, I just saw this hacking. Right. Uh this is crazy. And he's like, another one? Another one that's what's happening. Right. And then I was like, oh my gosh, this is so crazy that we see it there. We see it in service. Now, you know, people were going online to check a dealership out, and it doesn't look at the sum of your reviews, it's looking at all the combination of your reviews. Like, oh, this dealership takes extra 30 minutes when you bring your car in for service. They're they're uh they're uh over promising and under-delivering. Right, right. You're seeing that, and I'm like, oh my gosh. As I said, it'll touch every spot that touches a computer. Not something to me, like physical atom to atom, not touching. Right. Right? It's not gonna pull tire off, right, right, and change it. It's not gonna take the road drive. No, can't do that. But plug it in, diagnose the car, right? All those things. Optimize the shop to what uh particular vehicle should go to what mechanic, sure, based on how efficient they are, yeah, all that's happening.

Jim Fitzpatrick 9:54

And and when you think about it, also in service, when somebody says, okay, these are all of the things that you need on the RO, that same click, right? Can I get it, can I get a better deal within a mile of this dealership on these different items, whether it be tires or you know, batteries or whatever the case might be, right?

SPEAKER_01 10:10

Yeah, and so look, it's interesting because you look at ChatGPT as the fastest growing tech, uh, went to zero to a hundred million users in two months. Yeah. Wow. So when when you take that and extrapolate it out, people are more and more comfortable. Right. Just like we talked about your wife, my wife too. Yeah. My wife is using it as this personal companion to do everything. Crazy. And I'm like, man, what's gonna happen next?

Jim Fitzpatrick 10:31

That's right, that's right. It's um unbelievable. We're having a we're talking about a meeting that we've got coming up. Um, and uh while while we're talking, I'm talking to my wife about this uh yesterday. We came up with this idea, and we're like, oh, we should probably have a meeting about that and what have you. And she's typing the whole time. I'm like, Are you listening to me? Right, she hits she goes, turns the screen around, she goes, here's the whole meeting. This is the best dates, these are the best hotels, this is the best. It was right, it had everything on there from the menu for breakfast, the menu for lunch. Yeah, it was just it was incredible. That's but think about that.

SPEAKER_01 11:04

That's time saving. Yeah, and I think for dealers, if you look at it, is how can we leverage this technology to save time operationally to be more efficient, right? Financially more efficient. Because I I always link things back. I love Dell, Dell Computers, and Michael Dell, what he built, was amazing, and he went up against these giant companies, compact, IBM, that had billions of dollars. Right. Yet he crushed them because he built a more efficient model. Right. And I think the smartest dealers are going to build the more efficient model. Right. And they're gonna be able to crush their competition, not only local, but at a greater and greater distance, because they're able to operate more efficiently than their competitors.

Jim Fitzpatrick 11:39

So this is a semi-AI obviously it's here to stay, it's only gonna get growing growing. But uh, that's why your book is so important is to educate the dealer community on you got to win in this space. Because if you don't, then you're gonna get passed by uh from so many of your competitors out there that are using it every day, whether it be on lead gen, whether it be on taking care of customers, service, pricing, whatever the case might be. Right. Yeah.

SPEAKER_01 12:03

I I think this is more endgame. Yeah. Uh I I don't think it was like the internet where it's like, oh, I waited, people worked it out, now I'm gonna jump in. Yeah. I think this is far more that you better jump in. You have to go through the same learnings and trainings. You have to train up where AI. Right. So, and I think in the end, we're gonna be kind of left with owners and renters. Dealers who've chosen the ownership path that they're going to own their intelligence, continue to evolve the brain at an exponential scale, and the dealers who rent technology from their downstream providers, and the second they turn those providers off, all the intelligence goes away. Right, right. And I think that will be a very dangerous position to be in in the age of AI.

Jim Fitzpatrick 12:46

Okay. So let's talk about data then and then it's the role that it's going to play in all of this. Uh, how should dealers be thinking about their data?

SPEAKER_01 12:53

As the most valuable asset they own.

Jim Fitzpatrick 12:55

Yeah.

SPEAKER_01 12:55

I know that's kind of interesting because as did a dealer person, we've never been taught like how should we data? It's just exhaust. Yeah, yeah. Right? Yeah. But look at the most valuable companies on our planet. Tesla, right? You'd say, is it a car company? No. Right. It's a data company that plays a car company. Sure. You know, Amazon, is it a products and tchotchki company? Yeah. No. It's a giant data company that just happens to sell these things. Right. So when you look at that landscape, you realize the value in the data. And I think every dealer has to recognize they have incredibly valuable data because there's different values in data. And one of the key ones is transactional data. The point where someone writes a check. Yeah, right, right. That's the most coveted and valuable data on our planet. And dealers have a lot of it. Yeah. Yet they just let it be extracted out of their systems with no management, no control. And this is where I feel dealers have to pull in the reins, have something that they own, control their data, and not let it be just held downstream in other systems.

Jim Fitzpatrick 13:57

Right, right, right. And and you're right, that they're they're very free in opening up that to so many different vendors and so many different parties that you don't know what they're doing with it.

SPEAKER_01 14:06

Well, look, I mean they're gonna put AI on it. Yeah. Guaranteed. Yeah. And then that intelligence will be sold back to you as a product. Wow. And that's not where you want to live in this world. No. That's for sure. Not at all.

Jim Fitzpatrick 14:19

That's for sure. So um what role does AI play across different departments? Uh we talked a little bit about it, but in the marketing of the obviously it's one of the biggest expenses out there that a dealer has. Yeah. Um, how do you see that playing a role?

Building A Dealership Brain With Trust

SPEAKER_01 14:32

I see AI continuing to come for that department specifically in a multitude of ways. Run, right? You have once the data is clean and organized, then it's how do you build more efficiency with your marketing? How do you only touch the people who should be touched? Yeah. Not everybody. We're very good at like, hey, we're gonna market to everyone in our local community. Right. Right? So that everything's conquest to us versus protecting our existing customers with unique messaging. Yeah. And I go back all the way to uh Don Peppers wrote a book way back in maybe it was the 90s. Okay. Uh it was called One-to-One. Okay. And building a true one-to-one connection with our customers. Uh technologically, I don't think it was there in the 90s, but today in the age of AI, we're there. Yeah, we're there. So I I definitely see more one-to-one creation possible because of AI. I think also dealers have now a capability to do more things internally. Yeah. Meaning leveraging AI to write emails, messages, et cetera. In fact, that super funny story. I had a group, um, they went to their ad agency and said, hey, we need to record a commercial, annual commercial for some charity work they do. Right. And that agency said, Well, it's gonna be$100,000 or whatever it was. He's like, like, you know, uh, okay. So he went on, I forget what service he used. Uh he made a completely AI video. Wow. It cost him$3,300 in credits. Wow. And then uh and then he said it was very interesting. He said, I wish the agency would have just charged me$10,000 and used the AI. Yeah, yeah. Like why? And I think this is that hard change for us. Sure. We're having to change our behaviors and habits that have we've had so long. Yep. And that's gonna be the hardest transitional part for us, I think. Yes, yeah.

Jim Fitzpatrick 16:16

And you've got, you know, it in in and I paint you with a broad brush here, but you don't have um the most technologically advanced personnel in a dealership to begin with. Salespeople, technicians, service advisors, you know, back office people, what have you. It's not like we're, and I can say this because I was in the business so long, it's not like we're all Bill Gates. You know what I mean? We're we're we're kind of stumbling through when there's new technologies that come around, as you were mentioning, the internet. Uh, I worked for dealers when the internet, you know, hit the auto industry in the mid-90s, and I'm like, ah, you know, it's a fad. You know, who's gonna buy a car on the internet? You know, get get get out there and grab it up. You know, that that's that's where the rubber meets the road in this business, and it always will be, damn it. You know, and it and and obviously that's not the case. But um, so are we gonna see the same thing happen here where you're gonna get dealers that will stumble for a couple of years to try to figure this out? Salespeople, I mean, you when you think about it, um, for for just for salespeople alone, if they don't know how to utilize it in their everyday lives on the showroom floor or in the BDC, then the the learning curve could really take a lot of time, right?

SPEAKER_01 17:21

The problem is we don't have a lot of time. Yeah, I know. This is the weird part for me. It's like we still we're very linear. We think like this process will just take a long period of transitional time. Yeah. But if you look at what's actually happening, there's a great thing everyone should be tracking. It's called the meter meter.org. M-E-T-R.org. Okay. It's showing the autonomous capability of uh unassisted work, meaning I send an AI agent on a task. So two years ago it was minutes. Now it's like 12 hours of continuous work that it's problem solving and figuring it out. But that's gonna jump to 24, 36, 100, 500 uh man hours inside a human hour. Unbelievable. So we don't have the time. Right. And this is why I think it's smart for dealers to invest today in the learnings and tripping over the things versus waiting. There will be no perfect AI product that you're gonna buy and plug in. This is something that's going to learn and operate like your wife is using it, right? It took her and a while and it keeps learning about you and it learns how you do business. Or for a dealership, it learns your market area. Right. Who are the personas of people coming in and buying from you? Yeah. Based on the personas of your employees. Yeah. And how do you actually operate? Do you have ebbing and flowing days, like hours, all that stuff has to be learned? Right. But you have to put it to work today.

Jim Fitzpatrick 18:48

Yeah, yeah, absolutely. Jump jump in, is what you're saying. Jump in, get to know it. Get into the river.

SPEAKER_01 18:53

Right. Learn to swim. You're looking a hard part of this, Jim, is you're assembling the plane in flight. Yeah. And that's again, not something we're used to. But if you look outside our industry and you look at how this technology is progressing, and as I said, we just don't understand exponential anything. I always in jokes and um workshops I give, I say, okay, I'm gonna take 30 steps. Where am I? And everyone's like, back of the room. I'm like, very good. Yeah, now I'm gonna take 30 exponential steps. Where am I? Right. Nobody gets it right. The real reality is I went to the moon, 238,000 miles away. I came back to Earth, and I'm on my way back. I'm about half a million miles away. Yeah. And only 36 exponential steps, so only six more steps. Right. I'm I'm pulling into Mars, 34 million miles away. And at 50 exponential steps, I'm at the end of our known solar system. Right. I we just don't understand this exponential tech we build. Yeah. It's our brains don't comprehend. That's right. That's right. And to me, this is this change point where we're like, oh, hence why, you know, wrote a book. I was like, we have to start looking at it through a completely different lens.

Jim Fitzpatrick 19:58

That's right. That's right. We uh we listed our home for sale, and um, it was amazing to me. I went on, you know, chat and uh said, Well, give me a uh an overview of the market that's within you know three miles of my home for this price range from X number to X number. You know, where do where do we stand? You know, and then if you can and then it gave me all the breakdown, you brought up all the homes that were for sale on that margin, kind of like Zillow does. Sure. And then I said and it said, Do you want me to drill down a little bit further to tell you what the best values are or where the bargains are in that group? Yes. Okay. It gives me a whole nother listing of all of the in in line to say, okay, here's your top, here's your best seller, here's your most your most competitive one against your home, here's what that house has versus your house, here's what you're gonna want to do, here's your pricing structure. You're a little bit high on this, you're probably gonna want to. I couldn't believe it. It was unbelievable. It was more information than any realtor that I spoke to, including the realtor that listed it, gave me, you know, on the house. You know. In fact, I was giving her the information once I saw it. She's like, wow, that's really interesting. I never even thought about that. That's right. That other house doesn't. So it it it's really just changing the way that we live and look at everything. It outtakes us. Right.

SPEAKER_01 21:08

Hands down. Sure. Like think about something that could run hundreds of thousands of scenarios. Think about inventory for a dealership. Yeah. I I think your real estate's a great example. Think about uh something super practical for a car dealer, like your inventory. Your used car manager goes in and prices, maybe looks at carkur's, looks at a couple tools, sure, looks at MRR, um, pulls a black book, VLOC. And then it right then he puts in his number, right? Yeah. But you imagine the same uh system that now looks at four forty thousand different ways to price it, not three. Right. Right? And it does it within seconds. Right. And it does it cross your inventory and it's looking at what else is in market and how long that's been like all of that. Right. And I was like, this is beyond our scale. Yeah. We can't function like this. But we can now have technology that can. Yeah. And it can help us. And just as your house. Example, which I think is really fascinating. Because the other side is, and it would have been interesting to say, you know, next, okay, write the best marketing plan based on all now you know about my house compared to other ones in the market. Yes, how will I position this house for optimum profitability?

Data Ownership Plus Smarter Marketing

Jim Fitzpatrick 22:17

Yeah, there's no question. I mean, it cat it keeps asking you, obviously, do I need to drill down on this? Do you want me to go further on this? Do you want me to it comes up with questions that I didn't even think of that it that it says I can answer these as well if you want me to keep going? You know, I'm like, yep, keep going, keep going, let's go. Yes, yes, yes. And uh, and of course, on the on the automotive side, that's going to be the case for consumers that say, hey, I'm looking at a Toyota Camry and this is the price that they hit me with. Is that a good price? You know, from from in my market, here's my zip code, you know, it and and how close would the next dealership be with a better price? And what are their features? And in seconds, it's gonna it's gonna give it to them.

SPEAKER_01 22:52

It does already. And that's that part. Like I feel dealers, we're gonna have to retrain ourselves. Right. How do we interact with customers? And look, maybe we made a minor adjustment when the internet came out because now consumers were obviously you know way more informed. I remember I had my Chevy store, it was super fun. Like I remember hopped in a car, I asked the guy, did you shop online? No. And I hopped in the car to appraise the car, and I'm backing out, and as I'm backing out, there's a folder. So I drive around the corner, it is K KBP. He had this guy had priced everything.

Jim Fitzpatrick 23:23

But no, I didn't. Yeah.

SPEAKER_01 23:24

No, but I knew exactly how to put the deal together then, right? So I walk back in and I already had his his number was like I had it.

SPEAKER_00 23:31

Yeah.

SPEAKER_01 23:32

Um, but I look at that as like now with this tech, we need to start really shifting how we're going to approach customers, how we deal with them. Uh transparency and clarity are going to be our drivers. Because that's what's determining what gets shown inside the LLMs today, right? In these, whether you're using Grok or Claude or uh ChatGPT, uh it's all like to me, authenticity, clarity of that JSON file, right? Is that's what it's looking for. So if dealers are trying to uh change things and alter it all the time and play the game, the AI is going to figure that out really quick and then start it will start dismissing them.

Jim Fitzpatrick 24:12

Yeah. Okay.

SPEAKER_01 24:13

That's what I absolutely will believe will happen. Okay. Because it needs trust.

Jim Fitzpatrick 24:16

Yeah, yeah.

SPEAKER_01 24:17

That's what it runs on.

Jim Fitzpatrick 24:18

Right, right, right. Exactly. Um dealers, you know, as when when you talk to any dealer about a new offering, a new product, um, and there's so many out there right now, especially with with uh AI, um, the first thing they say is, well, what's what's the what's the ROI on that? What's the ROI on AI, right? Yeah. Um how do you answer a question like that? I've been asked this question a ton.

SPEAKER_01 24:40

And they're like, how am I gonna make money with it? I I think the first thing before you make money, it's getting something that understands your story deeply.

SPEAKER_00 24:50

Yeah.

SPEAKER_01 24:50

Um the making money comes in a multitude of ways, just like you hire a really good employee, right? It takes a while to get them up to speed. You don't hire an employee and say, day one, that's right, how much money are you making? Right, right. That's just not how we do it. And and as I said, we're applying the wrong formula because that's how we've always applied it to SASTEC. I plug this CRM in, and how much better am I going to be, right? We always equate things to the dollar and return. This is not this technology at all. Right. You're gonna plug it in, you just plug the new human in who's uh begins as an idiot. Yeah, and it doesn't understand your store. So you have to give it the information to train it, the data. All this has to happen. It has to understand your workflows. How do you behave? Sure. What's good or bad? So it needs those guardrails. Yeah. You have to work through that. And it's painstaking work. But I know the outcome of this is now you have not only the best employee, yeah, one who never calls in sick. That's right, right? Never asks for a raise, and it's gonna outwork all your employees. That's right. And that's where, yeah, maybe today we're not gonna add more humans, but we're gonna add digital employees. Yeah. And those digital employees are gonna allow us to scale far beyond our means. Yeah, for sure.

Jim Fitzpatrick 26:04

That's that that's what's so exciting, I think, for dealers. Because and especially, you know, every dealer right now is focused on on uh cutting expenses. Uh, where it's a race to the bottom all over again, like we saw before COVID hit. And uh and dealers are nervous about that. Obviously, we're we're looking at a you know, the average sale price of a car. Affordability is still a big factor. Um, there's some uncertainty out there because of the war and gas prices and interest rates and inflation and all those things still exist. So now the dealer says, okay, well, how how can I run this dealership on less money? You know, because that that's where I'm gonna pick up that spread. Build your AI brake.

SPEAKER_01 26:39

Yeah, that's it. Like what else are you going to do? Yeah, you'll always be constrained to market. You'll always be constrained to gas this month or COVID next month, or something happening in our lives, right? We're always gonna have that. Or a competitor gets a better new car manager and just starts eating you up, or the factory gives that store more, or some used car guy came into the market and is now crushing it over this store, so everything leans this way. We've seen it all. This we see all these constraints, but we have no constraints pulling it inwards. Yeah. How do we build a more, to me, centric organization that is as efficient as possible? AI is built to build efficiency. Yeah. That's what it's designed to do. Right, right. How do I how do I analyze all the potential scenarios and bring you back the best one? Right, right. Where humans can't do that. We're good for one or two. Like, let me search the internet for five minutes and I'm like, okay, I'm worried. Right. And now I'm just gonna make a decision. Right. Versus let me look at every web page ever designed, uh, let me analyze all of the and based on you, this is your right fit. And you'll already see glimpses of it if you've played with ChatGPT or Claudia.

Jim Fitzpatrick 27:48

No, no, it's so much it's so much fun. Right. It really is.

SPEAKER_01 27:50

You see the glimpses of it, but and now imagine it really being applicable to your business. So to me, all the the current tools, they gobbled up 99% of all common knowledge, right? All the knowledge on the internet. But enterprise knowledge is less than 3% consumed. Wow. So this is this is that horizon that, hey, okay, it's a new frontier. Right. We need to get your dealership, all the data, into a brain. Yeah. And that's that needs to be the focus. That's right, that's right.

Jim Fitzpatrick 28:18

And now with you know the FTC coming down on dealers the way they are, with transparency and pricing and everything else, we need every tool that we can get our hands on to ensure in any way that that we are compliant. I see AI being able to play a big role in that as well.

SPEAKER_01 28:34

Absolutely. You start thinking about compliance and well, besides other dealers, you saw the FTC said if other dealers want to turn other dealers to. Unbelievable. Can you believe that?

Jim Fitzpatrick 28:43

I just like we just had a uh uh a show on that the other day.

Workflows, Digital Employees, And Core AI

SPEAKER_01 28:46

I was like so much wants to check, is what I I looked at that. So but I yeah, absolutely look, AI is here to play a role in every aspect of our operation. It's not just, hey, we're gonna use it for marketing expense, or hey, we're gonna use it uh to counteract sales problems. But think about like employees. How do you I built a uh GPT on a plane ride uh because I had this weird argument with my 16-year-old. And as we were talking, I was like, he kind of got over on me and annoyed me as you know, a dad. I'm like, oh so I built an app, but I was like, okay, I don't want to build an app to argue with teenagers. Instead, I was like, you remember in the dealership world we have difficult conversations. Yeah. Like, oh, I have a 35-year auto veteran who's worked for me, sold cars forever. He's 60 years old, he's grumpy, uh, he's salty Northeast personality, right? He's showing up he's showing up late to my Saturday meetings. Okay. And I'm like, okay, so you have to have these difficult conversations. Yeah. Right? So I built this little GPT where it you practice the difficult conversation. It scores you, it tells you if you're compliant, right. And tells you so if you start yelling at it, it goes, you raised your voice. Wow. And but it's so funny. Like, and uh you can't bring aging to it. Yeah, right. But it was it but so I built it and I was like, oh, let me deal with uh people's attendance issues, pay plan discussions, all the key ones. Yes, yeah. And I listen, I did this on a quick plane. Wow, that's amazing. And that's where I it just enlightens me every time to like, oh man, dealers need to roll up your sleeves, yeah, experiment and fail is a good thing. Because you learn. That's where you get your muscle memory, right? Going to the gym. That's right. And I I think for dealers, I was like, don't be afraid of this. Yeah. Like use this as your new secret weapon to empower you and your entire team to really accelerate into the most efficient operation possible.

Jim Fitzpatrick 30:43

That's right. The um it's funny when you were talking about that. How do you talk uh to though that associate, that grumpy old guy? Um, the other thing is in in terms of recruitment and hiring and that uh that interview process, you know, in the auto industry. And and uh it was, oh, do you know Bobby over at the Chevy store? Yeah, I know him. Oh, how's he doing? How you doing? How long you've been in? I mean, you're asking all the wrong questions, you know what I mean? It's it's just like a uh you know, a couple of car guys getting together talking about the business or the market that you're in, you know. And uh and and but if you if you take a picture of you know either the application or the resume to say, based on this, I'm going to interview this person. I I you know I'm a sales manager at this particular dealership. Right. What are the best questions that I should ask this individual to get the best interview? And we we do it here at our company, and bingo, the here here are the questions. Yeah.

SPEAKER_01 31:34

And now think of it magnified where it's like have that engine first really understand CBTV, right? That's right. That it really understands your culture, how you operate, all the people who work here, and then it's applying potential candidates to your whole ecosystem instantly. Yeah, a full alignment. That to me is that's that's here already. That's right. And uh this is where you know I look at that, and again, how do we go faster, more efficiently, and get to happier customers, happier employees, and a larger bottom line. Right, right.

Jim Fitzpatrick 32:08

No, no question. So, Todd, you've been around the auto industry for some time. You've had successful uh exits of other digital, I mean not digital, but technical uh tech companies and such. Tell me about core AI. Tell tell our dealer audience what is core AI, what solutions are you providing?

SPEAKER_01 32:24

Yeah, our our number one thing is we want to help dealers extract all their data from all their disparate systems and organize it in something that the dealer owns. Okay. I I I think the dealer has to own the data in the bottom of the solution. Uh we build an intelligence layer over it, but I think in the end, the dealer has to be the owner. So that's that's the core of core. Okay. Uh we also map workflows. Uh uh. So we have a thing called Blueprint. Blueprint will go through and help you. Uh we had been paid for a couple groups to go in physically and map all the flows. Oh, wow. Very painstaking. Oh, I imagine. Yeah. Um, but I realized, and again, AI came back and I said, I don't want to do that again.

Jim Fitzpatrick 33:03

I don't want to sit for over a month, right?

SPEAKER_01 33:06

But now that I know, I was like, hey, can we teach AI and have the AI become a collaborator? So I, you know, for a tenth of the money, you can now just hop on. And we have already mapped 470 plus workflows across 38 different positions, everything. But you just go, yeah, pick this one and then modify it. Yeah. It even tells you what tech you're using because why we did that is we want to see dependency. How dependent are you on that tech? Yeah. And maybe you're spending a couple grand on a tech that only two people are touching. Oh my gosh, yeah. Right?

Jim Fitzpatrick 33:38

Yeah, we see it all the time.

SPEAKER_01 33:40

This one, uh 74 workflows touch this particular piece of tech. Right. So we did that, and we also did that because I wanted to make sure looking at tasks, which tasks are agentically ready. Okay. Versus still human in a loop, versus still human human. Hence, case in point, when the sales manager hands the F and I guy a file to load up, AI is not gonna do that job. That's right. But we don't know that, and we're never gonna be able to train the AI unless the AI understands all that. Yeah. So workflows to us would become a critical component. So us, we're just data and workflows. That's who core is. Okay. And that's our dream, was just help empower dealers to get to a more efficient world.

Jim Fitzpatrick 34:21

Very good. Very good. Well, um, I know that you're gonna be very successful with that, uh, as you have been with your other companies. And uh so Todd Smith, the author of this incredible book, The Intelligent Dealership, How AI and Data Transform Automotive Retail. If you don't have a copy, as I said, we're gonna make it very easy. As I always tell you, uh link right below the video that you're watching. Get your copy if you like what you hear. And and many of you know Todd already. I mean, who who in the business doesn't know Todd Smith? Oh, please. So thank you for bringing all this knowledge to uh CBT and our viewers. Really appreciate it. It's been great.

SPEAKER_01 34:53

Thank you so much for having me today. Thanks for watching Inside Automotive with Jim Fitzpatrick.