#372 - Can AI Save Your Collections Department?

This is the Independent Dealer Podcast, Education by Dealers for Dealers. Now, here are your hosts, Luke Godwin and Jeff Watson.

Hello, and welcome to the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. Luke, how you doing, man?

I'm good. I'm on vacation.

Yeah, well, that's. I wish I was Robin. Where are you at?

Salt Lake City? Sunny Salt Lake finally Turn it into spring.

Oh, man, that's. That's nice. I love Salt. Wait, Salt Lake. It's so beautiful there.

Yeah. We are still slaving away at our desks, Robin and I, but Luke, he doesn't care anymore. He just. He just doesn't care anymore. But we have got Robin here with Blitzpay, and we're going to go over some of the more interesting things that are happening because we talk about this all the time on the podcast that as our vendors find ways to improve their services and integrate this AI wave that's coming, right? Everyone's like, I don't want to talk to a computer. No, you want to talk to a computer. Trust me. And you want computers talking to your customers. It's going to make it so much easier, faster, simpler. Blitzpay is doing some really cool things along those lines, as well as some other stuff. Right, Robin? So you're going to kind of tell us what's going on, what we're getting into, and what the future looks like.

Got some cool stuff coming up.

Well, it's all AI. AI. You know, Jeff, Chat, GBT is so great. I know we've talked about that before, but I've really embraced it here lately.

It's like your best friend, your counselor.

Saves it saves me so much time on the consulting side. I mean, it is amazing.

You know, as a side note, I was thinking, and I've talked to our. Our producer, if you can call her that, about taking all of our Episodes, dumping them into AI, transcribing them into a Google Doc that can then be searched by AI. We could have an unlimited database of whatever 300 something episodes we've done. The dealers could go in and literally just ask AI. Hey, what. What did. What do dealers do in this situation? What do dealers do in this situation? You could have just an expert AI dealer consultant, and we could replace Luke completely.

That would be wonderful.

And he'd never have to come back from Mexico and actually do any consulting. We'll just put it in a chatbot.

Sounds good.

I'm going to work on that.

I bet Blitzpay could figure it out. They got some really, really smart folks over there.

We do. We've got some, We've got some. We've got some really smart. We've got some good developers and some good product people. But yeah, we're busy right now, Luke.

And let's talk about busy real quick because I want to ask you this question, Robin. You've never shied away from the hard questions. And some of our dealers that are listening are Blitzpay customers. And they have the unfortunate situation of also being IDMs customer. And sometimes that system doesn't play well with other systems. And I get it. Like, I get that when you put hundreds of millions of dollars into building a dms, you want to keep everyone inside your ecosphere. You want them to use your CRM and your booking tool and your payment processor and your collections and your everything because you're capturing more revenue that way. But that's not always, you know, like we have ventured away from our payment processor and said, hey, we don't like the tightly integrated version. We want to go with blitzpay because of all these extra benefits. And we'll talk about those later. But what's the deal with them not playing nicely with other software providers?

So here's the reality. You've got software that was built some time ago, right. And, and I like to think of blitzpay as a sticky partner. They're not cutting edge, they're not bleeding edge. Right. They're a DMS that does what the DMS has done. What Blitzpay has done is thought about ways to be creative when supporting those key platforms. I've heard switching a DMS likened to a bad divorce.

Indeed.

So we're building on top of platforms that don't have today's features and functionality. And we do. We are bleeding edge and cutting edge and we're shifting the paradigm. We are talking about. We think of ourselves as a software provider, right? We're a software provider that supports payments, but the goal is to carry big heavy loads on this train track. We think of the industrial revolution when train tracks went all over the United States and now you're able to efficiently carry big heavy loads. Same thing. The heavy loads that we're carrying are the communications and the ability to self serve to your consumers.

So Jeff has always wanted a software, a DMS package, software package that has everything across the board. And what you're saying is that may not be the best idea because software gets dated and new innovators like Blitzpay come in and help help your software come up to speed. I mean, what's best what's best that a software package that does everything and works, Works kind of good and doesn't innovate all that much or, or what you're describing.

So this is what I'll say about that. With all the dealers that we have boarded and engaged with and have consulted and coached and all the things that were. That we're doing with our dealers, everybody does things just a little bit differently.

Yeah, yeah.

And a lot of dealers have these practices that fit in a box and nobody knows exactly why they do these things, but typically it's the limitation of a software. So I am arranging my business practices to accommodate my software rather than my software matching my business practices. And you see a lot of that. And so are there up and coming platforms that are going to do a lot more than the existing platforms? Yes. Can you get the same opportunity with a partnership in your existing platforms? I think you can. I think you can get that same experience with the practices that you're used to. I, I mean, I, I don't know. We. We'll see. There's a couple that are, there's a couple that are on the verge of, of launching and one that has launched that's coming out. We'll see.

Yeah, Yeah, I think, I don't know.

Well, Luke, you run into. The issue is these legacy dmss start getting lazy, right? And they're not forward thinking. Like if you compare it to say like a Google cloud service or a Facebook, they are. If they're not innovating from inside, they're acquiring from outside. Right. To make that specific feature that they see the public wants now in house. So they go out and they buy Instagram or they go out and buy WhatsApp or they buy some other little product. Now if IDMS really was on their game, they would have saw Blitzpay coming up and they would have made an offer to buy them as a baby and integrate them internally, have a very good API connection and everything works great. And they would start doing that with every aspect from CRM to booking tools to whatever else is inside your DMS. Right? That's not possible because the DMSs are just kind of resting on their laurels and they probably don't have the cash because they're not a sexy growing SaaS business that can just spin off stock to get cash. So you've got little guys.

Good question though. That's buyer build, right? Do we buy, do we buy or do we buy or do we build or do we partner?

Well, you don't build tools, right? That's because sexier companies like Bits Pay hired your talent away from you and you sent everyone over across seas. Well, those guys are just paid to keep the lines.

I don't know what you're talk.

Well, I think, I think the customer service aspect of all these softwares come into to effect too. There's, there's no customer service with IDMs anymore and they chose to do that by moving everything offshore.

Well, again, it's not a bag on them situation, but it's.

Oh, it's not part.

Part of that is again, when the larger, when, when the management or ownership company just sees them as a cash cow to basically milk until it dies, then that's the attitude, right? If you're not, whatever, maybe that's the way.

Yeah.

So with Blitzpay, when you guys come in and you say, hey, we're gonna run payments for people. And then at some point in your business plan or I don't know if this was the original thing, but you're like, well, the collections platform really sucks at these places. Why don't we just give them this software as a service and not just be a payment rail that's just gonna process payments, right? And so you say, great, now we've got this amazing collections platform that is now really what we do. Like processing payments is cool, like anyone can do that. But you guys have got the collections suite.

It's a paradigm shift. So I'll tell you the reason that blitzpay, the reason that I founded blitzpay was my focus on the end consumer. And what we found as we were developing is that there was such a. This is an underserved market. Not just from a consumer perspective, but from a technology perspective. When it comes to our dealers and finance companies, the paradigm shift is from payments which people view in their mind as a sunk cost. And everybody is constantly looking at their basis points rather than fighting over basis points. What I want to do is hand you a software platform. This is how I describe it internally. When we started to build, the goal was to take the concept of Amazon, right? Amazon, you know what to expect and your payments, your payments process is invisible and I can stack whatever good or service on top of it. I'm selling, I've got my car payments, I've got my rent, I've got my whatever, right? But it's, it's a seamless experience for the consumer. What we found was there was a real need to help dealers and finance companies communicate on a better path and make it easier for their consumers to self serve and that really is the difference between blitzpay and a typical payments processor is we're not in a race to the bottom. We're building technology that's going to help you service your customer in a better and a more effective, more efficient, more cost effective way.

I agree with that. My, my collectors spend more time in Blitzpay collecting now than they do in IDMs. You know, it was probably a 180 day change in that process. We've been on for over two years now. But they like that platform better. And it's because y' all do innovate, you'll do that. And I know Jeff. Jeff, have you seen that as well?

Yeah. So my guy, my. Yes, they. Absolutely. It's. It's much easier, better for the customers. We talk about that every single week when we plug our blitz pay advertisement. What I want to know, Robin, is to make this even better for the customers and better for our collectors, integrating the AI portion into this system. Because we all know that it would be better. It would be better. It would make my collectors more efficient. It would make my customers happy because they can get answers any time of the day. They can get the perfect answer every single time. I can't do that. Dealers cannot integrate AI into their software stack. It's not legally physically possible. Right. I wish it was, because I've tried every single way to take a little AI agent and have it just pluck away on the computer, but it won't. You guys have to integrate it on your end. And that's the argument I have with my underwriting CRM system. Right. Like, if I'm going to have a CRM that's going to field, you know, sales inquiries at midnight and get an application 100% approved and ready for delivery by 5am like, it's got to be integrated at the foundational level of that system. And so us as dealers were beholden at you, the vendor, integrating this faster and making it good. Because, I mean, I think there's maybe one or two dealers that have kind of found a workaround or done something on their own. But when am I going to have an AI employee inside of Blitzpay collecting money for me?

So that's a good question. Everybody's talking about, like, AI is the buzzword right now. Right? Before it was crypto and it was. We come up with these buzzwords.

I know, but this one does me good. Crypto just loses me money.

It does if you think about it in the right way. And it does if you like you guys, when we Think about AI. What's the, what's your goal? What is your, what is your goal? From, from an eliminate.

Well, two, two, two fold. The first thing is to eliminate employees. And number two is to the, for the employee or the agent to do exactly what you want to do when you want to do it.

Hey, you know, we talked about being in Las Vegas on April 22 for Buy Her Pay Here United. We also want to make sure you guys know that Steve is going to be there, Steve Levine, and we're going to have a large compliance component to Buy Here Pay Here United this year. So it's going to be awesome.

And it's so important to, like Robin said, you know, she'll say here then credit card payments and collections. There's a lot of compliance that goes into this. Make sure you are doing it right because we do take in a lot of cash and a lot of deposits and we don't want to lose them by doing something stupid. So if you have a question about anything you're doing in the, in the automotive space, you need to call Steve Levine and you need to be at Compliance Unleashed while we're out there in Vegas.

Yep. See there.

So I don't know that it's even to. So I'm going to, I'm going to give you a little bit of a different, of a different answer. What you care about is your customer making a payment, period, Right?

Yes.

In the most, in the most efficient, secure, convenient way possible. Right. So when we're talking about employing AI, what you care about is from a sales perspective, getting that customer through the process and into a qualified deal.

Right.

Where you can sell them a car.

Okay.

From a collections perspective, you care about collecting a payment. Do you care how that's done?

No, not at all.

You care whether the consumer pays in cash or pays with a card or five cards?

I don't care.

You just want the money.

Put the money in the bank.

So when we're thinking about architecting AI solutions, we are thinking about intelligent ways to reach your consumers and allow them to self serve. Whether they're self serving with an AI collector, whether they're, whether we're talking about. What we're, what we're talking about internally is automated intelligence, ways that you can automate processes. Look, you guys have tons and tons and tons of data points that come at you all day, every day from, from the start of a deal, from the time that, that, that a consumer comes in and fills out an application, you're filtering data to try and write deals that are going to perform. Right. Same thing with consumers that are making a payment. When your customers are in making a payment and a card declines, what happens? Do you know the difference between a card that declines because it's non sufficient funds and because somebody's got their card turned off to be able to manage their. To be able to manage their money better?

I have no idea.

I do.

I think it says so in the decline reason. Right.

The decline reason. Right. So you guys are taking these big buckets of declines and you're picking them up and you're dumping them and you're dialing for dollars in your collections. What Blitzpay is doing. And you'll have to wait and find out more by here. Pay here United. The 21st through the. What is it? The 21st through the 24th.

Yeah. See I like. She's incorporating ads for us. We don't even have to sign up right now.

We're going to, we're going to be. We're going to be announcing some of the things that we're doing. But we're thinking about AI and we're thinking about automations in a different way. Not just AI for the sake of saying that you've got AI but AI that's actually going to work for you and, and make your collectors and your collections motions more effective and more efficient. Which means what happier customers. We talk about this internally is shut up and take my money.

Yeah.

Do I want to have a conversation with you as a collector? I'm already having a bad day. No.

No.

Want to be able to pay you if I've got four cards and I don't want to talk to Luke for 30 minutes while you try and figure out how to run my three different cards and waive my convenience fees and whatever. Shut up and take my money and then free up your collectors to actually have human in engagement and interaction with people who need help.

Right.

Give them the time. That's a better consumer experience. That's a better collector experience. That's a better dealer experience.

Yeah, I agree. Friction People don't believe this but friction causes repos all the time. Friction from ability to take payments friction because their, their car isn't running.

Right.

They had a bad service department. You know, encounter the less friction, the less repos in general. You said something a second ago about AI and, and what dealers have been fed in the last two years is that. Oh yeah, you have. We have AI but AI doesn't do anything, doesn't do anything worth a durn. And AI has advanced a lot in two years. And I know Jeff's, Jeff's seen this. How many times have we seen on the expo floor that someone says, watch this. It, this AI is going to sell you a car and it has no idea what it's doing. And, and so how have we advanced far enough for this to really happen, Robin? Because we've been promised this.

Yeah, absolutely. We've got, there's AI in the market that we've seen in a couple of different, in a couple of different instances. Dealers are really excited about AI and we get to the end of a conversation, these really cool chat bots are going to call your customers and we get to the end of a conversation and somebody's willing and able and ready to make a payment and then they have to transfer them to a live agent to make a payment. So what, what have you just introduced? You've just introduced a ton of friction. Right. And what if somebody's not available and what if all the things that come with it, it's got to be together and it's got to be seamless. But the goal of any type of automation, whether it be artificial intelligence or automated intelligence, is to get your consumers to pay, to pay on time and to pay in a way that's convenient for them at a time that they're due. Right. So cool that you've got all these cool features and functionality and you've got somebody to talk to.

Yeah, yeah.

So the phrase that I've heard use that I like and I cling to is just digital employee. Like I want to be able to hire a digital employee. Yeah, it does all those things you talked about that, that collects the payments and gets the money and runs five different cards and has empathy and sympathy and sets up a promise to pay and verifies hardship and, and sends them the link so that they can self pay or credit card pay or do cash. That's what I want. I want a digital employee because then it doesn't matter. I don't care that that customer doesn't want to shut up and pay. That customer wants to talk about their problems for 15 minutes because they're having a hard day and they just want you to understand them and give them some sympathy. And my collector, unfortunately I have one of them, can't do that for every single customer, 15 minutes every single day. But if I have a digital employee, it can do it for eight hours and it can talk to that customer constantly for eight hours and be their best friend if I need it to. So that's, that's What I say is like, I need a digital employee that will be the perfect quote unquote collector. As. As perfect as you can train these things to be. They will say the right things. They will handle the customers complaint. Right. They will work out a payment plan with them. They'll empathize, they'll get a verification of hardship. They'll set up a promise to pay. That's smart for the customer. Right? Because they have all the digital history to say, oh, you said you could pay Friday, but you've never paid Friday. You've always paid Saturday morning. Let's make it Saturday morning. Right?

Twist that just a little bit. I'm going to shift that. You want your AI. You want your AI employee talking to the consumers who just need to pay and want an easy ability to do it. You want your customer.

Why not talk to all of them?

Because there's one that wants to talk to a live person about their problems.

And that they won't know the difference. At some point, they literally will not know the difference.

I. That's scary.

Why?

That's scary. I don't know if I, I just, I don't think we're there yet. And yes, the way that AI is developing, yes. Are we, are we headed in that direction? For sure.

But what AI gonna do?

Give the guy a 90 day promise to pay and all of a sudden you're getting in there and freak out. Why'd you say that to the customer? Oh, there's guardrails. Of course you train them. I think, honestly, I am less scared of training an AI and having them say the right thing than I am. Like sometimes my collectors. Right.

You probably only have to train them once, Jeff, you know, and you only.

Have to train them once. So I think we're doing all this offshoring to these, you know, Mexican collection companies, and we're sending it over to the Philippines to hire these collectors because they're cheaper. Whatever. They work 24 hours a day, never sleep, I guess, but literally, I think. And again, I've not seen it in practice just yet, but that AI is. It is a digital employee that never sleeps. It does everything perfectly. I don't know, maybe.

Hopefully Robin and the team at Blitzpay have, have done this.

Yes. You'll have to wait and see.

We are either. That's for sure. Buy her pay here United. But the point, I'm saying is that, yes, I get it, Robin. There is like level one customer service that AI should be able to handle right now, right? Hey, I need to make a payment okay, Mr. Customer, I see that you would like to make a payment. Here's a link to make your payment. You know, like, I get that there's kind of a level one, which is the baby step of having AI help our customers self help just by pointing them towards the payment portal, which we would do. I'll tell you what, Friday mornings, having my collectors pick up the phone 50 times just to run a credit card drives me freaking bananas.

That's brain damage.

Yeah, I hate that. Like, no, Mr. Customer, don't call me and tell me what card to run. Just log into your portal and run the stupid card. My collector has more important things to do. But next step, right? Why not empathize with my customer for 30 minutes, talk to them about how they mother died and they're struggling and can't make their payment.

Last time. Jeff, we're not. We're not gonna break in anymore today. But you know, Buckeye Dealership Consulting, they're just a. They're a great company. They put. They started Buy Here, Pay Here, United, and Help started, I guess. And that's. If you don't have your reinsurance company. I. I don't think we could say it anymore. If you do have it, which most of you do, you need to be using all the products. Five years ago, if you'd asked me about cpi, I said, I'm not going to do that. And that was a mistake on my part. I can't imagine how many hundreds of thousands of dollars I've left on the sideline because I didn't use CPI.

Yeah, absolutely. All the products. 100% products. 100% of the time. Right, Luke?

That's it. That's what you got.

Building wealth in your reinsurance company is huge. Taking the DAX tax deductions and that deferment, being able to bring that income back into your dealership in other ways that are tax efficient. You know, we all like government efficiency and dealership efficiency. The Department of Dealership Efficiency. Dode.

The Dode podcast.

The Dode. That's a great name for your consulting company, Luke. Doge.

Yeah, I like that. Dode Consulting.

Yeah, Dode Consulting, Department of Dealership Efficiency. Anyways, call the guys at Buckeye. Make sure you're set up and running. If not, you'll be able to chat with them down at Buy your pay here United. Right?

Sure.

Yeah. See you there.

See if. So, Robin, a while back when, when a vendor was trying to. To introduce AI into the. The sales and underwriting process, there was going to be a. A charge per Interaction with that AI representative. Is that, is that out the window now? Does that not exist in the AI world?

It still does.

So that your, that, that the dealer is paying for the AI or that the, or that the consumer can actually make payment at the end of an.

AI, the dealer was going to be charged something like 10 cents a response. Is that, I mean, is that still. Is. Have prices on AI come down? Is that what makes this possible now? Or, or what's, or does it get passed on?

Yes, it's. So it's going to get passed on. When you're, I mean, when you're talking about a digital dealership, there will be a cost that's associated, to be candid, the cost that we're incurring from the AI. There's, there's a real cost that's associated with that, and there's a cost that's associated with, you know, the build and with the minutes and with the production and all the things. So there will be a cost that's associated with that in addition. But again, the thing that we're trying to do here, the thing that we're trying to accomplish is to get your consumer to make a payment. So I'm going to back up just a little bit. You guys take in tons and tons and tons of information. How are you, from a holistic perspective, looking at that information? If I'm a collector and I'm sitting in a seat, I need that data to me to be delivered to me in a way that I can make that consumable and then make it out actionable. And so AI and machine learning is providing ways that we can start to look at the account more holistically when we're collecting. I'm dropping a hint here and give those suggestions back to your collectors in a way that's going to be more useful and you're going to make them more effective.

I actually brought.

Yeah, go ahead.

I brought, actually brought this to, to Jeff a couple months ago, and I said if there was an AI that would sit over the top of your collection list and take out the ones that pay every Friday anyways, late anyway, but they pay every 16th of the month. You just take and take those all the way off of your, your collector's plate. And then it just, it says in the AI goes, hey, collector, these are the, the 10 accounts you need to work today. And you didn't work the heck out of them because that's really what we need. We don't need to worry about anyway.

You're talking about, you're talking about Clippy. Remember Clippy from. From. Was it Microsoft Word or from Word? Perfect.

Remember that?

The little paperclip that sits in the bottom and then just you kind of chimes at your collector and is like, hey, buddy, don't waste your time on this account. They're going to pay anyways on Friday. Or hey, you know, this guy got declined because he locked his car. Just telling to unlock it. Don't ask him to pay. Like, that's what we need. We need like Clippy just hanging out, huh?

It's a good idea.

What do you call it?

I think maybe we. I think maybe we found some of.

This come to buy here, pay here United and see what it's called.

Robin. Robin. Bird. Bird. Birdie.

Yeah.

Birdie. That sits down there and just chirps at your collector and is like, hey, don't bother with this guy. He's already out of the country.

And if it could only. If it only ping the GPS as well at the same time. So you kind of know everything.

Only.

Yeah.

Okay.

And then. And then check their. Their account history. If you had that stripe integration or whatever into their bank where you're like, actually, they've been spending money in Florida this weekend. They're not even in the state. Like, that matches with the gps. All his money was spent on lottery tickets. That means he's probably sleeping in his car. You should just repo it. That'd be awesome.

If only. Guys, again, there's a ton. You guys get a ton of data. A ton of data partnerships between BlitzPay and. And GPS providers like Iteron and Pastime that you can visibly see in a Blitzpay collection. Engagement could be a really powerful tool.

Yeah.

Oh, yeah. Yeah. It'd be huge to say, hey, hey, we're gonna move this guy to the top of the queue. Because guess what? His car did not ping at his work address like it was supposed to. Right.

What about what if? What. What about if you had an AI system that could take the locations? Right? Because GPS technology is going to tell you the most. What is it the most ping locations in the last. Yeah, one's going to be working, one's going to be home. If there was a change. What if Blitzpay could prescriptively ask your collector to ask your consumer if there's been a change in employment or address?

What if these are all great things?

Yeah, that's a really. That's.

And what's so funny. And what's so funny is you can train your collectors to do all these things, and I've done it. I have trained them to make sure they. They look at the GPS if a customer is this, or to ask for the new information when you know that they. They have new information. And guess what? You can train and train and train, and they just don't do it. But AI, we only have to train once and then continue to train, I guess, with the data to make it better and better and better.

All right, that's better for your consumers. Better from a compliance perspective. That's. That's better for consumers. That's better for everybody all the way around.

So I get this on April 20th.

2Nd, 22nd, 22nd through the 24th at season.

No, I mean, when does mine turn on, Robin?

You'll have to find out in April.

Okay, I'll be there. All right, Robin, thank you so much for your time. I appreciate you letting us give you a. Give you a hard time for some of this stuff, but definitely exciting because I know as you guys, as our vendors who are cutting edge, take this stuff on. It just raises the boat for everybody, right? And so if you aren't in one of these, using one of these vendors, your vendor is like, oh, my goodness, like, I got to get on this and figure this out or I'm going to get left behind. So it helps you, but it also, you know, there's people that are trying to help us here. They're not just trying to, like, run legacy software and just milk us forever. They're actually trying to make our jobs better. So I appreciate you guys for that.

Yeah, we love this industry. We have focused our efforts and our energy on Buy Here, Pay here exclusively to date. And, you know, we want to. We want to serve and we want to build, and we want to be good partners, and that stuff matters. We answer our phone. We, you know, we're trying to build solutions, and we are building solutions that are not just good for dealers, but are actually good for their consumers to help keep those cars sold. And, you know, people paying. There's compliance issues. There's. Again, you guys take so much data in that we need to. We need to start creating ways to send that back in a way that's going to be meaningful and effective and efficient. So we appreciate you guys. We love the independent dealer. We learned lots of things by looking to your podcasts.

Thanks, Robin. See you later.

Bye, guys. Thank you for listening. Please leave us a review. We'll catch you in the next episode.