Car dealerships are embracing AI solutions to power-up their sales and service operations. In fact, artificial intelligence adoption is one of the fastest growing trends in the automotive world. Yet some dealerships still remain uncertain about how to adopt AI technology into their processes.
Transitioning to automotive AI solutions requires a learning curve, but it’s not the major overhaul that many dealerships expect. In fact, integrating AI into car dealerships can be both seamless and advantageous. And once it’s been established, an AI system can begin operating as the central tech hub of the dealership, capturing zero-party data, updating records, and unifying the customer experience to provide a personalized, concierge experience.
For auto dealerships, now is the time to start evaluating both the relevance and the ROI of introducing AI to their existing automotive sales software tech stack. Otherwise, they risk losing ground. By identifying their dealership system’s capabilities and limitations, leaders can confidently weigh the financial realities of building out a robust AI Operating System.
An evaluation of traditional dealership technology processes
Mainstream dealership management systems (DMS), customer relationship management (CRM) systems, and inventory management systems serve as centralized clearinghouses for the dealership’s data, each serving their individual purposes.
Team members can retrieve the customer information within each of the systems to promote the sales process, serve and support customers, generate marketing campaigns, and run reports. However, the processes that accompany traditional dealership software often are not conducive to what modern consumers (or dealership employees) need.
For example, about four out of 10 dealership leads arrive during non-business hours from a variety of channels. A traditional dealership system or CRM will collect all those leads from social media, texts, third-party marketplaces, Whatsapp, etc. — but it can’t start a humanlike back-and-forth dialogue with the lead. Instead, the system will send the lead into a sales rep’s queue, or a chatbot that greets the lead, essentially buying time until a rep becomes available.
By the time employees follow up on a lead, there’s a good chance it has already gone cold or moved on to a more responsive dealership. A recent study by Pollfish found that shoppers are eight times more likely to purchase from the dealership that responds the fastest. This lag wastes market dollars and diminishes a dealership’s overall competitive edge.
The fact is, different consumers will use different channels at different times — and all of them want immediate answers, even if it’s the middle of the night. Traditional systems just aren’t built to respond quickly enough, and no dealership in the world has enough human capital to keep up.
Another limitation of traditional systems relates to car buyer nurturing. Some customers who show interest need weeks or months to make decisions. It’s hard for salespeople to stay connected with them. Consequently, those leads may leak out of the pipeline, hurting auto sales ROI.
From a service department perspective, traditional software-related processes can be just as inefficient. Since traditional systems aren’t designed to intelligently and intuitively interpret data, they can’t alert staff members to potential problems like missing information or duplication errors. Again, this leads to processes that aren’t productive or satisfying.
The role of transformative AI-powered dealership solutions
AI-powered automotive sales software removes the major procedural roadblocks and inefficiencies associated with traditional dealership tech.
Automotive AI solutions help customers learn everything they want to know about a vehicle and a dealership before they’re ready to commit to a showroom visit, allowing employees to spend more time building bonds with customers and delivering standout experiences.
Without a doubt, the engagement capabilities of AI software can produce a measurable ROI very quickly. AI software engages leads with customized interactions, moving customers quickly through decision-making pipelines without requiring any human intervention.
For example, AI software solutions can look at the full picture when interacting with customers because they dynamically analyze and use customer data. Rather than scripted forms or generic, mass updates, they can send personalized outreach that’s triggered by a variety of unique factors. These factors include vehicle factory intervals, real-time dealership management system signals, historical customer behavior, customer driving habits.
AI software makes it possible for any dealership to deliver a superior concierge experience, whether in its sales or service departments. According to CDK global statistics, the average dealership hold time is eight minutes; AI software can minimize holds and maximize customer satisfaction.
Why weave AI-driven software into your existing systems and processes?
Just how much of a difference can an auto dealership expect after adding AI capabilities to their mainstream dealership management system? Impel sampled performance metrics from more than 230 dealerships to answer that question with hard data.
After moving to Impel AI, auto dealerships reported a 27% increase in their appointment set rates, resulting in a 26% higher lead conversion to sales. That’s not all: As dealership customers were more effectively, predictably, and personally engaged, they were less likely to go elsewhere. In fact, dealerships using Impel AI see a 24% increase in vehicle repurchase rates and a 33% higher customer winback rate.
AI impacts dealership service departments just as impressively. Among dealerships that adopted AI systems, repair order volumes increased by 95 additional repairs each month and revenue jumped by 22%.
Ultimately, Impel unites the sales process and service journeys, rewarding dealerships by heightening customer lifetime value and increasing car sales.
The extensive cost savings of AI in auto dealerships
Demand for automotive sales and services remains high. But that doesn’t mean business will stay steady without catering to customers’ expectations. Car dealerships that want to maximize their profit margins (and keep their competitive edge) must consider AI products for three major ROI implications.
First, AI produces immediate and visible savings. When dealerships can respond to leads instantly with helpful, humanlike interactions 24/7—and seamlessly schedule appointments directly into their automotive CRM or dealer management system—internet appointment set rates soar. Second, Automotive AI software offers hidden cost savings. When AI takes on administrative tasks, staff members have the bandwidth to wow the dealership’s leads and customers. This translates into higher close rates and CSI scores, which naturally increase customer loyalty and customer referrals.
Finally, a sophisticated Automotive AI Operating System delivers long-term value due to its scalability. As a car dealership expands its operations and revenue grows, its system can grow with it — and so can the dealership’s brand reputation and competitive advantage.
Selection criteria for implementing AI software
Through the implementation of AI software, car dealerships can get more value out of their existing dealer management systems and CRMs. 68 percent of dealerships that embraced AI reported that they had seen positive improvements. That said, selecting an AI automotive solution isn’t a process to take lightly.
Automotive dealers interested in leveraging AI technologies should plan to evaluate their options based on each technology’s specifics. In general, dealerships should look for a product that integrates with the most common automotive systems and apps and provides hands-on training that ties back to target KPIs.
It’s no secret that AI is shaping the future of all businesses, including at car dealerships. Those that move to AI-based solutions will be better positioned to win more deals and earn the lasting loyalty of customers.
Don’t let your dealership operation fall behind. Get a demo of Impel today and discover how your automotive dealership can build stronger customer connections that compound revenue growth.
