All About Implementing a Car Dealer Management System

We live in the Internet of Things (IoT) era. Big data, artificial intelligence and machine learning are a rapidly growing presence. Every industry is being revolutionized, and auto sales are no exception.

Auto manufacturers have developed tools that allow buyers to build a vehicle online. Electric vehicles are becoming commonplace: They’re expected to make up more than half the market within 20 years. And OEMs are using robots to build parts.

Consumer behavior is changing too. Consumers are buying more cars online—and the majority of buyers (54%) said they would love to buy a car from home.

Technological changes are being embraced all around. If your dealership isn’t on board, you’re missing out on the benefits provided by these tools. You also risk falling behind other, more technologically advanced, dealerships.

Back in the day, Excel spreadsheets used to be cutting edge. Now they’re archaic. To keep up with the competition (and the technology), dealerships have to modernize their operations. They have to invest in tools that boost productivity, provide deeper customer insights and make inventory easier to manage and move.

What you need is auto/car dealer software.

What is Car Dealer Software?

Auto dealer software is aimed at increasing productivity by automating numerous back-end and front-end business tasks. It can be used to:

  • Manage inventory of new and used vehicles
  • Track repair and reconditioning costs
  • Create accident and credit reports
  • Track financials, such as invoicing
  • Store auto contracts and warranties

Automotive dealer management systems are used primarily by managers, office personnel and the sales team. The goal is to streamline operations so that less manpower is needed to process more information. Beyond that, car dealership management software can also increase sales, nurture more leads and improve communication between departments and franchise locations.

There’s also specialty car dealer software. For instance, car dealer inventory software can track what’s on the lot, how long it’s been there and how much interest a particular vehicle has had.

Bottom line: car dealer software is a resource that can improve your margins.

As profit margins from new car sales slim down, dealerships have to find ways to run leaner, and to diversify revenue generation—all while providing better service. It’s a huge task, and one that’s made much easier with the right software solution.

Even if you’re a small used car dealer, software can make a world of difference for your business and quickly pay for itself in the form of increased productivity and sales.

What is a Dealership Management System (DMS)?

A dealer management system (DMS) is a suite of software tools for various tasks on a single platform. It’s designed especially for the automotive industry to handle every aspect of dealership operations.

Car dealer management software systems are extremely efficient and convenient since everything is in the same database. The one drawback is that some features may not be as robust as single-purpose auto dealer software.

Why Does a Dealership Need Software or a Dealer Management System?

Modern day dealerships are more complex than they used to be. A few decades ago everything was simpler. Buyers came to the dealership to inquire about a vehicle and maybe give it a test drive. During that visit, the salesperson would collect some basic information on a paper form. They’d maybe follow up with a phone call, but there wasn’t much beyond that.

Now dealerships have websites that generate leads, online sales departments, and a growing selection of warranties to sell. There are also more vehicle features than ever. And customers have more research tools at their fingertips. Rather than a necessity, vehicles are now an expensive commodity: not absolutely necessary in some parts of the country. Because of that, buyers expect exemplary customer service.

Dealerships are expected to handle all of these areas while constantly increasing sales and service requests.

Car dealership management software is simply more efficient for record-keeping and data-management, versus printing and filing paper, like in the old days. Back then, information was easily misplaced and frequently difficult to access. It’s also impossible to track some types of information, such as activity on your website.

Your dealership could benefit from car dealer software if you want to have:

A Single, Comprehensive Solution
A DMS offers the distinct advantage of providing a comprehensive program where everything is connected—from the sales team’s performance to customer preferences, to which vehicles are in the reconditioning phase. Day-to-day management goes a lot smoother, especially when repetitive tasks are automated. This is incredibly convenient; it also adds so many more efficiencies, like helping you cross-reference data to identify things like trends, opportunities and ways to cut expenses.

Better Customer Service
You aren’t just competing with other local dealerships. Today, you are also competing with third-party websites and online car sellers like Carvana, which promise buyers the convenience of online shopping. Regrettably, a Beepi survey found that 52% of buyers feel uncomfortable at dealerships. You have to offer a personalized, exemplary customer service experience in order to both compete and win over buyers.

Car dealer management software helps you do that by tracking more lead data and making it available to your entire team. According to a 9 Clouds study, more dealerships are beginning to understand the power of gathering lead data beyond basic information before reaching out and making a connection.

Marketing That Brings in More Leads
If you’re like half of all dealerships, bringing in more leads is your highest marketing priority, and it’s not easy. Automotive marketing software can help you build campaigns, leverage social media, and track results. With that data, you’ll have a better idea of which marketing efforts work best and whether a message is getting a response.

Data That Helps You Make Informed Decisions
Dealership owners and salespeople actively study their market, and have a good idea of what customers want. Despite that, they could be missing key points that might profoundly effect the bottom line. Car dealership software automatically generates an amazing amount of data and displays it in easy-to-read reports.

For example, website analytics software can tell you how many people are visiting your website and requesting information—it can even tell which buttons they clicked, how long they viewed which pages and where they dropped off before becoming a lead. It’s these types of insights that help dealers make informed decisions, rather than going on instincts alone.

Increased Sales
All dealerships can agree that any resource that helps increase sales is worth the investment. Improved marketing, customer service, communication and inventory management - all contribute to selling more vehicles and boosting service requests.

Is Your Dealership Ready for Auto Dealer Software?

Given the array of features, most auto dealerships can benefit from implementing a DMS in one way or another. But is it worth the time and investment? Is your dealership ready for auto dealer software?

Your dealership may be ready for a software management system if:

  • You’re having difficulty managing numerous dealership locations.
  • You need to improve lead tracking and conversions.
  • You don’t have a management system for managing a customer database.
  • You need better tools for managing inventory.
  • You find it difficult to track parts and keep them stocked.
  • You need a way to create custom forms and personalized documents.
  • You want auto-generated credit reports that are synced with the credit bureaus.

Essential Features of a Dealer Management System

You’re ready to start using a dealer management system, but aren’t sure what features are absolutely essential. It’s a common issue for dealerships that are new to auto management software.

Here’s a quick list of the foundational features:

  • Regulatory compliance
  • Real-time data access
  • Data reporting
  • Financial reporting
  • Lead management and tracking
  • Inventory management
  • Credit checking
  • VIN database records
  • Service request tracking
  • Warranty information tracking
  • Pricing tools
  • Inventory database
  • Employee management

Most free car dealer software subscriptions offer the basics, and they are a good way to get started. However, it may be best to select a free software program that also offers a premium paid subscriptions with more functionality. That way you don’t have to worry about losing data or learning a new system if you find you need additional features.

No matter what car dealer management software you choose, make sure it provides protection to secure your data. Car sales involve a lot of personal and financial information that needs to be protected at all times.

Things to Keep in Mind Before Investing in Car Dealer Software

What is your budget? Figure out how much you can invest up front. The options range from free to thousands of dollars per month. As noted above, you may want to consider software with tiered subscriptions.

Do you want on-site software or cloud-based software? On-site offers optimal security, while storage and accessibility is typically better with cloud-based options.

Do you need to integrate existing programs, email lists, etc.? Some car dealer software programs integrate well, while others are more of a stand-alone solution.

How mobile-friendly do you want the system to be? We live in an increasingly mobile world, so software with corresponding apps for iOS and Android devices can provide additional value and convenience.

How Other Management Systems Compliment Your Dealership Software

Putting a DMS in place is the foundation for leveraging a lot more technology. Below are some software platforms and systems that can complement your DMS.

CRM
If you’re already using customer relationship management (CRM) software you’ve got one of the core components covered. Using a dealer management system doesn’t mean you have to abandon your current CRM if you like it and/or it provides advanced functionality. There are car dealer software programs that can integrate with your CRM.

Sales Apps
The sales team may also be using an app to help them manage leads and track sales. Like a CRM, you’ll want to find software that works with these existing apps if they’re working for the sales team—at least until the team gets used to the new system.

Website Analytics Software
Auto management software may offer website analytics capabilities, but they could be limited. If you’re serious about optimizing your website to generate more high-quality leads, additional website analytics software is recommended. The good news is Google Analytics is free and it can provide a wealth of data that can be used to improve your website.

Online Auction Platforms
Auto auctions are a critical part of inventory management for many dealerships, especially now that companies like ACV Auctions have legitimized online auctions. Adding an online auction platform to your software tools ensures auction sale and purchase information is included in your reporting. ACV Auction condition reports also provide a wealth of details that can be used for your inventory database and to create listings.

If you haven’t tried an online auction platform you can sign up for an ACV Auctions account for free.

Implementing a dealer management system takes time and energy, but once it’s in place you’ll spend less effort on low-level tasks and have advanced tools for closing more sales. From the sales floor to the service center, the entire dealership can benefit when you invest in the right DMS.