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Dealer Management System: Features, Advantages, and Comparison with CRM

Dealer Management System

Consumers are surfing the internet like never before. When it comes to buying or reselling a car, everyone needs more convenience. Before entering a showroom or another place to take a look at a vehicle, buyers would like to have all the information about a car on their technical devices. Thus, each business owner needs a dealer management system that provides full functionality and offers a maximum of information about cars to both buyers and dealers.

The days when car dealers used plenty of tools to run the dealer management process are far behind us. Besides the common dealer management system platform, the dealer can log into five other systems. For instance, one system may be used to submit transactions to creditors, another for CRM, a third one to manage the website, and the fourth one for digital marketing. Some dealers are still using a mix of various DMS solutions to cover all of their needs.

Due to up-to-date technology, DMS Automotive can fulfill its real mission of helping car dealerships manage their entire business from a single place. These new capabilities make all of your data available in real-time from any gadget.

In this article, we explain the management system for car dealerships meaning, discuss the DMS, its features, and benefits, and compare custom and off-the-shelf software.

What is a DMS - Dealer Management System?

Let’s start from the very beginning. Firstly, it’s worth explaining that DMS full form in the automobile industry as a dealer management system. In more detail, the DMS is the central hub of your dealership that brings all functional areas such as sales, accounting, services, and auto dealership inventory control together in one system. The right DMS should provide real-time insight into how your business is performing, improve the efficiency of your day-to-day processes, and turn data into profitable growth.

If you spoke to the managers of most independent or small car dealerships, most would tell you they know what a DMS is. For some, it may even already be in place. And even those who do not currently have one still understand the potential benefits that a DMS can bring to their dealerships.

Dealer management systems enable a dealership to perform all the daily functions faced by their dealership in the areas of sales, financial transactions, service operations, and more; all of these functions must work together.

Dealer management becomes smooth due to DMS in the automotive industry as it combines all the tools business owners need on a single platform. The fact that all the daily operations faced by your dealership are collected in one place will make it easier for you to run your business. Thus, you will no longer need to log in for individual solutions. A dealership system is used to manage inventory, check invoices for points of sale, view the service history, or track leads.

Dealership management technology allows dealers to manage their entire business in one cloud-based dealership app, allowing business owners to easily track all the transactions and see the whole picture more clearly. The integration built into the software allows for simplified and easy-to-use information exchange between all the operational divisions of your dealership working through your software.

Your success depends on all the departments in your dealership. The dealer management technology helps you achieve your goals by implementing an effective, collaborative way for different departments to communicate, interact, and stay on top of transactions occurring in other areas of the dealership. A good DMS will save you money and improve the efficiency of your business operations while also improving the customer experience at your dealership.

How May Businesses Benefit from Using DMS?

As global estimates state, the automotive software market was valued at approximately $18.5 billion in 2019 and is expected to reach approximately $43.5 billion by 2027.

Car dealership management software is simply more efficient at keeping records and managing data than printing and storing paper as we used to in the old days. Back then, information could easily get lost and was often difficult to access. It was also not possible to track certain types of information, such as the activity on your website.

Your dealership can benefit from The DMS automotive software if you want:

A Comprehensive Solution

A DMS offers a clear advantage in the form of a comprehensive program in which everything is interconnected, from the work of the sales department to the preferences of customers who are undergoing repairs. Also, daily controls become much smoother, especially when repetitive tasks are automated. It's incredibly convenient, and it also adds a lot more efficiency, such as helping cross-reference data to identify things like trends, opportunities, and ways to reduce costs.

Better Customer Service

You are not 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. Unfortunately, a Beepi survey found that 52% of customers feel uncomfortable at dealerships. Thus, you must offer a personalized exemplary customer experience to compete and win over customers. A DMS can help you with this 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 collecting lead data beyond basic information before contacting buyers and establishing a connection.

Marketing that Attracts More People

Car dealership software can help you create campaigns, use social media, and track results. With this data, you can better understand which marketing efforts work best and whether your message is getting a response.

Data that Helps You Make Informed Decisions

Business owners and sales managers actively research their markets and have a good understanding of what customers want. Despite this, they may be missing key points that can significantly affect the bottom line. With that in mind, car dealership software automatically generates massive amounts of data and displays it in easy-to-read reports. For example, website analytics software can tell you how many people visit your website and request information. You can even know which buttons they press and for how long they view the pages.

Sales Increasing

All entrepreneurs agree that any resource that increases sales is worth the investment. Better marketing, customer service, communication, and inventory management all have a positive impact on increasing vehicle sales and service requests.

Main DMS’s Features

Systems may have various features. A progressive car DMS software includes integrated dealer websites and other online tools that will allow company owners to use smartphones to manage the processes on the run. But, the core functionality is almost unchangeable. Here is the list of the basic features.

Contact Database

Contact management system introduction provides a convenient database for storing customer information and related documentation, such as appointments and repair history.

Accounting

Robust and sophisticated dealership accounting software helps you closely track all points of your dealership, such as transactions, parts invoices, services, etc. Solutions like Xero Software, QuickBooks Desktop Pro Software, and NetSuite Software are good examples of small car dealership accounting software.

Marketing

It also helps campaign managers implement the right approach to auto retail for current and potential customers. Through this, they can increase clients’ loyalty by deploying a rewards and benefits program that will result in customer returns.

Inventory

With the help of the inventory control function, you can find out what is available in a batch at any time. With a DMS inventory management system, your business can keep track of available parts.

Payments

Software dealerships offer companies assistance with common problems, including accepting payments from clients. Besides, a DMS integrates seamlessly with accounting software and ERP or CRM solutions that store information about customers and the goods or services they have purchased.

Booking

DMS’ booking system is a powerful solution that automates the management of your shared fleet and simplifies car reservations.

Workflow Automation

Standardization of corporate processes is a key goal of workflow automation. It occurs through a collection of to-do lists, calendars, notifications, and templates. For example, when a task is marked as completed, the software can automatically configure the task for the next step in the process. Seamless dealer stock management can be critical to sales that involve multiple car dealership departments.

Sales Automation

With the help of a dealer lead distribution system, you can better understand where your leads are coming from and how they close. This increases your ROI across all channels and allows you to allocate your marketing budget more efficiently.

Rental Management

Car rentals have different sets of parameters and, therefore, more varied documentation than direct sales. That is why some CRMs provide a list of specific features for tracking rentals, such as payments and repairs.

Desking

Auto dealer desking software helps determine the best terms and alternative deal schemes for your clients based on their credit score.

Custom DMS vs. Off-the-shelf DMS

Standard software is usually generic or off-the-shelf. It is mass-produced by dealer management software companies and introduced for a wide range of enterprises and individual consumers. Off-the-shelf software is often recommended for start-up companies. Despite its ease of use, it does not meet unique business needs as some features may simply not be included, which leads us to custom software.

Custom DMS automotive can be concretely tailored to your business requirements, requests, and needs.

In particular, large businesses need software that perfectly matches their companies’ business processes and ever-growing businesses to keep them running and up-to-date.

Now that we know the differences between off-the-shelf and custom software, it is critical to discuss the key differences, advantages, and disadvantages of each program. Being aware of all their options will make it easier for you to select the perfect one.

Off-the-shelf Software

Advantages

  • Reasonably priced and generally less expensive than custom-made or custom-built DMS software automotive.
  • Fast installation and use.
  • Features numerous guides that you can use as a reference, even before purchasing the software. It simplifies getting a fast overview of its suitability for your company.

Disadvantages

  • You may ultimately find that it may not fit your business, especially if you are in the growing stage. You may need and require other things from the software, which could be a problem.
  • To learn more about what your business needs in the future, your standard software may need modification and customization. It is not easy to modify or customize an off-the-shelf software to what you need as it has limited modifiability, simply because it was not designed to do so.
  • Accessibility to a wider audience can lead to potential competitors accessing the information on your business, which can affect your marketing strategy and development.
  • Compatibility issues are more likely to arise because applications can be difficult to integrate with off-the-shelf software.
  • Hidden costs can come from paying for additional features you don't need and spending extra money on extensions and modules, not to mention paying for a license or adding users as your company grows.

Custom software

Advantages

  • Because custom software is created according to your needs, you can rest assured that it is perfect for your business.
  • The wide range of possibilities and options for its modification and customization is almost limitless. You can get what you want and need from this kind of software as it can be easily customized depending on the development of your company.
  • It provides ownership, which means you don't have to pay extra for licensing fees.
  • It offers scalability to meet your current business needs and requirements while anticipating your future needs as a company.

Disadvantages

  • While custom software offers a lot of good things, it will cost you more than stock software because it is more difficult to create and takes more time than simply extracting the finished program.
  • Custom automobile dealership management software can be great, but it can take months to develop.
  • You may be more dependent on a custom solution provider, which can ultimately be inconvenient for both parties.

Summing up, depending on your business’s specific needs, you first need to decide which solution will be the best one for your business and consumers. Standard software can be a useful starting point for solving common problems.

Besides, custom software tailored to your business needs can help keep it running smoothly and stay ahead of the competition.

DMS vs. CRM: Main Features

The first step for any dealership is to understand what software you need to run your business. It is easy to get confused in terms of which systems are needed. Below, we outline two ways to help business owners understand which products will come in handy to their companies. Two types of software are critical to use running a dealership. The first one is a Dealer Management System (DMS) and the second is a Customer Relationship Management (CRM) system. What is the difference? DMS manages inventory and transactions, while CRM manages your clients’ database. Let’s overview their basic features!

Basic Features of DMS and CRM

DMS

CRM

Inventory

Contact base and segmentation

Contact database

Sales automation

Accounting

Tracking interactions

Payments

Marketing automation

Marketing

Workflow automation

Sales automation

Service department management

Rental management

Showroom management

Workflow automation

Rental management

With so much data stored in DMS, it is more likely that a CRM system will become a showroom tool. Much more emphasis is being placed on the "customer journey" while the DMS will pull the required data from the CRM.

The CRM (integrated with the existing DMS) will not only provide dealerships with the best operating system but will also help them take an important step forward in terms of productivity, customer service, and ultimately, profitability.

Benefits of Using a DMS in a Dealership

A good can have a great impact on your business. Your dealership's daily operations and handling will become easier. So, if you have an automotive inventory management system, there is no need to process each transaction separately in different ways nor to manage inventory.

Here are some points to help you learn and better understand how DMS can help:

  • DMS handles dealer inventory management, such as available models, spare parts, etc.
  • DMS helps clients by speeding up the processing of purchase documents, thereby increasing performance many times over.
  • It helps close more deals by efficiently handling dealer and customer meetings.
  • You can quickly assess the position of your business.
  • Constant availability of the dealer via SMS and chat helps retain customers.
  • You can monitor the profitability of your dealership in real-time.
  • If you have offices in multiple locations, you can access them with one click in the DMS.
  • Since most DMS are cloud-based, you can access them whenever you need to.
  • This ensures seamless communication between departments.
  • It integrates smoothly with existing software.

The ideal dealership system eliminates senseless paperwork and improves performance. This helps manage appointments and ensures friendly communication between departments. It is also available to serve clients 24/7.

What's more, a good DMS car dealership helps you achieve your goals by encouraging an efficient and friendly way of interacting and providing proper information about ongoing transactions. Thus, a good DMS will save you funds, which will ultimately benefit your business.

A dealer management system can add many additional functions, which enhances and offers customers unique services. Most importantly, it provides more information and helps dealerships understand the customers’ needs regarding vehicles and other parts.

What's more, recent research shows that customer experience matters while online car sales are growing. Thus, dealers must design their website as client-oriented to gain a considerable advantage over their competitors.

Now, we provide you with exhaustive data about the car dealership management system. If you still have questions, feel free to contact us.

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Written by

Arthur Koryaka

Starting from 2007, Arthur managed to successfully help automotive, insurance and healthcare industries to adopt a CRM system. As an experienced consultant, Artur proved his practical knowledge by passing certifications for the different Salesforce roles. Over the years, Arthur is developing his expertise in the financial industry and helps clients migrate to Finance Sevices Cloud.

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