Why Dealerships Should Use a DMS

A dealership management system (DMS) can assist your dealership in a variety of ways, from sales and financing to parts and accessories and more. RV PRO asked several experts for insight into what dealers need to know about DMS and what advantages they offer.

RV PRO: Let’s start with the basics — what is a DMS & why should a dealership use one?

Ben Platt, sales & marketing leader, BiT Dealership Software: A DMS is the glue that keeps all your departments talking to each other. The acronym DMS can refer to dealer management system or dealer management software. It combines all the tools that you need on a day-to-day basis into one platform.

Josie Prosdocimo, director of product management, IDS – Integrated Dealer Systems: A DMS is a comprehensive and holistic software solution designed to manage and automate operations within a dealership, from sales and service to inventory and accounting. A DMS centralizes data, digitizes processes, streamlines workflows and provides tools to enhance operational efficiency.

Chris Dominis, enterprise project manager, Motility Software Solutions: A DMS is a comprehensive software solution designed to streamline and integrate various operational aspects of a dealership, including sales, inventory management, finance, service and customer relationship management (CRM). Dealerships benefit from using a DMS because it centralizes data, improves operational efficiency, enhances customer service and provides valuable insights through analytics.

Jeremy Johnson, senior manager, OEM & business development, Lightspeed: A [DMS] is an all-in-one software platform that unifies every aspect of a dealership’s operations. Acting as the central hub, it seamlessly connects departments like accounting, parts, service, sales, customer relationship management (CRM), inventory, rentals, financing and more into a single, cohesive system. By connecting parts, sales, service and finance across your business, your employees can see every transaction and make the best decisions based on real data.

Besides some of the obvious functions, what can a DMS do or provide that people may not know about?

Platt: Your DMS needs to be in the cloud … your software should be light, flexible and browser based. You should be able to access it from anywhere in the world from a handheld device, and you shouldn’t need the expense and hassles of managing your own server security and backups.

Your DMS should … integrate all the departments of your dealership into one piece of software. … [It] should also be able to easily add estimates to existing work orders. RV repairs are often multifaceted — if the customer asks you to change the oil, what if you find a propane leak in the process? Your DMS should … facilitate sending additional estimates, getting approval for that estimate and then combining [it] with an existing work order. You should be able to easily attach vehicle intake photos with a handheld device and store those in the cloud.

A DMS should also put a high priority on customer communication. Having a text conversation from the estimate or work order that includes media will go a long way to avoid misunderstandings and improve customer satisfaction.

Prosdocimo: While a DMS is known for managing core functions like sales, finance and inventory, it offers several advanced features that may not be immediately apparent:

• Data Analytics: Track and visualize data to provide a 360-degree view of dealership operations. Advanced analytics can identify trends, customer behaviors and operational inefficiencies, leading to faster, more informed decision-making.
• Accounting: A seamless flow of information between your account general ledger and all departments of your dealership, eliminating double data entry and increasing the accuracy of your reporting.
• Customer Relationship Management (CRM): Some DMS platforms offer integrated CRM companion products, allowing dealerships to manage customer interactions, track leads and personalize marketing efforts and customer outreach.
• Automated Reporting: Produce detailed reports for audits and management reviews.
• Service Management: Manage the entire service department, from scheduling appointments to tracking repairs and managing parts inventory through the work order life cycle. It can even suggest upselling opportunities based on service history.

Dominis: Beyond its core functions, a DMS can automate workflows, facilitate regulatory compliance and integrate with external systems, such as manufacturer portals and third-party service providers. It also supports digital marketing efforts, enables predictive analytics for inventory management and provides tools for managing warranties and service contracts efficiently.

Johnson: A standout feature of a DMS is its ability to seamlessly integrate multiple functions. Traditionally, dealerships might have relied on separate software for accounting, inventory management, CRM and other tasks. This fragmented approach can lead to inefficiencies, data silos and a higher risk of errors. With a DMS like Lightspeed, these functions are unified into one cohesive platform. This integration not only saves time and effort but also ensures data consistency and accuracy. For instance, when a sale occurs, the inventory automatically updates, invoices are generated and customer records are revised — without any manual input. Additionally, a DMS can integrate with major OEMs, transforming the 17-digit VIN entry process into a streamlined operation. Lightspeed’s application programming interface communicates in real time, retrieving essential details like year, make, and model.

How can a DMS or CRM help make RECT better for a dealership?

Platt: The first step to improving repair event cycle time (RECT) is accurate reporting since … you can’t manage what you can’t measure. Your DMS should be able to easily report on RECT so that you can identify trends and identify and improve opportunities.

To improve your RECT, your DMS should [show] the status of all open work orders. This will help … identify bottlenecks. … Your DMS should also … suggest parts orders to ensure that you have a minimum level of standard parts on hand so you aren’t waiting for parts.

A DMS that includes embedded texting will also speed up communication with your customer and improve RECT. Being able to [send] pictures [and get] text confirmation of estimate approval, all within your DMS, will improve RECT.

Prosdocimo: A DMS and a service-specific CRM product can [help] improve RECT in several ways:

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  Identify Service Bottlenecks: Two common bottlenecks that impact RECT the most are warranty coverage and out-of-stock parts. A DMS can help you track your averages for both.

• Schedule Efficiently: By integrating service appointments with parts inventory and technician availability, a DMS ensures that repairs are scheduled optimally, reducing downtime.
• Track in Real Time: Service managers can monitor the progress of repairs in real time, identifying bottlenecks and reallocating resources as needed.
• Benchmark Service: Dealerships ought to compare their RECT results with the region’s averages to determine if they are performing above or below dealerships in similar circumstances, climates and markets. By comparing your region’s results with the national average, you can see how your region is trending.
• Enhance Communication: Automated notifications and updates keep customers informed about the status of their repairs, reducing anxiety and improving satisfaction.

Dominis: A DMS and CRM system significantly improve the RECT scores for dealerships. It enhances customer retention through better communication and reporting. The Motility RECT Dashboard allows users to see changes in real time and model data on screen. By basing our information on real-time data, transparency improves across the service and parts departments, fostering better decision-making and accountability.

Johnson: A DMS or CRM can greatly improve a dealership’s RECT by streamlining workflows, enhancing communication and improving data management. By integrating departments, a DMS ensures smooth information flow, reducing delays in parts ordering, scheduling and repairs. Real-time updates keep service advisers and customers informed, while better inventory management ensures parts are readily available. Additionally, data analytics identify bottlenecks and optimize processes, leading to quicker repairs and improved RECT. In short, a DMS or CRM makes the repair process faster, more efficient and more transparent.

How can dealership ownership get buy-in from the service department & other departments for implementing a DMS?

Platt: An effective service department will be eager to implement a DMS when employees see the benefits of efficient processes that come with an integrated DMS, especially one that includes embedded texting. Efficiencies come in many ways, including techs being able to clock in and out of jobs on their phone, improved customer communication and satisfaction through quick text messages, including photos and estimates, and stock order reorder suggestions to ensure you don’t run out of typical parts.

Prosdocimo: Upgrading your system … impacts your entire team. To get buy-in from your team to implement a DMS, dealership ownership should:

• Engage department heads in the selection process, allowing them to provide input on features that would benefit their teams.
• Clearly communicate how the DMS will make their jobs easier, such as reducing paperwork, improving data accuracy and providing tools to increase efficiency.
• Offer comprehensive training to ensure that employees feel confident using the new system. Ongoing support can help ease the transition and address any concerns.

Dominis: To gain buy-in, dealership ownership should emphasize the benefits tailored to each department. For service departments, highlight how a DMS can streamline scheduling, improve automated communication and notifications as well as enhance customer service. Demonstrating the ease of use and training opportunities can alleviate concerns about learning new systems. Involving department heads in the selection process and showcasing successful case studies from similar dealerships can also build confidence and support for implementation.

Johnson: To secure buy-in for a DMS, dealership ownership should:

• Clearly communicate how the DMS will improve efficiency and reduce manual tasks for each department.
• Involve department heads early in the process to tailor the system to their needs and gain their support.
• Offer thorough training and support to ease the transition and ensure everyone is comfortable with the new system.
• Share success stories from other dealerships to build confidence in the DMS.

What reports can a DMS produce & how can those reports help a dealership?

Platt: A modern DMS will have real-time reporting, including custom reports, that can be printed or opened in a spreadsheet. Reports on margins, inventory levels, tech efficiency, RECT, sales history, lead status, etc. If it is something tracked in your DMS, it should be reportable.

Prosdocimo: A DMS and analytics companion product can generate a wide range of reports to help you manage your dealership effectively, including tracking vehicle sales, profit margins and sales team performance. These reports help management understand market trends and identify top performers. [Also, inventory reports help] monitor stock levels, aging inventory and turnover rates. This information is crucial for optimizing inventory management and reducing carrying costs.

[Additional reports include] service reports that analyze RECT, technician productivity and service revenue. These reports can reveal inefficiencies and opportunities for growth in the service department. Financial reports provide a detailed view of the dealership’s financial health, including profit and loss statements, balance sheets and cash flow analysis. These reports empower dealership management to make data-driven decisions, improve operations and boost profitability.

Dominis: A DMS can generate a wide range of reports, including sales performance metrics, inventory turnover, service department efficiency, financial forecasts, customer satisfaction ratings and more. These reports provide actionable insights for dealership management to optimize inventory levels, adjust marketing strategies, improve staff performance, forecast revenue accurately and enhance overall operational efficiency.

Johnson: A DMS like Lightspeed offers a range of reports … [benefitting] a dealership:

• Sales Reports: Track performance and trends to optimize sales strategies.
• Inventory Reports: Monitor stock levels and turnover to manage inventory efficiently.
• Service Reports: Analyze technician productivity and service efficiency to improve operations.
• Financial Reports: Review financial health with detailed statements and profit analyses.
• Customer Reports: Understand customer behavior to enhance marketing and retention.

These reports provide actionable insights, helping dealerships make informed decisions and improve overall performance.

How would a dealership prepare for implementing a DMS? 

Platt: Start by cleaning your data … give it a once-over and remove everything you don’t need. If you’ve got data from an accounting system or older software, make sure that you can export that data into a spreadsheet for easy transfer to your new system. Your new provider should import this information for free.

Prosdocimo: Implementing a DMS requires careful planning:

• Conduct a thorough assessment of your dealership’s needs and processes to determine the features and capabilities required from the DMS.
• Choose a DMS that aligns with your dealership’s size, complexity and specific needs. Consider scalability, ease of use and vendor support.
• Develop a detailed implementation plan that includes data migration, system configuration, employee training and testing phases.
• Keep all stakeholders informed throughout the process and provide comprehensive training to ensure a smooth transition.

Dominis: Preparation for DMS implementation involves several key steps:

• Conducting a thorough needs assessment and selecting a DMS that aligns with the dealership’s specific requirements.
• Ensuring adequate training and support for staff to minimize disruption during the transition.
• Planning data migration from existing systems to the new DMS, ensuring data integrity and completeness.
• Establishing clear implementation timelines, roles and responsibilities across departments.
• Testing the DMS thoroughly before full deployment to identify and address any issues proactively.

Johnson: A dealership should assess current processes and define clear goals for the new system. Assemble a cross-departmental team, clean up data for migration and choose a DMS company with a proven track record that fits the dealership’s needs. Plan the rollout, provide thorough training and communicate clearly with staff to ensure a smooth transition. A well-executed implementation process is critical. Ensure the vendor outlines the implementation process clearly, including key milestones and assigned responsibilities. Check if they can provide a detailed step-by-step checklist and have adequate resources to execute the implementation promptly. Assess the experience level of the implementation team and ensure your data is clean and ready for migration.

Is there anything else our readers should know?

Platt: Pricing transparency should be at the core of a software company’s values. If they don’t list actual prices on their website, how do you know that you’re getting the same pricing as a similar dealer across town? What will the pricing be next time your contract comes up for renewal? If you can negotiate away up-front fees, why are they trying to charge you thousands of dollars up-front in the first place? BiT’s commitment to pricing transparency means no contracts, no up-front fees and no surprises.

Prosdocimo: When considering a DMS, it’s essential to recognize that this system is more than just software; it’s a strategic tool that can transform how your dealership operates. Look for a provider that will work with you as a business growth partner [and] who understands your business and values your input. Whether improving service efficiency, enhancing customer satisfaction or providing valuable insights through reporting, the right DMS can be a game changer for your business.

Focus on choosing the right tool and partner to fit your dealership’s current workflows and future goals. Ensure your dealership is prepared and approaches the implementation process with a clear plan and open communication of expectations.

Dominis: Implementing a DMS is not just about adopting new software; it’s a strategic decision that can transform dealership operations. It requires commitment from dealership leadership, buy-in from staff and ongoing support and optimization to realize its full potential. Choosing the right DMS partner who understands the unique needs of RV dealerships and offers robust support and training is crucial for long-term success and growth.

Johnson: Selecting the right DMS is crucial for enhancing your dealership’s efficiency and profitability. In today’s fast-paced and innovative business landscape, your dealership needs tools that evolve with it. The right DMS will streamline operations, boost productivity and drive your dealership’s success.