Why Conversational AI Beats IVR for Dealerships

For dealerships, every call is a potential sale, service appointment, or customer satisfaction touchpoint. According to a recent McKinsey study, most customers still prefer to call businesses for help. The largest hurdle is often inefficient call handling that leads to missed opportunities, frustrated customers, and overwhelmed staff. Many dealerships have tried addressing the issue with traditional Interactive Voice Response (IVR) systems, but a growing number are embracing a better solution: conversational AI. While both aim to manage calls, conversational AI offers a vastly superior experience and efficiency for dealerships, and STELLA is leading the charge. This blog discusses the differences in approaches and why conversational AI can be a game-changer for automotive dealerships.

What is IVR? 

IVR, or interactive voice response, is a technology that allows a computer to interact with humans through the use of voice and dual-tone multi-frequency (DTMF) tones input via a keypad. It works using touch-tone menus, limited voice recognition, and pre-programmed paths.

Historically, businesses have used IVR systems for call management because they offer basic call routing, can handle simple, repetitive queries like business hours, if programmed, and have a lower perceived initial cost. Over the years, customers have become frustrated with these types of systems because they offer impersonal, rigid menus that often lead to hang-ups. IVR systems also struggle with accents and any deviations from the script, which could leave bilingual speakers even more frustrated and unable to get help. These systems are unable to book appointments effectively. 

Causing even more disappointment, these systems often just delay getting to a human and don't truly resolve issues. The resulting abandoned calls lead to lost service appointments and sales leads, leaving millions of dollars on the table. 

Conversational AI: The smarter way to talk

Conversational AI uses Natural Language Processing (NLP), Natural Language Understanding (NLU), and Machine Learning (ML) to understand and respond to human language like a person. When a person calls a dealership, a conversational AI platform understands their intent and the context of the call, holding dynamic, natural conversations with them. These AI platforms for dealerships provide intelligent call routing and task completion. 

Having dealership call management handled by a conversational AI software frees up human staff from repetitive tasks to focus on complex issues and in-person customers.

Conversational AI technology offers dealerships many benefits, including an enhanced customer experience (CX) thanks to personalized and natural interactions. Callers feel heard and understood and get their inquiries resolved quickly. Another major differentiator is that AI for automotive offers 24/7/365 availability, allowing dealerships to capture after-hours leads and appointment requests.

Conversational AI vs. IVR

When evaluating call handling solutions, the differences between traditional IVR systems and modern conversational AI become starkly apparent, especially within the environment of an automotive dealership. A 2024 Statista survey found that 96 percent of surveyed shoppers believed that more companies should opt for conversational AI options like chatbots over traditional customer support services. Let's compare them across key areas that directly impact your operations and customer relationships.

Customer satisfaction:

• IVR: IVR systems typically lead to low customer satisfaction. Callers often encounter rigid, impersonal menus, get stuck in "IVR jail" by pressing incorrect options, or are unable to express their needs naturally. This frequently results in frustration and a negative perception of the dealership before they even speak to a human.

• Conversational AI: AI generally achieves high customer satisfaction. By understanding natural language, callers can state their needs in their own words. The interaction feels more human-like, intuitive, and efficient, leading to a positive experience.

Appointment setting (service and sales):

• IVR: IVR offers poor or impossible capabilities for actual appointment setting. While an IVR might route a call to the service department, it cannot typically understand appointment requests, check availability, or book appointments directly into a DMS. Conversational AI: AI tools provide automated appointment setting. It can understand requests like "I need an oil change next Tuesday afternoon," check real-time availability in your DMS, and confirm the booking, all without human intervention for many common appointment types. This applies to both service appointments and sales consultations.

Lead qualification:

• IVR: An IVR cannot ask qualifying questions, understand a caller's interest in a new or used vehicle, or gather essential information to pass on to the sales team.

• Conversational AI: Conversational AI is effective at lead qualification. It can engage potential buyers, ask relevant questions (e.g., "Are you interested in a new or used vehicle?", "Do you have a trade-in?"), capture contact details, and then intelligently route this qualified lead to the appropriate sales staff.

Handling complex inquiries:

• IVR: These systems often fail when faced with complex or nuanced inquiries. If a caller's need doesn't fit neatly into a pre-programmed menu option, the IVR cannot adapt, leading to misrouted calls or abandoned attempts.

• Conversational AI: AI understands and resolves or routes intelligently. It can parse more complex requests, answer a wider range of FAQs, and if it cannot fully resolve the issue itself, it can gather context and route the call to the correct department or individual far more accurately than an IVR.

Call abandonment rates:

• IVR: IVRs contribute to high call abandonment rates. The frustration of navigating menus, long hold times after being routed, or the inability to get a simple answer quickly causes many callers to hang up.

• Conversational AI: Platforms like STELLA AI result in lower call abandonment rates. By providing immediate engagement, understanding intent quickly, and often resolving needs on the first interaction, callers are more likely to stay on the line and have their issues addressed.

Staff workload reduction:

• IVR: IVR offers minimal staff workload reduction. While it might filter some calls, it often just delays the caller reaching a human, and staff still have to handle the full scope of the inquiry once connected, including basic questions the IVR couldn't answer.

• Conversational AI: Conversational AI delivers significant staff workload reduction. By automating appointment booking, answering common questions, and qualifying leads, it frees up your human team to focus on more complex customer interactions, revenue-generating activities, and in-person customers.

Modern brand image:

• IVR: Using IVR can project an outdated brand image. Clunky phone menus can make a dealership seem behind the times and less customer-focused.

• Conversational AI: Using AI fosters an innovative, customer-centric brand image. Implementing intelligent, natural language call handling shows customers that the dealership values their time and is leveraging modern technology to provide a superior experience.

STELLA: The automotive-focused conversational AI solution

While the benefits of conversational AI are clear, not all AI solutions are created equal, especially when it comes to the unique demands of an automotive dealership. Generic conversational AI platforms might understand basic language, but they often lack the deep, industry-specific knowledge required to truly serve your customers and support your team effectively. This is where STELLA stands apart. STELLA isn't just conversational AI; it's conversational AI purpose-built for dealerships, designed with an intricate understanding of automotive terminology, common customer inquiries, and the critical workflows that drive your business.

STELLA Service: Handling your service drive calls

Your service department is a cornerstone of customer retention and dealership profitability. STELLA Service is engineered to ensure every service call is an opportunity captured, not a frustration point for your customers or a burden on your advisors.

• Handles inbound service calls 24/7: Never miss a service opportunity, even after hours or when your advisors are busy.

• Books appointments directly into your DMS: STELLA seamlessly integrates with your dealership management system to schedule appointments in real-time, accurately and efficiently, without manual intervention.

• Answers common service questions: STELLA provides instant, accurate answers, freeing up your advisors.

• Reduces hold times and missed service opportunities: By handling routine inquiries and bookings, STELLA ensures callers aren't left waiting or forced to hang up, dramatically improving the customer experience and capturing more revenue.

STELLA Reception: Your dealership's intelligent digital receptionist

First impressions matter, and for many customers, their first interaction with your dealership is over the phone. STELLA Reception acts as a highly efficient, always professional digital receptionist, ensuring every call is handled smoothly and directed appropriately.

• Intelligently routes calls: Whether a caller needs sales, service, parts, finance, or a specific individual, STELLA understands the request and connects them quickly and accurately.

• Captures and qualifies sales leads: STELLA can engage potential sales customers, gather key information, and ensure those valuable leads are promptly routed to your sales team, even during peak times or off-hours.

• Provides a consistent, professional first impression: STELLA greets every caller with a branded, human-like experience, setting a positive tone from the very start of the interaction.

• Spanish-language support: STELLA can provide conversational AI support to Spanish-speaking customers.

Key benefits of choosing STELLA AI for your dealership

By implementing STELLA, dealerships can move beyond the limitations of outdated IVR systems and unlock significant advantages:

• Increased booked appointments: More service appointments scheduled and more qualified sales leads delivered.

• Improved CSI scores: Happier customers who experience efficient, helpful, and immediate service.

• Maximized staff productivity: Your team is freed from repetitive call handling to focus on in-person customers and complex tasks, reducing burnout.

• Captured leads that would otherwise be lost: No more missed calls or opportunities due to busy lines or after-hours inquiries.

• Seamless integration with existing dealership systems: STELLA is designed to work harmoniously with your DMS and other core dealership software.

• A branded, human-like experience that delights callers: Reinforce your dealership's commitment to modern, customer-centric service.

Reach out to our team to get a demo of STELLA and see how it beats IVR systems for your dealership.

See STELLA in Action