Enhanced Customer Service Handling Enhances Loyalty, Study Reveals
In a recent mystery-shopping survey conducted by Pied Piper, it was discovered that artificial intelligence (AI) is transforming the way service calls are handled at car dealerships, with AI successfully managing 91% of service calls without human intervention [1][3]. The average Service Telephone Effectiveness (STE) score for AI systems is 72, which is 8 points higher than the national dealer group average for 2025 and near the score of top-performing human dealer groups.
AI systems excel at routine tasks like scheduling standard maintenance appointments and handling simple service requests [1][3]. However, challenges arise when handing off calls from AI to human associates. When AI cannot handle a call (about 9% of cases), the handoff to humans fails 56% of the time, leading to issues such as customers being asked to call back later, reaching voicemail, long holds, or dropped calls [1][3]. These transfer failures cause customer dissatisfaction, particularly because the transfer attempts happen after about 88 seconds into the call, making the experience feel like wasted time for customers.
Despite these challenges, the benefits of AI adoption reported by dealerships are significant. These include higher appointment capture rates, increased repair order volume and dollar value, improved customer satisfaction scores (CSI), shorter service cycle times, and reduced advisor burnout and staff turnover [5].
To optimize the effectiveness of AI in service calls, dealerships must use AI as a complementary tool, not a full replacement, ensuring human staff remain engaged and empowered. Refining the transfer and handoff processes to avoid disruptions and poor customer experiences is also crucial. Combining AI efficiency with human judgment for complex or multi-issue calls is essential [3][5].
The improvements largely stemmed from a reduced rate of negatives compared to the previous year, including less time spent on hold and fewer mission failures. Pied Piper's survey found that service customers were placed on hold for more than two minutes only 2% of the time on average this year, compared to 13% in 2024. The number of service customers who disconnected before the service department offered an appointment dropped from 13% last year to 9% this year [2].
Pied Piper ranked dealerships based on their telephone effectiveness, with Group 1 Automotive coming out on top. The average caller reached a service associate in 51 seconds for top-ranked Group 1, eight seconds faster than Group 1's performance last year and nine seconds quicker than this year's dealer group average [4].
Some vendors offer call monitoring services to dealers, which can help improve handoff processes and overall customer satisfaction. Fran O'Hagan, CEO of Pied Piper, mentioned that increasing visibility of service staff phone handling leads directly to improvement [2].
In conclusion, while AI currently excels at handling most service calls at car dealerships with high success and quality, overcoming the challenges in smooth handoffs to humans when calls are complex is key for maintaining customer satisfaction and maximizing AI’s benefits in dealership service operations.
References: [1] AI in Car Dealerships: A Double-Edged Sword. (2025). Automotive News. Retrieved from https://www.autonews.com/dealer-awards/ai-car-dealerships-double-edged-sword
[2] Pied Piper's Mystery Shopping Survey Reveals Improvements in Car Dealership Service Calls. (2025). Pied Piper Press Release. Retrieved from https://www.piedpiper.com/press-releases/pied-piper-mystery-shopping-survey-reveals-improvements-in-car-dealership-service-calls
[3] The Role of AI in Car Dealerships: A Guide for Dealerships. (2025). National Automobile Dealers Association. Retrieved from https://www.nada.org/guides/the-role-of-ai-in-car-dealerships-a-guide-for-dealerships
[4] Top-Performing Dealerships in Pied Piper's Telephone Effectiveness Study. (2025). Pied Piper Press Release. Retrieved from https://www.piedpiper.com/press-releases/top-performing-dealerships-in-pied-piper-s-telephone-effectiveness-study
[5] The Impact of AI on Car Dealership Operations. (2025). McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-impact-of-ai-on-car-dealership-operations
Technology, particularly artificial intelligence (AI), is significantly transforming car dealerships by managing 91% of service calls effectively without human intervention. However, when AI cannot handle a call (9% of cases), the handoff to humans fails 56% of the time, leading to customer dissatisfaction. To optimize AI's benefits, it's crucial for dealerships to refine the transfer and handoff processes and use AI as a complementary tool with human staff for complex or multi-issue calls.
