Automotive Digital Marketing

Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders

Loading... Be Patient!

I have a friend who works for a major automotive lead provider... She sent the following bullet pointed lists to me, and asked that I do not disclose her identity.  She copied these lists out of an email that her company's newest VP (who came from True Car and worked directly for Scott Painter) sent to their internal team.


  • Zag model is still the core which is the affiliate model of becoming the provider for (USAA, AAA, AMEX, Costco, etc…)
  • The only way a dealer can get the leads for these customers is by partnering with TC
  • Sales Team of 8 outside (# as of last summer, most likely a lot more now) go out and build the affiliate network
  • Inside & Outside sales teams call on dealers to recruit for the program – 12 inside sales reps that handle a variety of duties
  • They similar to Direct sign up 3 dealers in a “market”
  • Dealers use an online tool to submit pricing, and won’t be picked as a match to a customer unless they have good pricing that is closing salesIt’s what goes into the algo that tell a consumer where there best dealer match is that drives the sales probability and is the call to action for the consumer
    • Waiting list of dealers in most markets
    • There is a sophisticated algorithm that looks at
      • dealer distance to consumer
      • price of vehicle submitted by dealer
      • what’s available on the dealers lot
      • how many deals the dealer has closed
      • Consumer is always presented 3 dealer options
      • Secret Sauce is how they present the dealer options to the consumer:
        • Based on their matching criteria they have data on close rates that will match a customer to a dealer who may not be priced the best or the closest, but the are the right choice based on what the algo spits out as best close rates by dealer
        • If your not closing sales as a dealer you will show up less often, and you get a visit from the TC rep and they may bring in another dealer
        • Dealers do end up competing to be one of the 3 dealers & then really working hard to try to close as many as possible
        • The more deals you close as a dealer the more business that comes your way
        • Thought it was $280/sale from the dealer invoiced to TC, but then thought it might just be flat $300
        • The key is the dealer has to give them DMS access to their sale data and they have a big team of folks analyzing that data to determine if a car sold:
          • Doesn’t have to be the car on the lead, dealer must pay if that customer (wife, son, daughter, they match the data) buys a car from the store
          • They boast a 99% success rate in determining if a TC customer bought a car there
          • 5K – 8K dealers signed up – waiting list
          • They use the DMS data they are pulling (Don’t have AN DMS Data) to populate local pricing offered
          • TC runs at a net loss, Zag piece (affiliate programs) break even with the 2 combined – trying to get consumer mind share subsidizing TC with Zag profits
          • Getting the DMS data is giving them a bunch more data that their analytics team uses to fuel their dealer option algorithms, and set pricing. ALG acquisition helps on the data side as well.
          • Outside Sales
            • New dealers for their Zag/Affiliate program
            • Dealers competing for that seat
            • Pricing drives down through competition, dealers submit pricing online
            • If a dealer low balls the price, the algo calcs the % of deals closed, how many times the price is presented, and with dealers waiting to earn the spot they manage themselves to stay honest to the model. If a dealer is playing games then they get a visit from a rep and dealers are removed.
            • The hope is customers bring in the quotes branded as TruCar, and with the TV & Radio offline ads they build a name where dealers feel like they have to be a part of the program. Dealers fight to be preferred dealers and they hope the feeling is they cant afford to not play
            • Inside c/s svc QA team does work on post sales with customer to see how their experience was, but there is no pre-sale consumer interaction
              • They QA the dealer, make sure sale went through, and dealers service was good
              • Inside Sales team calls dealers to train, work on pricing, and showing dealers how to submit competitive pricing
              • They have a big team doing data extracts like we do on ESP to make sure they know if a customer bought a car
                • They have an algorithm that automates a piece of this data extract as well – again 99% success rate quoted in matching sale data
                • THE SPECIAL SAUCE
                  • Evidently they have done a ton of work to calculate the probability of sale to figure out which 3 dealers to present to the consumer and how exactly to present those choices to give the best chance of closing the sale – and it works!
                  • The website will say:
                    • Dealer ABC is 50 miles away, match, best price
                    • Dealer XYZ is 10 miles away, ok match, 2nd best price
                    • Dealer 123 is 15 miles away, perfect match between distance & price
  • The webpage drives the consumer decision, and all prices are within 3% generally
  • They close more sales by presenting the “right” alternative
  • Comes down to how you present the dealer options based mostly on: It may not be the biggest dealer in a market that is the best match, often it is not
    • Dealer Location
    • Dealer Price
    • Close Rate
  • They look at who performs the best also from their affiliate (Zag) dealer network and closing ratio’s there
  • Big issues – Consumers pissed that they got hosed on their trade-in (They are close to rolling out TrueTrade model) – not working with AN on it
  • Dealer not honoring price cert – Consumer gets switched at the store, and feels like price was bogus
  • is their used car channel truetrade built from this model
    • They are scraping the DMS systems of dealers to get data, aggregate the online listings like vAuto
    • Phase 1 – Here is where to price your trade
    • Phase 2 – CR – Condition Report – Use 3rd Party Inspection company (Data Scan, AiM, AutoVin/Adesa, EAA, others…)
    • Phase 3 – Cash offer for car (see my AutoNation notes on how they suggest to do it)
    • Newer COO/Pres Steve Hanson is a good operator
    • DMS extraction is key for them to get the data that drives their complicated algorithms
    • They are getting a ton of data from the DMS extractions and using it against the dealer to drive pricing down – this is a big risk for them, if dealers cut them off they are hosed.
    • Their customer matching process catches customers who change cars, names, address, phone #, email, etc… so they get paid on every customer they send to a dealer if a car is sold, any car is sold
    • They want to convince dealers to pull all of their 3rd party ad dollars back (Trader, cars, us, etc…), and use that money to help drive unit pricing down so they can drive volume to the stores
    • AutoNation just ended their relationship and cut TC off completely
      • Rxx Fxxx was an exec at Zag (CEO I think he said, or COO) – he knows the secret sauce and stated they would never agree to let TC have access to their DMS data – they do get their CRM data
      • Rxx is not a fan and thinks dealers are going to come around and not let TC have DMS access
      • Brought up trade-in value issues TC is having
      • Also brought up lack of control at the store to mitigate bait and switch


Select Affinity Partners (No-Haggle Auto Buying Program) – Zag traditional model – only premium dealers get these leads

  • American Automobile Association (AAA)
  • American Express
  • Bank of America
  • Capital One
  • eBay Motors
  • Geico
  • The Hartford Financial Services
  • Liberty Mutual
  • National Education Association (NEA)
  • Overstock
  • Progressive
  • Nationwide Insurance
  • Pentagon Federal Credit Union (PenFed)
  • United Services Automobile Association (USAA)
  • UPromise

Distribution Partners (TrueCar Price Reports)

  • Automobile Magazine
  • Car Buying Tips
  • Car Price Secrets
  • HomeNet Automotive
  • Honk
  • Motor Trend Magazine
  • New Cars
  • Price Quotes
  • The Car Connection
  • US News Rankings and Reviews
  • Vehix
  • vLane
  • Web2Carz
  • Why Pay Sticker



I am posting this to the ADM Forum section to generate discussions around the topics referenced in each section and the bullet points that follow... What is your opinion or insight on the listed sections shown?

Find more videos like this on Automotive Digital Marketing Professional Community



Haley Paglia has registered a special vanity domain and short-cut URL for the ADM Professional Community and assigned it to this Forum Discussion:

Please feel free to use this short-cut URL to refer people to this discussion and to get here without having to start at the ADM Showroom page...

Tags: Information, Insider, TrueCar

Views: 7212


Reply to This

Replies to This ADM Discussion

Very interesting Ralph. Thanks for posting. Noted: "TC runs at a net loss, Zag piece (affiliate programs) break even with the 2 combined – trying to get consumer mind share subsidizing TC with Zag profits." Where are the multi millions of dollars of funding coming from? TrueCar looks more and more like a house of cards ready to fall (falling). Keep up the pressure. You all are providing a VALUABLE dealer service with this one. Good Selling! dtg

when you think about the Zag = $ and TrueCar is ? on the $, understand the $200million bet to the billion-dollar IPO of stock is this:  pre-owned (, insurance (expect or some such), financing (same for, aftermarkets (same for and  They are in it to win it, and I mean ALL of it:  They are going to be the Expedia, with perhaps a PriceLine twist, of the auto industry.  Anybody book travel with a travel agent any more?

No.  Exactly.

It seems to me that the real problem that dealers should have with TrueCar/ZAG is not as much the disclosure of transaction prices in the now infamous bell shaped curve at, but instead, the insidiousness of trying to predict who will buy a car from a dealer ANYWAYS and then charge that dealership $300 for a vehicle sale that TrueCar did not actually facilitate.  I said to Scott Painter during our phone call that if he is successful in enrolling 10,000 dealers he will have in fact implemented a tax on every new vehicle sold for $300 that TrueCar collects. Three dealers in each geographic area that TrueCar defines, and the leads go to the dealer that would have been most likely to sell that car even if TrueCar was not involved... Paying for sales a dealership would have made anyways!!!

If you get enough time, I put the recording of the call I had with him up here in the Videos section (also in my "Tear Down This Wall" blog).  I told him that I believed he has the wrong answer for modernizing the auto retail business, AND that I am sure that dealers would have sold just as many vehicles as without TrueCar (if they shut their doors now, we would NOT miss them).  $1.5billion "saved for the consumer" . . . that's in some part DEALER PROFITS which pay all of us, dealer, vendor, and consultant.  

I will say that their use of the DMS data, and the critical nature of it, is the Achilles heel.  Cut them out of that, and they are a data house.

Here is a topic that we have not paid much attention to and I feel is in reality, TrueCars biggest threat to the automotive retail industry. This is an excerpt from Scott Painters Tech Crunch video.

"...future releases will address other parts of the car buying process, financing, leasing, insurance, maintenance, repair, refueling it’s a four trillion dollar ecosystem, it’s the biggest category on the web today and from a business model perspective, being able to aggregate an audience is core to the advertising business model and the auto category is one of the most lucrative in terms of a CPM and lead generation basis…”

Scott Painter - TrueCar

This shows Painters true vision of automotive retail as a "Ripe for the picking" cash crop. With TrueCars USAA and Capital One affiliation it appears to be only a matter of time before the consumer walks into your store with their Truecar Deal jacket to take delivery of their new car.

At the risk of being flamed, I wanted to point out one thing.

First, I did listen to your entire recorded phone call with Scott. It was very interesting and Scott is a very articulate speaker.

Second, on the "we would've gotten the sales anyways without TrueCar" part. I agree with your position that the consumers would probably have bought the vehicles they did whether TrueCar existed or not. I think his point was that TrueCar may have steered that sale to its dealer partners INSTEAD of another dealer. Some (not all, mind you) of those sales went to TC dealer partners instead of their local dealer or whomever would have captured the sale normally and that's a part of the value that TC offers to its dealer partners. Those people may have bought cars, Keith, but they might not have bought them from YOU.

I think that was his point and I could see that as being accurate.

Arnold, TrueCar is charging $300 for a pricing, distance, and PARTICIPATION algorithm to drive business to an individual dealer--correct.  The industry doesn't need him or his company to sell the exact same # of cars.  He isn't incremental business, he is directed business.  I stand by what I said.  WE don't need him, and in fact dealers who use him could easily find shoppers with better margins using better online marketing.  We didn't need to "save the consumers" $1.5billion--any dealer who uses TrueCar now is just funding their,,, (and, which is live and called  He has said this is TrueCar's goal.  Total domination.

I don't think your head is on straight on this item.  If you think your voice is one of sanity in the wilderness of anti-TrueCar emotion, I'd suggest you reconsider.  In fact, I'd suggest you become suddenly converted the other direction.  Otherwise, nobody is going to have to flame you.

You'll be burned, anyway.

If I were still in retail, I would sign up for any performance based lead provider. I was with Autotropolis and CarsDirect. I sold many cars through them and I ALWAYS controlled if I was going to agree to pricing. With CarsDirect, I simply provided a list of pricing on particular models each month but this was a list I created. I would certainly rather do this than pay $25/lead.

I've also seen quite a few dealers comment in many different places that said they were happy with TrueCar and sold cars. 

I don't disagree that IF they are taking this data from the DMS (which Scott denied in your phone call) that the dealer should police their data. I was just pointing out MY 2 cents on the whole "we would've gotten them anyways". 

Scott did NOT deny taking the DMS data.  He denied the specific use of it for the pricing curve.  Very different, especially if you read Ralph's email above, from NOT using it.

He uses it alright.  In thankfulness of your support, I think he should launch and, as I told him about, THEN it is personal to you.  

Because is damn sure personal to me.  Right now.

I stand corrected, yes, he did say what you are saying. I meant to drive his bell curve. I shouldve been more clear.

Mike, In cases like these, I always made sure that I only paid the vendor which I received the lead from FIRST. If a third-party lead provider or whomever wasn't willing to agree to this, then I wouldnt sign up with them. Of course, we were spending $15k+/mo on leads so they mightve been more lenient towards me than others.

Betcha they still wanted to be paid.  Hey, whose customers ARE these, anyway?  :)


Automotive Professional Network and Resource Exchange for Car Dealers, Managers, OEM and Marketing Practitioners seeking Best Practices.

ADM Sponsor

William B. Terry
Rated by Super Lawyers

loading ...

ADM Badge


Based On Your Interests...

ADM Consulting, LLC

Onsite/Offsite Combination ADM Consulting, LLC Professional Services
Select the maximum monthly investment you plan to make
Sign up for

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......



ADM Professional Services
Phone Consultation
Topic or Issue:

Top Automotive Marketing Forum Discussions

Share the Best Content w/AutoMarketing Community

Microsoft Office PowerPoint

© 2020   Created by Ralph Paglia.   Powered by

ADM Badges  |  Report an Issue  |  Terms of Service, pub-1344093271332697, DIRECT, f08c47fec0942fa0, pub-1344093271332697, DIRECT, f08c47fec0942fa0