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This has been covered a million times I'm sure. I hate asking for further input but I've never really concerned myself with them until now. After reading an interview with the CEO, I'm starting to have concerns. Is this common?

What do dealers think about TrueCar?

Friend? Foe?

Please post your thoughts. I think it's time for me to chime in on the discussion but I want to get some feedback from the industry first.

Thank you in advance for your comments.

Tags: TrueCar

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Another Vendor making an income from their investors, off the backs of auto dealers, by telling the public dealers are not honest.  Put this together with some dealers who are weak enough to have to use this service "which actually lies to consumes" to move metal.   It all shows how some one uses other peoples money and other peoples businesses to create what is really nothing from nothing, and get paid in the middle.   Grow a pair dealers, and tell this vendor to take a hike before he digs in to your parts and service in the same manner, just as he said he is going to.  

Hey William, I read your above comments and, out of curiosity, went to your ADM bio. Your page is definitely "stylin," but it's impossible to read. It's the first one I've seen that's "white on white." Is that really what you had in mind?

The 112 comments on this Automotive News story about Autonation dropping Truecar is a good place to see what the dealer sentiment is.  We dropped them for the same reasons Autonation did.  Should be a no-brainer to any dealer who understands what is going on.

http://www.autonews.com/article/20150709/RETAIL/150709862/autonatio... 

Here you are posting again J.D.  Wouldn't your time be better spent putting a "best practices" association together with like-minded IT vendors of your caliber from around the country?  I mentioned this before and you seemed to think it was a good idea, especially with the trouble you were having with competitive vendors considerably less knowledgable than you.  If we were together discussing this over a "branch water and bourbon," I'd probably be asking how you feel about procrastination.

As to the "True Car" question, just remember they wouldn't exist if dealers weren't using them.  I was discussing it with one of my client GMs (probably the most universally experienced and pragmatic dealer I've ever worked with) as to why he employed them.  His answer was simple.  They're just another "spoke in the wheel" driving towards a bigger monthly total.

The only genuine problems I see with them will come in the future, and it will likely be caused by their particular management's megalomanic tendencies and, of course, the oldest driver of ambition in the world; greed.  That's when they'll try to get paid on every repeat purchase of the customers they "originated."  If that becomes a clause in their contracts, they'll begin independently soliciting that business from all of the data they've collected and I'd guarantee it will end badly, especially for the dealers involved.  (If that comes to be, believe it or not some will still sign up.)

While everyone has a myriad of complaints about them in the various automotive forums I read, the only negative thing I see now is their rather unsavory advertising based upon reinforcing the image that dealers are inherently dishonest.  I don't have a horse in this race, as what I do is designed to emphasize the importance the rep places on their customer relationships, not the other way around, and nothing is stronger than if the customer knows, likes and trusts his rep/dealer, except of course, some ridiculous profit-killng price.             

A couple notes I have regarding True Car. 1. I feel like I sold my soul signing up with True Car, but I felt I needed to after two years. Despite the hundreds of comments, articles and every notion I had to not sign up. I am in a competitive market and close dealers are doing the same. I tried for my Cadillac franchise and have sold 3 cars this month from it. I have (HAVE) to sell 20 Cadillac's a month, with an average of 16 for the past year. If this helps my few car sales, I will do it. 2. From a customers standpoint, I had my last deal leave after my salesman tried to sell them a higher price. It was too much for her and thought there was no negotiation. I called her after as a showroom follow up 2 hours later and she lets me know that she felt she had to haggle and that is the reason she used True Car. She went home so she could work with her other car dealer. I called her back and sold her a vehicle that night at the True Car price. She is happy, we made our back end, great score on CSI, and maybe even a referral. She now feels comfortable with me, the other salesman and will come back for service. If you look at every car sale as 9 more sales from that referral, then maybe that $299 will not be such a cost. 3. You are using a graphic from 2009 and I am sure that it has changed since then. I make my own prices in my dealer portal. I can sell my Escalades at $1000 over and my SRX's $500 under. I choose what to sell it at. The consumer will get 3 choices: the closest dealer, the best price, and ? I think the top dealer in the area who converts?.

 

From what I have learned with the few sales I have had, and this being my first live month working with True Car, is that the customers want and easy experience. They do not want to email 100 dealers, they do not want to haggle, they just want a great experience. If you go to a salon for your hair, customers want a 4 hour highlight to take an hour because they are in a hurry. Everyone is in a hurry and wants the best price with the least amount of work. I use retailmenot.com for all my coupons. Coupons in one area for every store. This is the mindset of people nowadays with our "I want it now and I want it all" attitudes.  It's not that I am standing up for True Car, I still do not like the data I have to send; but I feel I am in a market that dictates my effort. Using the portal is just the same as Edmunds price promise and even my shop click drive. Let's examine even Amazon for a second, people click on "buy it now" and it is one of the highest shopping websites out there. Every sales website wants to mimic their model and we do to the best of our ability. It is because of the ease of use of the website, so if True Car, Edmunds, Autotrader, Cars.com or any other vendor is going to drive the customers to the dealers that understand this, then it is what it is. I know I am all over the place here, but overall unless True Car is gone, I will probably stand with them. Dealers years ago fought and look where True Car is now. It is because this is what the consumer wants.

 

This is easily an emotional subject for some people due to the past history of TrueCar and its CEO which is well known. However the list of companies making money off of dealers is long and TrueCar can't be singled out for that anymore than the rest of them. 

That's not an apology for them but a simple fact.  In fact, this is a capitalistic country that welcomes entrepreneurs and successful business models.  As we know, it is consumers that make a model successful,  whoever can win their hearts and wallets. We usually take pride in that and understand that to compete with any company, we must offer the consumer a reason to choose us over them.  I can't say that I follow their advertising, but it's been quite a while since I've heard anything controversial. 

Now whether they are useful to dealers is another story.  I think that begins and ends with ROI and/or the value of incremental business to any individual dealer.  Some dealers will welcome that business and accept the cost while others will feel insulted by it.  To me, that is the real question and must be answered on an individual basis by individual dealers.

Why is average New Car pricing any different than U/C pricing for entities as KBB and Edmunds do? I yes we know that every u/c is unique in mileage... If the pricing metrics/model provided by True Car is parity to Edmunds and KBB information on preowned @ no charge, stop bitching and drop True Car unless a GM/SM can't overcome transparency internally. But, for Service Department invasion--a 'service fee' of information transparency doesn't exist. I in past as a Dealer in this transparent world that isn't going away, have my entire BDC educated on how to get the consumer into the showroom and service Departments while conducting communications to consumers with the highest levels of integrity, ethics and transparency. When I paid for Price Club/Costco referrals, I then dropped due to their ridiculous escalation in subscription fees, I told the prospects calling, Yes we support the same pricing offered to 'members' and carried on to sell the vehicle. Did not sell any fewer cars/trucks/suv's thereafter on average. Of course the SM/GM/Dealer should approve that type repertoire with prospective clients. It's not going away, so, find solutions in your training and development with your staff to avoid more stupid expense money to a third party vampire. In fact, being transparent with the customer and telling them that at ABC Ford down the freeway having True Car pricing pays True Car a large subscription fee if you buy there. Service requires in most cases the mechanic to inspect the car before doing operations approved by any client for most work, unless, basic maintenance work that dealers are capturing ONLY 30% of the market place service work vs Independents@ 70% as service advisors only know how via limited training, if any, to quote a price over the phone vs. professionally gaining a appointment for a 'free inspection' to determine if that work is really needed...Yes, many of the third parties will be parasites as long as the Dealer base supports them financially. 

If they have to demonize dealers first in order to position themselves as the consumer's saviour, they've already gone too far.  All one needs to know is that their CEO believes dealers are a needless tier of distribution.  That should be enough.  Learn how to use the TC site to close deals WITHOUT doing business with them.

TrueCar by the Numbers 

I invite you to view some research on TrueCar that was posted earlier this year.

Highlight- They are losing about $48 million a year for last three years.  How many dealerships would be in business if they were in the same scenario? 

 

Well, it's worked for Amazon, but TrueCar is in a box.  Their customers are dealers, the same people they demonize to drive consumer traffic.  That's a fine line to walk. 

In consumer social media it already well known that TC changed its business model to provide more gross profit to dealers.  That's called "The Great TrueCar Sellout."  That's why more consumers who get a TC price of their website use the number to begin negotiations while fewer just come in and lay down for it.

There have always been those in auto who want to give away gross profit out of the gate in an attempt to mollify customers who haven't even asked for it yet.  Price leader advertising has always been effective.  And dealers have always referred to their competitors as "those other guys" who will charge you to much.  But now we have 3rd parties denigrating car dealers in general while dealers are the ones paying for that message.  This is a bridge too far and dealers only have themselves to blame when they subsidize it.

Having set up plenty of accountability or attrition models for dealers, it depends on the 3rd party source, which includes TrueCar. Measuring 3rd party leads all the way to an actual sale (ROI) process, which can be easily done.

We can't just say "all 3rd party lead providers are worthless." That's unfair and frankly untrue. Many quality leads are provided via AutoTrader, Cars.com (better quality), Edmunds and TrueCar. I see a bigger problem, the lack of proper sales process (salesmen and BDCs) within the rooftops themselves. There really is no such thing as a bad lead, in my book. It's the failure to process the lead, the failure to understand and engage the potential buyer that's the problem, not the lead providers.

There are plenty of tools out there that allow dealers to pull sales data from a DMS and / or CRM, coupling that against 3rd party lead costs, enabling a clear measurement of Cost Per Lead, Cost Per Acquisition. 3rd party lead providers should probably have their hand in training and facilitating a better sales process, across the board. I don't know if that means training a sales staff or BDC according to best practices or what? I don't think there's an easy answer or solution. I'd be a hypocrite to say I know the best solution, but having provider dealers with loads of quality leads over the years, I can tell which 3rd party lead provider does their job better (against the target demographic), which dealers have a clue, etc. just by analyzing their ROI.

The amount of money spent on AutoTrader in comparison to the quality leads coming through is outrageous. Cars.com is much better, from what I've seen, in terms of cost and quality of leads. Edmunds is ok. TrueCar also pricey. I have repeatedly made recommendations to dump most of them.

For dealers, buying leads from 3rd parties is the easy way out and they are told to do so from many "consultants", but you're right, the money should be spent elsewhere. Paid Search, Content Marketing and better platform solutions such as Dealer Inspire. Accountability through tools like http://www.tapanalytics.com/tapanalytics-features or http://www.roi-bot.com (works with most automotive-centric service provider solutions and their APIs).

What most 3rd party lead providers will not tell you, demographic marketing behaviors vary from each other. What converts in Jacksonville, Florida might not in Seattle, Washington and they fail to take this into consideration. They throw all of the same hooks in one lake and preach to dealers that it's a global panacea. Some big, red shiny button offering that always works no matter where. Neuromarketing is an interesting field of study @https://en.wikipedia.org/wiki/Neuromarketing. What is it exactly that makes a visitor tick and want to qualify as as lead?

Alexander, Bingo!  I can't say, as you do, that there are no bad leads but I agree with the larger assertion that, in most cases, dealers are unprepared, in both skills and determination, to handle the various kinds of leads that come in.  Everybody wants the gravy and low-hanging fruit and gives lip-service to real, quality lead handling and follow-up.  Any lead that doesn't lay down is a bad lead, OR if you have bad training, processes and accountability, your people are no good.

I used to say that process is numero uno and I still believe it is essential but now I know that structure and organization are even more crucial.  If a dealer's organizational structure and culture do not support it, no amount of process, training, and even accountability will produce results.  It then becomes a numbers game.  How many leads do I have to burn through to get a sale?

How does this relate to TrueCar?  I say the cost of a TrueCar sale is often small compared to the cost of marketing, labor and timewasting we apply to our normal 3rd party leads.  When determining ROI, how many dealers figure in the labor hours of their BDC? I am an advocate of long-term follow-up but TrueCar leads have shown themselves to be in-market now buyers where labor-hour costs are minimal.  If a dealer, as they say, is dedicated to pursuing every customer until the end,  a TrueCar lead might be more cost-effective after you factor in the labor cost of long-term follow-up.

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