Do consumers want the lowest price or a fair price? TrueCar is betting on a fair price.
The third-party shopping site, once a lightning rod in the industry, caused dealer outrage with its emphasis on pushing the lowest prices to shoppers in its advertising, and later with messaging that implied that some dealers overcharge consumers. That practice is now gone as the site rehabilitates its image to become a friend of dealers that touts pricing transparency.
TrueCar's lead volume is at record levels, about 500,000 each month, says CEO Chip Perry, who was hired in late 2015 to succeed Scott Painter. The lead numbers have grown by roughly 20 to 25 percent in each of the last two years, and Perry expects that to continue in 2019.
Staff Reporter Vince Bond Jr. spoke with Perry and Brian Skutta, TrueCar's executive vice president of dealer sales and service, on April 30 about the evolution of TrueCar.
Q: How has TrueCar followed through on its dealer pledge? What has it done with its site to improve it?
A: Perry: Two years ago, we enacted a dealer pledge. It was based on a deep set of conversations we had with dealer clients about the issues they had with TrueCar. Based on their feedback, we made a battery of changes to our website, to our advertising, to our service approach and to our data policies.
Fortunately, the dealer response has been very positive. We now have more than 3,000 dealers more than we had two years ago. Our satisfaction scores from our surveys with dealers have improved dramatically. We made a bunch of changes that were designed to make this company more of a win-win for consumers and dealers. In the past, it had been tilted significantly in a way that dealers found harmful to them.
We made changes in our product that significantly reduced dealer concerns about the race to the bottom. We did this by improving how the price curve was presented and the information in the curve was presented.
We made substantive changes to the website that will continue to give consumers what they want, which is transparent upfront pricing and an understanding of market average pricing so they understand if they're getting a fair deal or not. That's what consumers really want, is to understand if they're getting a fair deal. It wasn't that hard to confront dealer concerns and admit that we needed to change. The dealers are key to TrueCar's success and we embraced the need to change by investing in our dealer sales and service team and adopting a companywide culture that understood dealers as our true customers.
How has the company's ad messaging changed since 2016 to address dealer concerns?
Perry:We've changed the language and the marketing significantly to no longer prey on the negative stereotypes of dealers. We used to say, "Never overpay, come to TrueCar." That implies dealers overcharge. There's no need to paint dealers in a negative light. We've taken a much more positive approach. We want to explain how consumers will get introduced to a transparency-oriented dealer when they come to TrueCar, a dealer willing to price their cars in a market context and be upfront about it, and disclose all of their fees and accessories. We don't say it's the best price, the lowest price. We imply it's a fair price because of the transparency the marketplace creates.
What are some of the next steps in the evolution of TrueCar?
Skutta:We have three big things we announced at NADA. One is VIN-based pricing. In the past, we would provide pricing at a make, model and trim level. We now allow the dealer to price at the individual VIN level. That way, when a consumer comes through and registers, they get unique VIN pricing as well.
What the consumer is able to do through TrueCar.com, on a dealer's website or in a dealer's showroom, they can actually use the TrueCar Trade tool to value their trade. What you can really see, in real time as the consumer describes their car, we'll show them how the value changes. If a car is white vs. purple, there's a value change to that. If a car has 60,000 miles vs. 30,000 miles, there's a value change to that. Rather than aggregate information and submit back the result, consumers can see the value change in real time within the TrueCar Trade application.
The third thing we introduced for this year is TrueCar University. It's the digital execution of our service strategy. We can't be in every dealership every day. We created TrueCar University, which houses our proprietary educational content. We're just now beginning to supplement the tool with industry educational content, so all of our customers can have access to how to be successful on TrueCar in a digital format so folks can be trained online at their own pace in order to be most successful, not only on our program, but just in general as it relates to lead handling.