TrueCar is overhauling how it does business with dealers.
On Sunday, the company revealed a series of sweeping changes to its product offering, data policies, billing model and practices, consumer-facing advertising and website messaging — plans to hire more than 100 field services consultants to help dealers get the most out of TrueCar.
Some of these changes are already in effect, some are on the horizon.
These plans, shared with AuSM ahead of being made public Sunday, are part of TrueCar’s 2016 Dealer Pledge. They’re the culmination of a three-month process that began when president and chief executive officer Chip Perry arrived in December.
Perry hit the ground running, meeting with dozens of dealers over the course of two months, discussing the challenges they have had with TrueCar, as well as what worked well for them.
For the last month, he and the TrueCar team have been assembling and begun rolling out changes designed to foster a mutually beneficial environment for both dealers and consumers.
That’s the new philosophy at TrueCar. The way it does business must be a win-win for dealers and consumers, Perry said.
Perry talked with AuSM by phone on Saturday about those changes and what the new TrueCar is all about.
TrueCar’s pledge and the actions it is taking are detailed extensively in a 28-page presentation (scheduled to be posted to a website slated to go live Sunday evening, along with an accompanying video from Perry that can be seen at the top of this page), and in a letter from Perry slated to be sent to dealers on Sunday evening, as well.
Appropriately enough, Perry, once an executive with the Los Angeles Times, boiled it down to three “headlines” in his conversation with AuSM.
First headline: TrueCar is making substantial and important changes to its product to correct what Perry said has been detrimental to dealer profitability. The company is aiming to make TrueCar a better place to do business for dealers.
Second headline: TrueCar is revamping its data polices, billing model and billing practices.
Third headline: TrueCar is making changes in its consumer-facing advertising.
Prior to Perry’s official start date of Dec. 15, he said his top priority was to “to reach out and work personally with many dealers all across the country.”
He didn’t waste any time doing so. Two months was spent meeting with dealers, “very carefully cataloging tall those pain points,” Perry told AuSM on Saturday.
The TrueCar team has spent the past month crafting the new pledge, and actually rolling out some of the changes.
Reflecting the same approach when he arrived late last fall, Perry didn’t mince words when talking about the issues TrueCar has faced with dealers.
“We’re digging out of a pretty deep hole,” he told AuSM.
But the company has forged what Perry called a comprehensive and meaningful plan to address those problems. It was “no-holds-barred.”
When meeting with dealers, Perry told them to “give me the unvarnished truth.”
What worked for them? What didn’t work?
Perry recognizes that there are TrueCar Certified dealers who aren’t happy with the way the company did business. But the company is aiming for this new plan to help improve upon that.
Perry emphasizes that the “proof is in the pudding.” Don’t expect a rapid turnaround. It will be a gradual approach, again emphasizing the company is digging out of a big hole.
“I knew even before I joined TrueCar that big changes were needed, but hearing very directly about the concerns of dealers helped me formulate a new direction for TrueCar, one that is designed to make our marketplace produce a win-win for both consumers and dealers,” Perry said in the letter to dealers. “Some of the changes requested by dealers have already been made, some will happen over the next three months, and the rest will roll out over the balance of the year.”
He later adds in the letter: “We take these promises very seriously and we fully expect you to hold us accountable for delivering on them. The proof, as they say, will be in the pudding.
“As we proceed, we will keep listening to dealers and we will be making even more changes based on your ongoing back. If you would ever like to discuss any part of our Dealer Pledge, please feel free to me — I am always interested in hearing about how we can make TrueCar work better for everyone in our industry,” Perry said.
Product offering changes
The biggest takeaway here: TrueCar becomes less of a purely price-driven shopping. The changes will allow dealers to compete on factors other than price. Some of the more specific changes include:
- A more localized price curve instead of a regional price curve. That went live on Thursday.
- The estimated monthly payment has been removed, as consumers will now only see monthly payment info after he or she starts the payment calculation. That went live on March 16, with an enhanced version coming in the third quarter.
- Dealer cash won’t be automatically applied. That, too, was effective March 16.
- Removal of the dealer list page, which will happen in the second quarter. Perry said this list — an anonymous list consumers could see before filling out the registration — was one of the major pain points for dealers. The problem is that it allowed consumers to put pressure on dealers without having registered to be users. TrueCar is eliminating that page, meaning consumers have to register and then they will be introduced to actual inventory and pricing from specific dealers.
- In other words, dealers won’t see pricing from anonymous dealers before submitting a lead, which TrueCar said in its slides “commoditized dealers based on price only.” Instead of an unbranded dealer list page, there will be a dealer branding page (going live in Q2, as well), designed to give stores a chance to compete on attributes beyond price.
Perry said this process allows consumers to access a “broader array of info about the dealer” and make their decision on factors other than just price.
“By eliminating the non-branded dealer list page … we’re eliminating the use of this un-actionable information that has caused so much heartache for TrueCar (dealers) and non-TrueCar dealers alike, as well as consumers,” Perry told AuSM.
With the dealer branding page, we asked Perry if dealers will have the option to choose what attributes they highlight.
“Not just the option: the total control over it,” Perry answered.
In essence, dealers will have complete control over the “Why Buy From Me” content.
Additionally, TrueCar is doing away with the “virtual vehicles,” and replacing them with actual VIN-based offers. That happens in Q2.
So, instead of getting a non-branded price and a virtual vehicle, consumers will go into the dealer inventory that matches they car they configured, Perry said.
In April, TrueCar is upgrading its dealer tools to make it easier for stores to sell used cars, as well. Next month, dealers can send upfront offers on their used cars, the company said in its pledge. Dealers’ used cars will be brought in to TrueCar’s tool set as an extension of TrueCar’s current Create Offer flow, the company said.
“This updated tool will allow dealers to create custom offers on in-stock merchandise for used-car shoppers as well as alternatives for new-vehicle shoppers,” the company explained in its pledge.
Another move in Q2 will be TrueCar easing the process for dealers to punch in their TrueCar activities into their respective CRMs.
Redesign of ‘how we treat you as customers’
Some of the highlights here:
- TrueCar will pilot an optional subscription billing model in Georgia, which currently uses the pay-per-sale model, in the second quarter. A national roll-out is planned for later in the year.
- TrueCar aims to smooth out invoicing in the states using the pay-per-sale model. In Q2, TrueCar will give dealers the choice to get a consolidated invoice monthly.
- In Q2, the company is aiming to make the credit request process more amendable for dealers using the pay-per-sale model.
- Regarding the data policies, some key points: TrueCar is taking consumer non-sale data out of the “sales matching” process. The TrueCar pricing curve will utilize DMS data with permission only. The company is also planning on bringing in a third-party to “validate our strict adherence to our data policies.”
And the 100- field service consultants TrueCar plans on hiring in the next year. Perry said these will be “truly service people.” The goal is to have face-to-face interactions with TrueCar customers at least once a month.
Their focus will be on helping dealers learn about the latest technologies of the TrueCar tool, offering best practices and so forth. They will be there to help dealers maximize TrueCar; they “aren’t there to sell anything to dealers,” Perry said.
Changes to consumer messaging
For starters, you won’t see the “never overpay” in advertising messages. Instead, it will be more about “ultimate price transparency,” according to the slides. That goes live in Q2.
In mid-March, TrueCar adjusted its existing TV ads, as well.
“Previously, we focused on excessive time spent at the dealership and the hassle of negotiating a price,” the company said in its pledge. “Now we turn the conversation and focus on the ease of using TrueCar during the car-buying process.”
You can also expect to see more TV ad messages about the important of TrueCar Certified Dealers. The company is currently testing those ads, which will go live in the second half of the year. TrueCar also launched a “Dealer Spotlight” video series in mid-March that showcase “the important role dealers play in their communities.”
Lastly, TrueCar cleared the air on some concerns regarding F&I and trade-in product offerings potentially on tap down the road.
“Please know that we will only support indirect finance and will not offer third-party direct finance products through TrueCar.com. In addition, any Trade-In product we introduce will be based on a well-accepted wholesale valuation and will be offered on a dealer opt-in basis,” Perry said in the letter. “We hope that these clarifications will alleviate any concern that dealers may have about TrueCar’s future product offerings.”
In his interview with AuSM, Perry made it clear that this new approach was not just about his goals.
He said he’s “happy to lead the parade,” but he emphasized that the overall company is “energized” and “fully engaged” to make TrueCar a better experience for dealers.
As Perry put it, the entire company and its management team is “ready, willing and able” to put these changes into action.