DealerELITE EXCLUSIVE:
Q&A with TrueCar CEO, Chip Perry

Q.  Why did you create the Dealer Pledge?

It was perfectly obvious right from the get go that we needed to do something very significant and very visible and very accountable in order to prove to dealers that we have clearly heard their concerns about our business and we are seriously committed to fixing them.  We want to put ourselves out there and show dealers we really mean what we are saying and that we will be making even more changes over time to earn their business.

Q.  What is the biggest change you are making?

We are moving to rebalance our value proposition in order to create more of a win-win for both consumers and dealers within our marketplace.  We are doing this by changing our site to reduce the use of TrueCar as a price-only driven shopping tool and enable dealers to compete on factors other than just price.  The big change here is the removal of the page on our site called the Dealer List that provides vehicle pricing from unnamed dealers before a user is introduced to a dealer.  This page heavily commoditized the dealer and enabled consumers who have not fully utilized our service to use TrueCar’s information to pressure dealers to lower their prices.  The real purpose of our business is to enable consumers to get clear pricing transparency on what others have paid for their car and then receive pricing information and offers via a private one to one communication from our TrueCar Certified Dealers.  By removing the unbranded Dealer List page we aren’t reducing our value to our users at all and we are reducing the negative side effects that came from our old consumer experience.

Q.  Have you made any changes to address the complaint from dealers that TrueCar’s product offering created friction between the consumer and the dealer at the dealership?

We are working hard to take sand out of the gears and reduce friction when we introduce consumers to dealers through a number of product changes including shifting away from presenting “Virtual Cars” that may not exist in favor of VIN based offers that are more relevant to consumers and help dealers sell cars they actually have in-stock.  We are also making our pricing curves more localized and removing the automatically populated monthly payment from our site to be sure that consumers understand that their financing is driven by a number of variables that are worked out at the dealership.

Q.  Many dealers have seen TrueCar as overly consumer-centric, forgetting that it is dealers who are TrueCar’s paying customers. Have you made any changes to address this concern?   

We have moved to address dealers’ concerns about how we treat them as customers by revising our data and billing policies and significantly expanding our staff of Field Service Consultants.  With regard to our data policies, we are now purging information that we receive in our Sales Matching process about consumers who did not use TrueCar during their shopping process.  We are also reaffirming that we do not use the dealer’s transaction pricing data from their DMS to power our Pricing Curve unless we have the dealer’s explicit permission to do so, and we are planning to bring in a trusted third party to validate this and other aspects of our data policies.  With regard to our billing policies we will soon start a test of optional subscription billing in one state to enable dealers who prefer a subscription plan instead of our normal Pay Per Sale approach.  We are also confirming that we don’t charge dealers for consumers who use TrueCar for the first time at their dealerships.  This is called “showrooming.”  And lastly we are simplifying our bills and making it easier for dealers to get credits for sales they believe did not come from TrueCar.

Q.  Are you making any changes in your consumer-facing advertising to remove negative stereotypes of car dealers?

We have cleaned up our consumer advertising and site messaging to be more dealer friendly and focused on pricing transparency.  In the past some of our ads have harped on the negative stereotypes of car dealers and we definitely won’t be doing that going forward.  For example, we have eliminated the tagline “Never Overpay” which implies that dealers are overcharging consumers and we have eliminated all messages that talk about “Removing the Hassle” of car buying by using TrueCar.

Q. How have dealers responded to the Pledge?

Overall, the response from dealers to our Pledge has been very positive.  Dealers are telling us that we hit their main pain points in a very substantive way that shows we listened and are very serious about making TrueCar a better place for dealers to do business.