TrueCar Expands Lead Generation Network By Partnering With AllState

It looks like everyone wants to be in the automotive lead generation business. Over the last year I have been writing about Google Cars; a program (in beta testing) to present new car inventory to consumers shopping for a car directly in Google search results. Dealers are charged by Google on a per lead basis.

Today, I learned that TRUECar has expanded its lead generation network with a partnership with Allstate. Industry blogger Jeff Collins shared the new Allstate lead-gen website on Facebook (shown below) and I was inspired to write about this development.

TRUECar already has a number of powerful business deals that generate high quality leads for car dealers. TRUECar partners include USAA, Consumer Reports, American Express, SunTrust Bank, and AAA. TRUECar has reinvented itself after a well publicized series of stumbles last year. It seems that they have perfected their business model to comply with state regulators. The dealers who have returned on their program have told me that they are finding success with their leads and are still making decent margins.

The addition of Allstate shows just how strong the TRUECar business model has become. It is attracting Fortune 500 companies that are looking to monetize their customer base and add value to their members. For Allstate, the benefits of this partnership go beyond a revenue sharing opportunity since they sell car insurance. If you can think of other companies that have a significant customer base, you can bet that TRUECar is pursuing that business.

The TRUECar juggernaut is once again accelerating. Scott Painter has done an amazing job of turning a PR nightmare into a flourishing business once again. Despite the turnaround, some dealers are still fearful that syndication models, like those operated by TRUECar, are bad for dealers because their own sales and DMS data can be used against them.

Do You Have An Inventory Syndication Strategy?

Many dealers are sharing their inventory to a number of the five Super Syndicators: Cars.com, Autotrader.com, KBB.com, Edmunds.com, and TRUECar. Dealers are also using smaller syndicators like EveryCarListed.com, CarGurus.com, and CarSoup.com. Some dealers are finding great success in pushing inventory to Craigslist or participating in a controlled marketplace offered by CarWoo! The choices don't stop there!

Recently serial entrepreneur Sean Wolfington brought to market http://www.Autoamigo.com in partnership with UniVision. The program claims to be the automotive industry’s first national U.S. bilingual car buying program for Hispanics. (See Press Release) Dealers wanting to reach the enormous Hispanic population now have another syndication partner to consider; Univision is the 1000 lb Gorilla in Hispanic media.

Successful dealers need to have a digital strategy that includes how they present their vehicles on their website as well as on their syndication partner website. It can not be a set it and forget it strategy! With so many choices now, dealers must take the time to calculate the ROI from each syndication partner. Dealers need to understand the specific value proposition from each syndication opportunity and be able to measure the impact on their sales.

Dealers who are reading this article must make it a priority to understand how to do an ROI calculation for their syndication partners.

Just how many more syndication contracts can a dealer afford to sign? Does there come a point where duplicate leads start to lessen the financial benefit of these services? Should dealers just sign up for every syndication opportunity?

From my conversations with dealers, the marketplace is becoming very crowded. Each of the Super Syndicators are claiming that their site produces the best ROI.

Paying For Duplicate Leads

With all the syndication choices presented to dealers, is anyone concern about overlap and duplicate leads? TrueCar will credit dealers for a lead if they can show that the consumer recent came into their CRM system from another source. Other syndication services are not that friendly.For example, at this time the Google Cars program does not issue credit for leads they send dealers that also came into their CRM previously.

In addition to syndication, lead generation services from Dealix, AutoUsa, and AutoByTel are an important part of Internet sales each month. Mix syndication and third party lead generation together, and you can see how easy it can be for dealers to get overwhelmed.

There is no simple answer to which mix of syndication partners and third party lead sources creates the best ROI; it varies by market. Despite the challenges, dealers need to get the mix right.

The Commoditization of Inventory

Is the TRUECar announcement with Allstate groundbreaking? No. Will it enhance the program currently offered to dealers with more leads? Yes.

However with more websites popping up every month claiming to get cars at a better price and providing a "better" shopping experience, the dealer's physical inventory is becoming commoditized. Inventory in Google search results, inventory on partner websites, inventory for ethnic groups, and the list goes on.

This trend is a wakeup call for dealers to make sure that they have a differentiated brand in their local market. Dealers need to be the local automotive expert in town that consumers trust. Brands that are only about price or payments will be lost in the sea of inventory syndication. It speaks to having a dealership website that clearly communicates the values, ethics, and experience of the dealership. Think video!

It is clear that the lead generation marketplace is getting crowded, but when a consumer is connected with your dealership through a third-party, that first experience better be a great one. Not a good one.

This goes back to some very "old" but timely advice. Dealers need to make sure their phone processes are perfect. With so many choices being presented to consumers online, if you blow the phone call, you may be easily taken off the shopping list.

Your Homework

Take the time to do the ROI calculations for each of your current syndication partners.
Test new syndication strategies with an open mind, they may very well add significant value.
Don't ignore the importance of creating a powerful local brand in a world of commoditized inventory.
Get your phone and lead handling processes perfected; consumers have more choices then ever.
Investigate the lead overlaps that are happening and understand the lead return policies of your partners.

I look forward to continuing this discussion at the upcoming Automotive Boot Camp (May 14-16th) where workshops will be focused on advertising, marketing, lead handling, branding, and calculating the ROI of syndication partners. This hands-on event will assist dealers in making a clear and profitable business strategy that adapts to our current business environment which by the way, seems to change monthly!

Brian Pasch, CEO

PCG Consulting

732.672.2356

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Comment by Jason Mickelson on March 13, 2013 at 11:28pm: Great read Brian. This topic is near and dear to my heart as someone who responds to email leads for a living. You mentioned paying for duplicate leads which is very relevant today. In addition, be leary of paying more for 3rd party leads. If you are a GM dealer receiving 3rd party new car leads, you are paying for the same lead that 5 other dealers are buying. Here is what readers may not know, if you are paying a 3rd party company (Brian mentioned one in particular who does this) you are paying a higher rate for a lead that you may have received from the OEM anyway. To make this worse, that lead which you believed to be exclusive is often still sold to other dealers by a different source, namely GM. To make this more clear, you may not receive a duplicate lead. Very few leads coming in from a 3rd party in my system are duplicates. However, they will come in as one source in one system and OEM 3rd party at another dealership.

This isn't breaking any agreements with the dealership, but I believe dealerships should know that exclusive 3rd party leads probably do not exist. Bring your "A"-game on all 3rd party new car leads if you want to sell any.

Comment by Big Tom LaPointe on March 13, 2013 at 4:50pm: Well said Brian! It's like the insurance ads with great promises... I figure if I switch companies 4 or 5 times they will pay me to ensure.

Comment by Bruce Polkes on March 12, 2013 at 7:21pm: Excellent piece Brian. I think the core of your article is not just about this one product, but about how the whole landscape is changing. Dealers need to relook at their position and reputation in their local and extended markets. As inventory is no longer differentiated, the dealership experience again becomes the real differentiator. Your point #3 "Don't ignore the importance of creating a powerful local brand in a world of commoditized inventory" says it all. As more dealers are evolving their sales process, for example introducing ipads into the sale, this tells the customer something is different. It provides hope that a better experience is at hand. With all the online evolution, the in-store experience at many dealerships is still stagnant. We continue to see that IntellaCar customers who embrace the new vision and provide a more credible, enjoyable, efficient process by leveraging ipads are reaping the rewards. They create an experience that is worth telling all their friends and online reviews about. Now that creates a powerful brand, regardless of the syndicated inventory!

Comment by Jeff Collins on March 12, 2013 at 4:36pm: Great job Brian! Again, thank you for the mention. At the end of the day it's up to the dealer to finalize the transaction. Love or hate TrueCar it's up to you as a dealer to either take advantage of what shpuld be deemed as a opportunity. Or simply continue to push back.