TrueCar Thoughts from Elise Kephart
Another night of being up late...thinking about work, personal life, work...and of course this whole TrueCar debate. I'm not sure if this it's a good or bad thing that for the past two hours I have been catching up on all of the blogs, videos, phone conversations recorded etc.
Now, before I state my thoughts on this. I realize that there are a few close friends and mentors in the automotive online network here that may have a different opinion. I am the type of person however, that is open minded and have read for hours upon hours and done alot of research on everyones opinions on this the past few weeks. It seems the majority, including as mentioned close affiliates of mine, that are ready to KILL THE BEAST. It does amaze me how it started off as Jim's facebook status and now it is becoming a revolution it seems.
Here is my own PERSONAL EXPERIENCE on it. I realize several of you are GM's, owners of dealerships, trainers etc. I work on the line so to speak. I get to deal with internet customers all day, everyday.
When I first moved into the internet department, it took a little bit of learning to get away from learning a specific system. The cliche is that internet customers are all about price.
When I first got into this business and was on the line at a Ford Dealership in San Diego, I had no sales experience. I was a coffee barista before that but was motivated enough to learn the business and find what works, and what doesnt work. My first day I walked other dealerships lots as a customer and discovered quickly the stereotyped "car sales person."
When I first moved into the internet department...I was trained to make a phone call, write an email and set an appointment. This would be great if it actually worked the first time around...so what did I do? I wanted to learn. I made fake emails, and I "walked to dealerships lots" but online. I mystery shopped. Doing this I discovered what I did not like.
In doing this, I quickly discovered that most ISM's are sending out auto responders. When you spend a day mystery shopping, you discover that there is so much automation in our business that eventually it all looks THE SAME. I also found dealerships sending out quotes first time around on a car that again, would be automated. I shopped for a "Honda Civic" DX (this is the entry level with no air or radio!). Dealerships were sending me your typical automated response asking for an appointment or "when I could come in to get a really good deal", or sending me a price quote without even asking or verifying "are you looking for a DX Civic or do you like to have air conditiioning and a radio?"
Then my theory went back to my roots BE DIFFERENT! DO SOMETHING that you will be REMEMBERED FOR. STAND OUT. When I was on the front line (reflecting back to San Diego, prior to being in internet) I got all that time waiting out on the pad with the sun beaming on my face, with my uncomfortable heels, waiting for that one up. (we were on a rotation). During this time when you are waiting and waiting for the up-you go through an un explainable mental self motivating game. If you are in this business you motivate yourself enough so that when you do get that up you are ON YOUR GAME.
With the internet it is no different. I started a process: EXCEEDING (and truly exceeding) what I knew customers were not getting anywhere else. I make a phone call, send them a personal video message, write them a handwritten postcard and in doing this the customers DID CALL back, or they DID WRITE back. Why? I can't tell you how many times "Elise we really loved your video and postcard."
Now..back to the topic of truecar. This is where as a person who does like to do the creative side of things in this business like the videos and postcards...the truecar prices started to come up. There were those customers who when were not a truecar dealership-customers had a USAA price that they wanted us to match so I would offer a time for them to visit with me where they could bring in their certificate. Once the customer got there I was able to see all the dealerships who had these close to invoice or even back of invoice prices.
These customers even though we were not a truecar certified dealer at the time, would still try and give us "the shot" to match the "best price."
But at this point, the customer usually has a rapport with me via the videos and postcards Ive sent. I would sit down with their bell shart and three prices, and BEST price and do the SALES PROCESS with them.
We have all heard of an evidence manual. I have one with a biography on me, awards on the product (Honda), handwritten customer testimonials, photos of my customers and toward the back of this evidence manual I have evidence.
BUMP STICKERS. YES, a truecar dealer could have a price $700 back of invoice but this is an actual markup sticker I xeroxed when we have traded with that dealer. This dealer accessorizes their vehicles with over $1,995 of accessories. Right by that mark up sticker I have copied yelp, dealerrater, google reviews with ACTUAL customers stating that the accessories were "non negotiable."
I have several bump stickers copied, several yelp reviews and true actual facts. Now, I did speak with a truecar rep who stated that dealerships on the program are not supposed to have accessories forced upon the customer...but I know that it happens.
What else do I have in my evidence manual? Actual emails from dealerships when I mystery shop telling lies-wether it be what is available, or not giving an out the door price, or lying about having the vehicle in stock etc.
As a sales person-BRING VALUE to the table. Show them why if they really drive 169 miles out the price on the best truecar price is a loser deal and SHOW them the games and tricks that several dealerships will play.
It got to the point where we did sign up about two months ago with Truecar. It has been profitable with us.
To state some facts with my own personal experience on it: we are usually the third or second most expensive price on true car. We are never the BEST PRICE.
What is funny about this is WHY, if it is ALL about price have I been getting customers that will drive 300 miles and pass the other two better priced TRUE CAR dealers to come and buy from me? My PRICE is higher. I sometimes even have to get the vehicle on a trade-so its not about inventory or having it in stock.
My real theory-is that I put value to the table. Now, yes-often times, it takes the extra mile. All the sales people at my store says sometimes I go to great lengths to just make a mini or close to a mini. For me-I get a kick out of it. MY TIME IS VALUABLE. If I make a video message, write an email, even make a call-that a moment of MY time that is being taken. If I give up because its "another truecar" customer...then Ive wasted even second with this customer.
As far as truecar pulling DMS files: I have heard Scott Painter state several statements, more recently in a phone conversation that I was listening to where he says he does not use the DMS to create that pricing.
He also says that he is not a broker, because dealers create their own pricing.
"Elise how can you sleep with the devil? "-I could be wrong, as I am not perfect-but I have been a dealership not on it, and as Grant said its there already and change is happening. Wether I use it or not, its still there. Now I realize that Honda is telling dealerships to not advertise below invoice on truecar-and I completely agree with that. Selling a Honda below invoice or advertising for below invoice is ridiculous.
I think the truecar/clearbook needs some tweeks to be done still...but it has been profitable for us, and has been a great lead source-even though as mentioned my truecar price is NEVER the lowest, or race to the bottom and as mentioned in the past two months since we have been on it-i have gotten customers drive past the other two truecar dealerships to pay MORE for the SAME car but buy it from me.
CREATE AN EXPERIENCE that has no pricetag. I don't see truecar going away, and if it does-there will always be another company right behind it.
Its late....and I know this has been such a big debate online and wanted to put in my 2 cents.
-Elise
Feel free to leave comments.
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Comment by Jay Prassel on January 2, 2012 at 1:37pm
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In case you haven't seen this in Auto News:
http://www.autonews.com/apps/pbcs.dll/article?AID=/20120102/RETAIL0...
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Comment by Tom Drommond on December 30, 2011 at 5:18pm
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Mike - You got me all excited about only two TrueCar Dealers in the OKC market. Because our metro area is spead out, I don't think the zip code you used gave you an accurate count. It's actually 4 TrueCar dealers that I really compete with. If you guys will keep this going here and on other blogs, they may quit. Hope springs eternal.
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Comment by Mike Warwick on December 30, 2011 at 4:57pm
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Charles, we were all impressed with how Tom's store pays it's sales people. Just out of curiousity, if dealership's adopt a more consultative approach to selling cars and move away from the "high pressure, high commission" sales tactics outlined by Mr. Painter, what do you think a salesperson should be paid? What do you see as the average salary for a consultative salesperson? I'm not asking you what Truecar thinks they should be paid but just you personally.
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Comment by Brian Willian on December 30, 2011 at 4:56pm
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Charles, how is TrueCar marketing to people who aren't already in the market? Why would anyone who isn't currently in the market for a car visit your site? You must agree that if a store has a long history of great service and sales and is the number 1 store in the market, then there is a very, very good chance customers would shop that store regardless of TrueCar if they were in the market, right? That being said, how is adding the $299 or $399 your company charges to sell a customer that was going to shop you anyway not an additional cost? There is no reason to pay TrueCar to sell customers you would in a likelihood already have and had at better gross I might add! Finally, you prove my point. If you know how to build and sell value and offer great service in a professional manner, you don't need TrueCar as it is only a pricing service. If your speciality is price-whoring because you have no selling skills and price is all you have, then TrueCar is right up your alley. If your company is truly a pay for performance company then don't charge a fee on net loser deals. You already have the data to determine if one of your sales is a net loser. Is that workable?
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Comment by David T. Gould on December 30, 2011 at 4:49pm
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Charles, I really am trying to keep a reasonably open mind of your point of view. (even though I don't agree) To me, you are the most direct "voice" of TrueCar in this platform. I took your prior statements of experience and industry understanding as probable and your challenges to other automotive vendors as credible. Your statements below reveal your understanding of the auto industry. Unfortunate.
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Comment by Keith Shetterly on December 30, 2011 at 4:43pm -
Affiliate sales are arguably incremental sales; re-alignment of the entire market to a new shopping channel is NOT incremental sales. No matter now many times you say otherwise, Charles, it just isn't. Incremental sales are those sales that happen in addition to the sales a business would have. Time will show one of two outcomes: TrueCar will not be very successful, and the sales from it will continue to appear as incremental; TrueCar will be very successful, and participating dealers will notice that more and more of their sales come at a $300 cost from your marketing. Essentially, that's INCREMENTAL sales for TRUECAR, but not for the dealer. For the dealer, it's what Painter has said himself, it's just shoppers looking for a different experience. I'm glad Tom is one of your top dealers now; he's clearly very sharp on his business. I'll be very interested to see how someone at his level feels a year from now.
Regardless, you can't change the definition of incremental sales. What you're really doing is not offering MORE sales; you left that impression behind more or less when you retired the Zag plan. What you're really doing is converting customers to TrueCar. 2012 will be a recovery year, if we're lucky. If a dealer sells anything through TrueCar that looks like significant incremental business, the increment will be due to the economy, not TrueCar.
It's a new shopping experience! Your boss says so; it's essentially how he has positioned TrueCar during the funding rounds--not as incremental business at all. You're the new mall taking shoppers from the old mall; you're NOT growing shoppers in any real direction.
If we're all lucky, the economy will grow us some shoppers. Those who know better will realize THAT is where new business came from in 2012.
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Mike - the reason there's only two at this time is that 3 or 4 bailed out after reading all the blog posts nd videos about how evil TrueCar is. Either way is fine by me. Keep stirring the pot, maybe the other guy will give up and quit, too. You hit the nail on the head. As long as it's working, I don't need to break it. If it stops working or works against us, we'll walk away, too.
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Brian - Most of the TrueCar customers I talk to asked for mulitple quotes on several makes and models. Silverado vs. Sierra vs. Tundra is a common match up. There's three possible answers and two of them are bad for me. It is a conquest/retention game regardless of brand. These are shoppers that have crossed the line from value focus to price focus, they no longer trust or beleive what a dealership says. They've gone to what they think are independent 3rd parties for more information. Whether it's TrueCar, Dealix, Edmunds, KBB, BelowInvoice.com, etc. They are reaching out for a second or third opinion, or validation for what they've come to believe about the value of a car. They are often that defensive customer we deal with once and a while on the showroom floor. The know it all, swears he's been screwed on every deal he's ever made and hates dealers guts. Any transaction with him is a grind. I don't care what source he came from. If TrueCar can get through all that, assure him that this will be different and get him to let his guard down, I'd pay for that service and do. The lion's share of our customers are not going to TrueCar. They research online, but rare take the bait on "find out what the dealer doesn't want you to know" offers and pop-ups. They are picking out a car and a dealer. Will price be a factor, you darned tooten it will. But, what these folks are looking for is a dealer that looks approachable and willing to negotiate. They aren't looking to see who is $50 cheaper, they are looking for the dealer that looks like he'd let them win a little bit. These are 80-90% of the sales we all make in our internet departments and sales floors.
There will always be that 10% that thinks every deal is a bad deal. You can probably think of a dozen examples of customers that didn't want to be bothered with the truth, they believed it and that makes it so. We'll never get that guy on our side, he'll always be a grind. It's not fair to judge all customers based on him. If we did, we'd all find a new line of work. Not every customer is a joy to work with. So far, after 12 months on TrueCar, the TrueCar customers at our store have been easy to help, left a little meat on the bone, gave us a perfect survey and are very happy. Maybe it's our process, maybe it's our people or maybe we've just been lucky. So far, I'm happy with TrueCar.
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Tom, I guess I don't understand how TrueCar helps you with regard to conquest sales since in the TrueCar environment you are competing against other Buick and GM dealers and not other brands and that competition with other GM dealers in the TrueCar environment is based on price alone. For the record, I am against TrueCar as I think they are trying to turn a buck off the capital and sweat of the dealer without having any real skin in the game. Having said that, you are number one and have been for 15 years. You and your team are top-notch with regard to product knowledge and customer service. TrueCar doesn't address either one of those. In fact, TrueCar only appeals to a portion of the roughly 2% of the population that is already in the market to buy. As the number one dealer with a great reputation, the odds are overwhelming they would have shopped you regardless of TrueCar. If you really want to be number one in the nation, find a message and a way to communicate it that reaches and resonates with that 98% of the population that isn't in the market and get them in your doors. I humbly submit that would yield much greater results than the money you are spending with TrueCar with the great people and processes you have in place.
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@ David Gould - I've been working on an email to send and sent a friends request to you so I can. I really don't want to map this out for the whole world, including anyone in my area that follows DealerElite or ADM,
@ Brian - getting to #1 is easier than staying there for 15 years straight. Opening the door to our competitors with these customers is a huge risk for us. You assert we'd probably sell them anyhow and I beg to differ. Customers are fickle. I'm not worried that they'll buy a Buick or GMC from my competitor. I'm worried that they'll buy another brand because they don't feel like they got their money's worth with a Buick or GMC. Selling price will not address this. Selling the car, making sure they know how to use everything on it and helping them keep in top condition, does. If I sell them the car, one thing is for sure. My competition didn't. If I walk away from these customers, who will pick them up? Someone will and we both know that's true. I'm not looking for the "Big Box" experience, I'm looking to beat Beck and Masten for the #1 BG store in the country. I don't want to ever miss a chance to say "Yes" to a car deal. I've never heard a GM or owner say he wanted to be #2 or only sell "X" amount of cars. Fifteen years and it's always been more, more, more. If more is better, more the better.
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