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.
Comment
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Comment by Tom Drommond on December 29, 2011 at 3:22pm
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@Joe - You asked what's the motivation is for the salesman to get a bump. Did I mention we have the best pay plan on the planet or that our salesmen are some of the best paid in our region? Working here is an earned position. We don't hire knuckleheads or weak sisters that can't follow the process. We don't abide salesmen that won't get a bump or can't keep a straight face in a close. We don't accept anything less than the best, otherwise, go work for 25% and $100 minis down the street. We have a bird's nest on the ground. We appreciate our owner and his faith in us. If any salesman here doesn't, they know where the gate is. We do have a parade of salesmen beating a path to our door. We don't have to hire anyone we don't think will work
Most of the arguments I've heard about TrueCar are predicated on the salesman not doing his job in selling the value of buying here. They assume that the salesman is lazy, spiteful, looking for the easy way out, poorly trained, and more. With those assumptions, you are right, salesmen are too weak to overcome the TrueCar program or any other objection they encounter. Replace all those worn-out old stereotypes with a high quality, well-trained professional and see who wins. Cutting the price is no substitute for skillful selling. If TrueCar has forced this issue to the top, great job TrueCar. If we hire poorly, train poorly and manage poorly, getting rid of TrueCar is just removing the symptoms of a much larger problem.
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Comment by Tom Gorham on December 29, 2011 at 3:03pm
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@Tom Drommond - It looks like you found a winning formula for success, and in the end, that's the reason we are in this business... or any other business.
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@ Mike - 5 BG stores in the Metro Oklahoma City Market.
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Comment by Mike Warwick on December 29, 2011 at 12:53pm
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Just curious Tom, how many GMC dealers are there within 20 miles of you?
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Comment by Joe Clementi on December 29, 2011 at 12:40pm
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@Tom - Okay fair enough. Holding gross is a function of managment AND the salesperson's ability to sell the product. If a price bump is required, what's the motivation to get it? Just curious if the average gross profit has fallen since the implementation of this new pay-plan? If not, then it appears you are onto something. I'd like to know more.
With regards to True Car "forcing" you to sell a product. Your way off on that! The pricing strategy they use is eroding the profits, your brand value and the value of the franchises around you. I wouldn't take much pride in being a top dealer for a service that has intention and method to destroy the very job you perform. When the pendulum swings back towards your market and your dealership, it won't be as favorable? Maybe you should re-read my post...
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@Mike - I don't want to put the details out here, but I'd be glad to share in private. We ran 20% net-gross in new cars and 31% in used this year.
@Joe - since when is "holding gross" a saleman's job? A salesman's job is to build value and justify the price. It's a manager's job to hold gross. I've never seen a buyer's order signed by a salesman. Every one that I've seen had a manager's signature at the bottom. It's my job to desk deals and hold gross. My GM does not hold the salesman accountable for my job. I always have the option of saying "No Thank You" to a customer's offer. TrueCar can't force me to sell. If TrueCar has a problem with our process, they will contact us and tell us. Our TrueCar rep is very pleased with our results. So far, after a year, we've been one of ZAG/TrueCar's best dealers and haven't received any complaints from customers or TrueCar.
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@Tom
I applaud you on coming up with a creative and ingenious pay-plan. It certainly changed the compensation structure that is outdated and overdue. While the pay-plan is unique, it’s fair to say it has some flaws; doesn’t it? My curiosity is this;
If you pay a flat commission what is the incentive for your salespeople to hold onto gross? Is gross secondary in the selling of your product? If you price a vehicle well-below the market (as TrueCar suggests) why do you pay a salesperson at all? I mean, are they really selling anything at that point? Or, is the pricing philosophy simply eroding profits and reducing the value of the products you are offering? In fact, why pay a service? Why not just price every car on your inventory online at prices thousands below the market?
You opine about “whining and complaining” and miss the larger dispute. Your vendor is encouraging the depletion of market’s, the deletion of salespeople and the commoditization of products. Grant and other “experts” like to demonstrate their erudition on this topic. However, the only “control” we are seeking is the eventual abolishment of programs that are designed, at their core; to eliminate our franchise rights. We are not opposed to transparency or even to the idea of transforming our negotiating processes. Our views are in contrast to those who refuse to see the diminution of our franchise agreements. Perhaps, you should reverse the ostrich approach on this topic and pull your head out of the sand. While you’re getting compensated (quite well) to take orders, the rest of us are quite contentious about preserving our business.
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Tom, great pay plan - congratulations to your owner! $400 to the employee and $299 to Truecar, sounds like everyone is happy and making money. I've seen a lot of monthly statements in my day and I've never seen one where those numbers work. If that were the standard for our industry, we would need crown control police in our HR departments. Your owner should be holding seminars at NADA University to show other owners how to make the numbers work.
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@David - I'd feel different about this discussion if we weren't tracking back over the same ground every day. I got the message a week ago. TrueCar sucks, you're gonna get in trouble, Scott Painter is the Anti-Christ, you're gonna starve us all out, you're dealing with crooks, you don't need those deals, etc. I'm smellin' what you're a steppin' in.
@Orest - you nailed it. Treat your staff like gold and they will do the same with their customers. It's powerful for a salesman to look a customer in the eye and tell them that he isn't paid on commision. All the matters is that they buy from us.
@Stan - Move to Norman, OK and we'll treat you like the gold you are. Pay professional wages, expect professional results and run a professional orginization. The formula never changes. Our industry hasn't changed the way salespeople are paid since before window stickers were required. Where 25% and $100 minis came from in the first place is a mystery to everyone currently managing a dealership. We just keep making new copies of the old pay plan. Maybe in back "in the day" that was a great pay plan. Today, it drives the best out of our industry, leaving only the order takers and ribbon clerks on the sales floor. Managers complain daily about not having a quality sales staff. Not be able to get them to train or work or follow-up. It's no wonder. Pay them like a waitress, and that's what you'll get. Waiters and Waitresses taking orders. Our pay plan is posted on our website if anyone would like to have a look or incorporate it at your store. http://www.fergusonchallenge.com/Employment
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Comment by David T. Gould on December 29, 2011 at 10:58am
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@ Tom... don't mind us "silly people with nothing better to do than sit for hours" that do not have your one of a kind pay plan and care about the future of car dealerships (car dealers). TrueCar's business plan is flawed and is hurting your business. Being #1 by more than double is not an accident. I doubt you needed TrueCar to make that happen... I suspect it was your professionalism and dealership sales process that made that happen. You and those who see JZ and the like as whiners are what Mr Painter is banking on. My last thought to you and others who think that TrueCar's business model is acceptable... It's time to update your financial statement entries (expenses) and insurance policies to include coverage of the state and federal impending fines and legal fees.
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