Key Tactics to Compete and Win in Today’s Transparent Marketplace

Kerri Wise – VP, Dealer Marketing @kkwise11

Source: Forbes.com article “The New World Of The 'Empowered Consumer” July 16, 2015

Mobile

Hands On

Smart Committed

Global The Empowered Consumer

Today’s Car Buyer has Mixed Emotions about the Car Buying Process

Car Buyer Pain Points Convenience Transparency Validation

“I did my research before going to the dealership, but I ended up buying a different car. I think I paid too much –

the dealer didn’t show me any information to prove the

price was good.”

“I wish I knew how much the dealer was making on the

car. Then, I could give them a fair commission but still get

a good price. Not knowing makes me trust them less.”

“I didn’t like the handoff. I had to give them the same information over and over again, like I was starting

over.”

“I really don’t like the waiting. I don’t like the way

they put me off.”

Customization

“I didn’t like the way they tried to push me into a car I

didn’t want.”

“I felt like I was on a conveyer process. The

whole process was about them, not me.”

“They kept bringing up

things I didn’t care about.”

“There was no financial explanation at all, and it seemed like my payment came from some mystery

algorithm, because they did the math in the other room.”

“Unless you ask all the

questions, they don’t tell you what you should know.”

“I would have trusted the

dealer more if they had given me a roadmap or menu

showing all aspects of the deal.”

Source: TrueCar Research

How much profit do car buyers think you make?

21%

14%

3%

Consumers think you Make

They are willing to pay

Actual Dealer Profit

Consumer Perception of Dealer Profit

Perception vs. Reality

Source: 2015 Strategic Vision NVES W1-W3

Right Vehicle

Right Dealer

Right Price/Deal

Vehicle Info, Photos, Reviews

Ratings/Reviews, Inventory, Salespeople Profiles

Vehicle Pricing, Mkt Supply, 3rd Party Benchmarks, Dealer Offers,

Calculators

Right Vehicle Right Dealer Right Price/Deal

Car Shoppers use Online Research to Inform and Validate their Decisions

Vehicle  Info,  Photos,  Reviews  

Ra4ngs/Reviews,  Inventory,  Salespeople  Profiles  

Vehicle  Pricing,  Mkt  Supply,  3rd  Party  Benchmarks,  Dealer  Offers,  Calculators  

Right  Vehicle   Right  Dealer   Right  Price/Deal  

ONLINE  

Product  Knowledge/  Consulta4on  

Efficient  and  Streamlined  Process  

Transparency,                          Price  valida4on,  Value  

OFFLINE  

Top Dealers build off the online experience, to deliver a Superior in-store experience

… and as a result Experience Higher Close Rates

2x Higher Close Rates

than the Competition

Streamlined Process

Pricing Strategy

Validation Value

Source: Top Performing Dealer Study

Key Differentiators of Top Dealers

Streamlined Process

2.5X Faster response than the

competition

Top Performing 20 mins

Competitors 52 mins

1st Custom Response Time

Top dealers respond significantly faster to leads than their competition, setting the stage for a streamlined process.

Source: Mystery Shops

Expedite the Process

Source: Mystery Shops

79% send a Custom Email vs. 66%

of the Competition

Top dealers are more likely to personalize their lead responses, sending customized emails and using more personal contact methods, such as a phone call, text and video.

Personalize Lead Response

Leverage Trusted Consumer Affiliations Top Dealers acknowledge the consumer’s online journey and leverage their affiliations to trusted sources

Source: Mystery Shops

robert@email.com (555)500-5000 120 Broadway St. Santa Monica, CA 90401

Robert Smith

Example Call:

“Hi Major Smith. This is Travis Pennington, the USAA

representative here at Hometown Nissan. I want to thank you for

choosing the 2015 Nissan Rogue through the USAA car buying

program. It looks like we have one in Tan and White like you

selected…”

67% of TrueCar prospects buy a different vehicle (make/model/trim) than they originally configured.

Source: Website Metrics

Vehicle Choice

What % of Internet leads switch to a different make or trim?

Same  Make,  Model  and  Trim  

33%  

[CATEGORY  NAME]  [VALUE]  

Same  Make  only  

10%  

Different  make  13%  

NEW  Vehicle  Purchased  by    TrueCar  Prospects  

Top  dealers  keep  the  purchase  process  moving  by  proac4vely  sending  custom  price  offers  on  alterna4ve  vehicles.  

Source: Dealer Performance Data

Suggest Alternatives

Close rate increases by

32% when a consumer receives a price

offer on a specific vehicle

Pricing Strategy

Source: Dealer Interview

Embrace Transparency

73% Of Top Dealers will give a price

quote over the phone

“Our process is designed to engage & include the customer in every step of the process.

Transparency is our culture & the tools we use in the sales process support transparency.”

- Honda Dealer (Salt Lake City)

“We have to be because of this day and age.” - Chevrolet Dealer (Denver)

Top dealers avoid a “set it and forget it” pricing strategy, frequently evaluating their pricing strategy against the market.

Source: Dealer Performance Data and Website Metrics

Offer Market Based Pricing

ü  Evaluate Pricing 1.5x More Often Than Average

ü  Pricing is typically in-line with other Dealers

Source: Dealer Interviews

Offer Market Based Pricing

“Until recently our pricing strategy has been lowest price for new cars. However, we recently changed that strategy and have been focused

more on the TrueCar “curve” – fair market pricing. The results have been far better gross

and volume has not yet been affected.”

- Nissan Dealer (Los Angeles)

Validation

Source: Dealer Interviews

Validate the Vehicle

“Credibility is one thing that separates my dealer from

others and the condition report just goes deeper into creating a credible experience for me as an independent dealer.”

- Independent Dealer (Indiana)

Used Vehicle Shoppers that see a 3rd Party Price Rating on a vehicle are 24% more likely to submit a lead to a dealer

Source: Website Metrics

Validate the Price

5.2%

5.6%

4.3%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

Great Good No Price Rating

Price Rating

Lead Conversion

Top Dealers use 3rd party benchmarks to help validate the competitiveness of their price.

Source: Dealer Interviews

Validate the Price

Value

Source: Study referenced in book titled “Absolute Value”

Which camera would you buy?

$170 $240 $470

People and Process

Showcase Value

John Wilson Subaru Product Specialist

Showcase Value

Ownership Benefits

Showcase Value

Why Buy Messaging

Showcase Value

I understand that our dealership may seem far away but here are a few reasons why people make the trip out to us:

1. You will be dealing directly with either our General Manager or

Sales Manager who WON'T keep going back and forth with numbers.

2. Our TAX RATE is lower

3. We do not have ADVERTISING FEES on our INVOICES as Clark Country dealerships do (ranging between $500-$1,000 depending on

vehicle.)

4. We WILL NOT do the bait-and-switch on you; the vehicle we do the numbers on will be the same vehicle when you get to us (our

TRUECAR PROMISE).

5. If we cannot come to an agreement we will fill your vehicle up to $50 for taking the time to see us.

6. When you do purchase from us we will send you and a friend to THE WINERY for either lunch or dinner on us.

7. “Buyers Bonus” benefits including Auto Repair and Deductible Reimbursement

Benefits of Driving a Long Distance

Showcase Value

Profit Share Program

Showcase Value

Charitable Efforts

Questions? kwise@truecar.com @kkwise11