TrueCar CEO, Mike Darrow joined Jim Fitzpatrick on the CBT Stage at NADA 2020 in Las Vegas to discuss their recent rebrand, product changes, and the future of the company.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: It’s such a buzz right now in the room. Just came off of a great 2019 with dealers that sold a boatload of cars again, 17 million vehicles. It seems like the SAAR might come in a little bit under 17 million for 2020, which means they got to be very efficient in what they’re doing in their advertising and marketing spend. I know that’s something that’s near and dear to your heart. Right?
Mike Darrow: Absolutely.
Jim Fitzpatrick: Talk to us about some of the new things happening at TrueCar.
Mike Darrow: Well, the two big things that we’re working on, Jim, is first of all, we’ve completely rebranded our site. We’ve gotten a little bit stale with our brand in the past. We needed a refresh. And there was a sameness across our industry, we call it the auto blues. Everybody’s emblem’s blue.
Jim Fitzpatrick: Including CBT’s.
Mike Darrow: That’s right. So we went to a much more colorful logo.
Jim Fitzpatrick: Yes. It looks great.
Mike Darrow: And it’s more progressive, more interesting, I think. It catches the attention and we really used it in our ads to differentiate ourselves. So it’s very well branded. And we didn’t want to launch that until we had a product that lived up to it. So we launched it all new product experience on January, followed it up with the new brand campaign and we’re excited. We’re off to a good start.
Jim Fitzpatrick: That’s fantastic. That’s fantastic. So was that really the impetus behind changing the brand, just to kind of refresh it? Was there anything deeper than that or did you want to make a new statement with dealers and consumers?
Mike Darrow: It was clear to us, we had gotten stale and we were kind of narrow in the segment of consumers we were helping. We were a very price conscious site. That’s still our foundation, transparency and pricing. But we know with the way modern day shoppers are buying, there’s other things that are important. It’s got to be simple. It’s got to be convenient. It’s got to be easy. And we’re opening up the funnel for that and trying to drag more of those consumers into our site. So we’re excited.
Jim Fitzpatrick: In anticipation of today’s interview with you, when I told a good dealer friend of mine who owns 20 some stores in the Northeast and I said, “Hey, I’m going to be interviewing the CEO of TrueCar.” And I knew that he was not an advocate early on of TrueCar. So I said, “What do you think about that?” He goes, “Well, you want to know the truth. I love TrueCar. They do a phenomenal job for us.” He goes, “Early on, I was not a huge proponent, as you know, Jim.” He says, “But today, great company, does great work for us. And I wouldn’t spend a day without them.”
Mike Darrow: That’s always great to hear. And we work hard to create balance to the marketplace. We know we have to focus on consumer experience first, but we know we have to balance the value we provide to our dealer partners. And early on, we were perceived as that disruptor. We were going to disrupt the market. And now we’re just… We’re about making quality connections, consumers with our dealer network and we’re seeing good results from that.
Jim Fitzpatrick: That’s right. That’s right. And the consumer wants, they demand that, that that’s a seamless process and one that they can count on in a partner like TrueCar. That says, “Hey, we’re ready to make the transaction. We don’t want to pay top dollar. We don’t want to pay bottom dollar. We know that.” Consumers, for the most part, want to pay a fair dollar. Would you say that that’s the case?
Mike Darrow: Yeah. And much of our pricing data is around fairness. We show consumers what other consumers have paid for a car, that similar car, in their market. We’re not always pushing for the lowest price. We want them to feel comfortable they’re paying a fair price on a real car. So we help them find a piece of inventory and then we want to connect them with one of our dealers who will execute the transaction. So, we’re excited we’re going to add trade in to that with guaranteed value for consumers.
Jim Fitzpatrick: Yeah, that’s huge. Talk to us about that. How does that work? What’s the deal there?
Mike Darrow: So, we built a trade in tool where a consumer can self evaluate their car, put some data in. It starts either with their VIN or their license plate. They give us some general facts about the car and then we give them a guaranteed value for that vehicle. And we support it underneath our dealer network. So if they go to one of our dealers to trade it and the dealer doesn’t want the car, we ended up taking it. So it’s guaranteed for the consumer. The dealers love it because it puts that third party validation on the value. It’s not the consumer questioning their value. It’s TrueCar’s value. And that dealer can explain it and it’s been good for us.
Jim Fitzpatrick: And then, of course if the consumer comes in with that guaranteed offer, the dealer can always buy that trade in.
Mike Darrow: That’s right. We’d prefer it.
Jim Fitzpatrick: Yeah. Right. Yeah. And how long have you been running that?
Mike Darrow: We’ve had it on our site for about six months. We just recently integrated it into our core buying channel. We know about 50% or 60% of people who buy a new or used car have a trade. So we want to help those folks with, when they get to the store, they have information about the value of their used car. Saves them time. It makes the discussions with the dealer much less friction in that.
Jim Fitzpatrick: Yeah, that’s right. That’s right. So where does TrueCar go from here?
Mike Darrow: The next thing we really want to move to is we bought a company called Dealer Science. And they create what we call penny perfect payments. So they’ll take a piece of our inventory, they’ll take the transaction price.
Jim Fitzpatrick: That’s a huge differentiator.
Mike Darrow: That’s exactly right. About 80% of folks buy based on affordability, which is monthly payments. So we’re going to take our transaction price, turn that into a payment, let them shop by payment for vehicles. So that’s the next stage for us.
Jim Fitzpatrick: Okay. So when you say penny perfect, you’re actually going to say, here’s what this car payment should be when you go into the dealership.
Mike Darrow: That’s right.
Jim Fitzpatrick: It makes it pretty easy for the desk manager to work the deal accordingly.
Mike Darrow: Well, and the way we have it set up, the dealer will be providing the information to us. So it’ll be seamless once we deliver the consumer there, they’ll have a value for their used car. They’ll have the price they can buy the new vehicle for. All they need to do is the paperwork.
Jim Fitzpatrick: It sounds like digital retailing starts at TrueCar instead of at the dealership’s website.
Mike Darrow: Yeah, we’ve been trying to find our spot in digital retailing and because of our audience, we think we can be a leader in that space. And we’re excited that… We want to create it. Not all consumers are ready to go the whole way to buying the car online yet. So we’ll service whatever needs they have, whatever piece of information they need. And then we’ll move them into one of our dealerships. So we’re excited.
Jim Fitzpatrick: That’s fantastic. And we hear so much about digital retailing from dealers now and they’re preparing for it. Do you think in 10 years, if we were sitting here 10 years from now, that the majority of vehicles would be sold via the internet and the customer had never been visited or visited a dealership?
Mike Darrow: I do. I think the window may even be tighter than 10 years. You look at the new generation of buyers that are coming into the marketplace, they’ve consumed almost every other product through a digital experience. And Amazon’s done great things. My son’s a tennis shoe fanatic and he uses Amazon. There’s four boxes of shoes there every day. He sends the ones back he doesn’t want. It’s fantastic. So I think the car business is moving there quickly.
Jim Fitzpatrick: Yeah, for sure. For sure. And TrueCar, you guys are out there, you don’t really have, as one dealer said, you don’t really have specific competition at TrueCar because there’s other third party lead providers, but they don’t make the statement that you guys make. Is that a fair assessment?
Mike Darrow: It is. And we try to differentiate ourselves. Many of our competitors talk about traffic and ads and those sorts of things. What we focus on, we’re a little lower in the funnel. And we really want to help the consumer find the right car at the right price, and then connect them to the right dealerships.
Jim Fitzpatrick: And as a dealer, would I’d rather have 500 people out there shopping or 100 stone cold buyers?
Mike Darrow: That’s right.
Jim Fitzpatrick: That’s where you guys come in, right?
Mike Darrow: That’s where we come in. Exactly.
Jim Fitzpatrick: That’s really cool. Well, Mike Darrow, CEO of TrueCar, I want to thank you so much for joining us here on CBT News. It’s always such a pleasure talking to you guys at TrueCar because you’re on the forefront of things happening in our space and we appreciate it.
Mike Darrow: Thank you.
Jim Fitzpatrick: Thank you so much.
Mike Darrow: Glad to be here.
Jim Fitzpatrick: Yeah, thanks.
Mike Darrow: Thank you.
