The Scrumgineer

Time is money – and one of the most significant ways for dealers to waste both is chasing bad leads. Typically, the biggest problem for dealers isn’t getting enough leads, but rather, how to correctly manage the many they do have and how to distinguish the good leads from the bad ones.

Source: Cox Automotive

Dealers know the frustration: 100 leads come in, but only a fraction are truly ready to buy.

TrueCar just solved that problem. We recently launched a new feature that uses cutting edge AI and Machine Learning to actually predict which leads are most likely to convert into a sale. We call them Motivated Buyers, and they are ready to close a deal right now.

Impressive numbers, but it gets even crazier. Those numbers represent our entire network and include dealers for whom we don’t have complete sales matching data, so that skews the numbers. These numbers also don’t include people who bought a car at a dealership other than the one they submitted the primary lead to.

So let’s simplify it and ask: what percentage of consumers we identified as Motivated Buyers actually purchased a car from any TrueCar dealer within 30 days of submitting their lead? The answer is around 25%! Most marketplaces would dream of a 25% close rate. Some of our most successful dealers actually have Motivated Buyer close rates over 50%.

I’m a firm believer that this sort of AI-driven lead conversion prediction is the future for all lead generation sites, not just automotive marketplaces. If Zillow and Nerdwallet are not doing this already, they should be.

How does it work?

One thing TrueCar has a lot of is data: consumer browsing data, market data, and most importantly, sales data. This is what allows TrueCar to do this lead prediction when our competitors can’t. We have a robust sales matching pipeline to know which cars actually sell. We can then correlate sales to specific consumer actions. We currently measure 40+ consumer actions against sales data to train our AI prediction engine.

The predictions are already accurate and continue to improve every day. As consumers use our site and buy cars, our AI continues to learn and identify patterns that indicate a consumer is ready to buy. We are also continually examining additional data points to feed into our engine. The result is a prediction engine that gets sharper with every lead, giving dealers more confidence that the buyers flagged as “motivated” really are ready to purchase.

How does this help dealers?

Better close rates – When you know which leads are the closest to closing, you can prioritize and focus your efforts. Engage with your motivated buyers first and then circle back to the lower-intent leads. Multiple studies have shown that contacting a lead within the first 5 minutes increases the likelihood of conversion by anywhere from 3 to 100 times. A 3x increase on a lead with a 1% chance of closing is still only 3%. Stacking that multiplier on top of an already high-intent lead is where the real lift happens.

Lower cost per acquisition – Motivated Buyers buy sooner and are usually more informed. This means your salespeople can spend less time educating and more time selling. Dealers can then reallocate this saved time toward follow-ups, setting appointments, and closing sales, enabling them to accomplish more with the same workforce.

Improved morale – Low-quality leads aren’t just a drain on time; they also wear down your team. By focusing on Motivated Buyers first, salespeople stack wins early, stay energized, and are better equipped to handle the tougher, lower-intent leads.

What’s next?

Motivated Buyers are only the beginning. My goal is to redefine how we classify leads and make TrueCar leads the highest closing leads in the industry. We are working closely with dealers to understand how we can take the mountains of consumer and market data we have and distill that down into Actionable Insights for dealers.

Motivated Buyers are already live in your TrueCar dashboard and CRM. If you haven’t seen them yet, ask your rep. You can also ask about our other feature called Actionable Insights that provides personalized, data-driven recommendations to help you focus on high-impact changes you can make right now.

_{Disclaimer: The views expressed here are my own and do not represent official statements from TrueCar. Any numbers, statistics, or claims mentioned in this post are based on my interpretation of available data and may not have been validated by TrueCar’s analytics or legal teams.}