TrueCar investors, rejoice! After a roller-coaster ride fueled by dealership lawsuits, a shockingly poor second-quarter financial performance, a broken-off partnership with the nation's largest dealership group, announced plans for its CEO to step down, and the unexpected departure of its president for Google, there's finally some good news for TrueCar investors. Recently, J.D. Power released its 2015 Automotive Mobile Site Study, and TrueCar scored decisively higher than its third-party website competition. Here's a look at some of the details, and what it all means for investors going forward.
What's the study cover? J.D. Power's mobile site study evaluates both automotive manufacturers' websites and third-party automotive sites for consumer satisfaction. The study included more than 12,000 evaluations from shoppers who intended to purchase or lease a vehicle within the next two years, according to J.D. Power.
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The study closely examined four key measures of the website -- information/content, navigation, appearance, and speed -- and calculated satisfaction on a 1,000-point scale. Here's a look at the results, and some key takeaways.
Chart source: J.D. Power 2015 Automotive Mobile Site Study.
TrueCar heavily outscored its competition, with no other third-party website achieving a score higher than 750. Surprisingly, at least in my opinion, some of the industry's most well-known third-party sites scored below average: Cars.com, Kelley Blue Book, and AutoTrader.com.
An interesting takeaway for TrueCar investors to consider is that, as screen sizes continue to increase on smartphones, the online experience needs to adapt. J.D. Power found that vehicle shoppers who used phablets -- smartphones with screens 5.5 inches or larger -- were significantly more satisfied with the automotivewebsite experience overall than those who used smaller phones.
Out of the more than 12,000 consumers surveyed, 81% of those who were highly satisfied -- scores of 901 or higher -- with a given website commented that they would "definitely" recommend the site to friends and family, while a meager 3% of those who posted low satisfaction -- scores of 500 and lower -- would recommend the website to a friend.
As TrueCar's business revolves around the very bottom of the purchase funnel -- the company deals with consumers very near the point of purchasing a vehicle -- word-of-mouth and a higher satisfaction score for its mobile website is a huge win.
"TrueCar is in a unique position as our site and mobile application is designed for the millennial mind-set, which demands open, transparent, at-your-fingertip pricing data coupled with mobile accessibility," former presidentJohn Krafcik said in press release in January. "With enhancements planned for our mobile app and usage already surpassing 50 percent, we are ready to delight the influx of these auto buyers."
TrueCar's focus on improving its mobile presence and targeting millennials should prove a valuable investment, as the company predicts that millennial consumers will purchase 4.24 million cars and light trucks this year, which would generate roughly $135 billion in total revenue for the automotive industry.
It's clear from J.D. Power's survey that TrueCar's mobile presence is ahead of the competition's, and if the company can indeed target millennials as that generation's purchasing power grows, it could be just the thing to get TrueCar back on track in the near term -- definitely something worth cheering for after the young company has shed roughly 70% of its stock price in 2015.
The article Finally, a Small Victory for TrueCar, Inc. Investors After a Brutal Summer originally appeared on Fool.com.
Daniel Miller owns shares of TrueCar. The Motley Fool recommends TrueCar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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