CarWoo Steps on the Gas Pedal

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making sure you build a great experience for the buyer,” McClung says.

By late 2011, the company felt its service was attracting such promising customers that it no longer needed to apply a charge to filter out the tire-kickers. It had also gotten better at using Web traffic data to analyze whether a visitor would make a good lead, based on factors such as whether they arrived at the site via a Google search, or an ad.

So CarWoo dropped its consumer fees and set up a freemium plan for dealers instead. Dealers can still look at incoming leads from consumers for free. But if they pay CarWoo’s subscription fee, they’re able to see the offers other dealers are making, giving them the opportunity to undercut competitors. They can also create profiles on CarWoo’s site explaining why consumers might want to do business with them. “If you get onto our subscription service as a dealer, you become much more differentiated,” McClung says.

The partnership with AOL Autos is important because it will fatten CarWoo’s pipeline and make the service even more attractive to dealers. It may also provide a template for other partnerships, and perhaps give CarWoo a way to work with other lead generation sites like or, rather than having to compete against them directly.

“We can help those sites provide a much better experience to their users, rather than simply selling a name, a phone number, and an e-mail to dealers,” McClung says.

That ought to make dealers happy too. “The pain point on the dealer side is that if they are buying leads [from the big lead generation sites] those convert at a very low rate,” says McClung. “So the more highly qualified the consumer is when they show up, the less time they have to spend vetting the consumer, and the more they can focus on providing a fantastic experience back to the consumer. Those efficiencies are what the Internet has promised to all industries, and we are finally helping dealers realize some of them.”

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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