The Reality of Zag.com/TrueCar
Friends,
I send this message as a true friend in the automotive industry. As
some of you already know it is my mission to help dealers be
profitable and grow their results.
I wanted to reach out to you and send you this message to inform you
of what has been going on with Zag.com/TrueCar and the current
discussion.
I know that a lot of dealers are using Zag.com because they are sold
on the fact that they never pay for a lead and only pay $300 for when
the car gets sold.
The problem is that we give out access to our data. Zag and TrueCar
pull all of our data including front end gross, trade value, and back
end gross. Since they go into the database they pull information for
every deal that you did that month.
Now let's think. Let's hypothetically say that you had an issue with
a deal. I am talking about an issue where a customer was misquoted
severely to the point where you had one deal that you literally lost
$2,000 on. This happens at some point or another. Well now you let
Zag know of that information. They take that low price and post it on
TrueCars.com as the best price out there. Now you have customers
expecting to go into dealerships (including yours) to pay that
unrealistic low price. This takes competition to a whole new level.
So I ask. Why do we want to let a vendor take our data and use it
against us. Let's face it, Scott Painter (CEO of TrueCar) has never
worked in a dealership or experienced the pain that we all had selling
cars and dealing with struggles. He actually has been quoted saying
that he envisions this industry eliminating sales people with this
process. Here is a man that is out to give consumers transparency
while hurting out business. I believe in being fair, honest, and
showing transparency. I do not believe in auto dealers getting hurt
to do it. We should be playing on even field. If Zag/TrueCar were
posting realistic figures allowing dealers to make a profit we would
not have any problems.
Check out this Automotive News Article: http://bit.ly/vbMAim
Also, Jim Ziegler has created a discussion on this topic right here
and you all need to read through this because it affect your business:
http://bit.ly/smOaRJ
Here are some more important resources for you to look at: http://bit.ly/jNtK8M
http://bit.ly/bIt4WP
The bottom line. The automotive business has been great to me. I
created a solid career out of it. I learned skills in this business
that I would never learn anywhere (including college). I have made a
decent living at it. I started Dealer eTraining to give back to the
industry and help better our industry by providing training solutions.
When I see a company get started that hurts our industry I care and I
want to see it go away.
As the saying goes, "there is no such thing as a free lunch". If you
are using Zag because you like the at leads are free and you only pay
for the lead when the car gets sold you need to consider the damage
that you are doing by losing money on these deals and letting Zag use
your data to make you look bad in front of your customers as well as
create more tension between competing dealers. Let's put an end to
this madness. I propose that whoever is using Zag/TrueCar stop using
them and pass that on to everyone including your competitors.
Thank you.
--
Stan Sher
President
Dealer eTraining
Website: www.dealeretraining.com
Direct: (732)925-8362
Email: Stan@dealeretraining.com
View my profile on LinkedIn
Follow me on Twitter
View my facebook profile
Comment
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Comment by Stan Sher on January 4, 2012 at 11:01am
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Trust me. 2% is a BS number. I have had a chance to experience TrueCar for a full week. They are taking over a whole market. A dealership that gets 600 normal leads from their sources (that are not out to hurt them) now gets 1600. 1000 comes from TrueCar and they sell 30-40 cars per month out of it. That is a 3-4% closing ratio when we should be at 10%. I found out calling these leads that the customers are being steered in that direction. TrueCar has done a great job getting in front of the consumers with their commercials and marketing. But when 70% of your leads are 80-120 miles away and they do not want to make the drive no matter what value you give them or how good of a closer you really are you start to really see what a horrible company TrueCar is. If you want to clutter your CRM with garbage and let your DMS be used to extract data that will be used against you then TrueCar is your solution.
TrueCar is not a friend to the industry. TrueCar is worse then cancer.
I spoke to a BDC manager from a NY Chrysler Jeep Dodge dealership. He called me because he was looking to contact his TrueCar rep and when he googled to get contact information he stumbled on my blogs. He actually defended TrueCar saying that he does well with them and they are good. When asking him how he feels about getting the runaround from leads that are 80 miles away he simply responded that he does not waste time on internet leads at all. He follows up with them for 7 days and if nothing happens he just gives up. He did not believe that a lead needs to be managed for 90-120 days. I wonder what training he got. That is not a good BDC Manager at all. I cannot believe that dealers allow things like this to happen.
There is nothing out there that can prove that TrueCar deserves to have a place in the marketplace. I was going to go out and see the operation for myself. But I realized I want nothing to ever do with them after TrueCar started submitting bogus leads with my information to their own dealers. I had 100s of dealers from NJ, PA, and even CA call me to follow up with me because they thought I was an internet lead. These leads came from TrueCar. A company that is supposed to be a partner in helping dealers sell more cars is not only hurting them by taking their data but it is wasting their employees time calling on bogus leads instead of focusing on the real leads that should be coming in. Come on dealers, wake up!!! How can you let this happen?
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I am happy to see with what has been going on in the last few days. You guys have all done a great job helping to keep this industry going in the right direction.
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Slowly but surely TrueCar is getting what they deserve coming to them.
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Comment by James A. Ziegler on December 16, 2011 at 3:22pm
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Okay Honda has taken a courageous stand and banned TrueCar pricing with it's dealers. I know for a fact VW is strongly considering doing the same. I hope VW realizes that they've just began to get some incredible momentum in the market AND now is NOT the time to allow an invader like truecar to devalue the brand in the public's eyes. No matter what you sell, TrueCar cheapens your brand.
Group 1 made sure their dealers cancelled after looking at the exposure of having these people rooting around in their DMS, especially with AutoNation's CEO on the board of Truecar...
Group 1 was smart enough to see the writing on the wall and run as from away from these people as possible. When is Asbury, Penske, Sonic and others going to awaken and realize they people appear to be a huge threat? Even large private groups like Rick Hendrick should be looking at the evident danger we're all perceiving here.
Where are Ford, General Motors and especially...where is Toyota in this escalating skirmish? I am embarrassed that mark Reuss, president of general motors would actually go to TrueCar Headquarters and play with Painter showing him a 750HP Camaro.
I did not mention Nissan because their dealers are using Truecar to sell way below invoice so they can collect stair step money. You guys are smiling now BUT if Nissan takes away the program, you're screwed royally because of the benchmarks you set with TrueCar making your brand image "Ultra Cheap Nissan"
Does Mark Reuss NOT understand that his dealers are being raided by these people cheapening the product down to unprofitable and below? I find it hard to believe that Reuss would publicly suck up to these people if he truly understood.
There are a few investigations of TrueCar popping up here and there AND we're still urging dealers to put more emphasis with your dealer associations to get off of the sidelines and represent us... I know a couple of associations are doing their best while others limped off of the battlefield without firing a shot... weak.
I am especially disturbed about Toyota staying quiet while Honda takes a stand. It's like sending a message that Toyota has less value.
This thing will gather increasing momentum and I predict TrueCar will find some high-profile weak suck who will sellout their integrity for the publicity or hard cash and take a stand publicly backing them and betraying dealers.
Of course, this is all a lot of conjecture, speculation, supposition and opinion...I might be wrong. :)
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Scott Painter had his people call me. Scott Painter wants to have a call with me. What do you all think? Should I do it? You think he wants to offer me a job? Perhaps fly me in to show me his operations to try to prove to me that he is legit? Please let me know your thoughts and opinions. If anything comes out of this to anyone is that even little ole me can get the personal attention of someone as huge as Scott Painter. This comes to show you that if you use the internet the right way you can get attention from the way up.
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Scott Painter had his people call me. Scott Painter wants to have a call with me. What do you all think? Should I do it? You think he wants to offer me a job? Perhaps fly me in to show me his operations to try to prove to me that he is legit? Please let me know your thoughts and opinions. If anything comes out of this to anyone is that even little ole me can get the personal attention of someone as huge as Scott Painter. This comes to show you that if you use the internet the right way you can get attention from the way up.
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Comment by Keith Shetterly on December 12, 2011 at 10:13am -
See OPEN LETTER TO DEALERS ON TRUECAR BLOG.
Yeah, well, I commented this on that page: "Essentially, you've gotten big enough to grow beyond your statements here on dealers' data, then?http://www.techcrunch50.com/2008/presenter.php?presenter=95 Well, all that means is that now it's a data shell game, considering all your partnerships--in the end, the dealers SELL the car so collecting SOLD data and using it for the pricing curve on TrueCar.com IS repurposing dealers' SALES data against them in the marketplace. And there are many, many more than me that understand that. Even AutoNation has now said you are on a drive to the bottom. As did Honda. Thanks."
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Thanks.
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Comment by Keith Shetterly on December 12, 2011 at 2:53am
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See Honda Drops TrueCar! Hey Stan, great job on all this. :)
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