TRUE CAR and ZAG Cyber Bandits, Parasites or Good for the Car Business?

Jim Ziegler asks...

I am hearing a lot of discussion about True Car and ZAG.  I continually scratch my head and wonder if  desperate dealers are doing the marketing limbo "How Low Can You Go?" 

Are we so bad at what we do that we have to line up and pay vendors to lose money? AND, who is giving these people access to your data that is used against you? 

 

Who owns these companies and what might be their ulterior motive?  Sometimes I ask questions to which I already know the answer. 

 

Am I wrong?


What do you think... JIM

 

 

Jim Ziegler's Guidance and Recommended Action Plan:

Ten Areas We Need to Concentrate on to Bring This Monster to It's Knees...

  1. Government investigation of ALL Data Aggregators taking consumer information from dealers' DMS. Sadly enough, dealers who do business with TrueCar are exposed to  liability charges. Cut off all access to unecessary data, no matter who takes it from the dealers DMS and make it illegal to "resell identifiable consumer data" and "transactional data".
  2. Educate Your Fellow Dealers; If anyone takes financial transactional data, they expose the dealer that allowed it to violations, especially if it is passed on to other vendors or shared.
  3. Educate Consumers to what they're doing with their information...
    a. You buy a car from a dealer, do you really want your personal information, and maybe even your financial information, passed along and sold and shared by "God knows who?"
    b. These People Charge the Dealer $300 which the dealers have to build into the deal
    c. Your Privacy and the Security of your Information could theoretically compromise your identity if you do business a company that takes data from the dealership.
  4. Educate Investors and potential investors they could possibly be mislead if anyone is telling them this is a safe investment because of all of the dealers pushing back, associations pushing back, and government regulators in many states coming after TrueCar's business model as NOT compliant, in some cases they're saying it is Not Legal.
  5. AMEX, USAA and all of their affiliates do not want the bad consumer relations this push back is creating with their members and customers.
  6. Cancel your dealership's Affilation with TrueCar. Tell people with TrueCar certificates that YOU don't honor TrueCar and you feel the company is NOT reputable. Educate consumers as to perceived data exposure if they buy from a TrueCar dealer. Make sure that each consumer knows that using TrueCar actually increases their vehicle cost by $300 to $400.
  7. Make the dealers selling at huge losses take all of those deals. Big problem right now is too many Nissan Dealers and others are taking huge losers to get the factory money. The TrueCar reverse-auction business model will continually push those numbers down until the factory money is non-existent. Consumers need to hear from many dealers, "We don't do TrueCar"
  8. Keep calling your National and State Dealer Associations demanding they get involved and stay involved... No excuses.
  9. Get the Manufacturers into the game. If GM, Ford, Toyota, and other majors change the rules about how we advertise and do business to protect the dealers, we can cut off their ability to set pricing. So keep it up at every dealer meeting. Call your Dealer Council Members and protest to your factory reps. Tell the manufacturers, if they want showroom and facility improvements, we need the ability to make fair profits.
  10. Tell everyone you know. Educate other dealers and industry people. Watch the Painter interviews... I believe this is the first time a vendor has publicly announced they intend to bring down the dealers and hijack our business, taking our profits and starving us out with our own data. Painter has said manufacturers and dealers should go bankrupt and he, in his God-like way "will control distribution..."
    When the TrueCar-Yahoo Deal kicks in we need to stand firm and "Just Say No" we don't honor TrueCar deals.

Read this article as a referencehttp://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN... 

AND, if you doubt the mission... read this...  http://www.zag.com/websiteASSETS/whitepapers/ZAG-WhitePaper3.pdf

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Comment by Keith Shetterly on April 9, 2012 at 11:33pm

@ David:  Thank you, as well, and I don't know that that will happen.  Seems impossible in some cases.

In the meantime, though, I ask:  What are these pricing services a symptom of, and what is the consumer doing that we're not seeing and reacting to?

I think it's something very, very important.

Thanks again, and get some sleep!  :)

Comment by David T. Gould on April 9, 2012 at 11:19pm

Thanks Keith.

I am very interested to see how fast dealers (including mine) will forgive and / or forget.

Comment by Keith Shetterly on April 9, 2012 at 11:04pm

@ David:  I'm not short selling data privacy, and it worries me, still.  I'm just stating a fact that Edmunds, TC, DMS providers, etc. trade on information that--in lots of cases--appears legally anonymized (I'm not sure at all that protects privacy, but unfortunately it appears to be legal--and consumers don't seem, so far, to understand and/or mind it).  

What I *am* saying, though, is that we can choose worry only a data horse--no, a gigantic data herd--and try to get them back into the barns OR we can realize that, to me, that's no longer THE ONLY problem.  What the TRUECar debacle let me to is a realization that the consumer has changed, and WE have not.  TRUECar over these months was a nasty symptom of an overall problem we have, and if their company died tomorrow it won't change that--the consumer is moving faster than any of us seem able to react to.

It's the classic situation in this business, in that we are always in "twelve thirty-day sprint" mode, so it's hard to see anything past tactical issues.  I want data controlled, no doubt.  Essentially, I am "sending out the call" for a partner for dealers who will move around this problem and get in front of the issue, for once.

I don't have high hopes, but nonetheless my personal beliefs require that I make a try at it.

And, fair enough on the Catch 22--I agree 100% with you that that is the proper statement.  Without the controversy, TRUECar would not be learning who their customer really is; and the changes from that learning are, it seems, falling on a lot of deaf ears.

TRUECar and data need huge attention and accountability, at the lease, I just don't think they are the ultimate problem any longer.  As Pogo once said (for those that remember that comic strip), "We has met the enemy, and he is US."

Essentially, I see TRUECar--at least through their public face(s)--learning from this and adapting to their customer (US!).  I don't see all of us, however, learning that same lesson from this . . . well, this debacle.

Comment by David T. Gould on April 9, 2012 at 10:48pm

@Keith: Chicken and Egg or Catch 22?

We know which came first and the direct effect of TrueCar's actions are where we are today...

I hope your not short selling data privacy.

@Mike: Good to see you hanging in there on the high road.

Comment by Keith Shetterly on April 9, 2012 at 10:38pm

@ Mike:  If you can say, do you personally agree that the consumer is changing the marketplace, and in ways wider and deeper than just price?  I just see this all as much bigger than TRUECar, bigger than data sources, and bigger than . . . just about anybody has taken on so far.  I do appreciate the efforts you have made, and you have a chicken and egg (historical) issue at TC:  Without the wake-up call from all this attention, TC wouldn't be trying to make positive changes.  And because of the issues that caused the attention, TC has an uphill battle with many dealers and dealer professionals.

And, yet, I can't shake the perspective that we're all spending a lot of energy about a pricing service and where data goes and doesn't go, when in just a few short years price won't be the strongest determining factor any longer.  

I care lots more about where the consumer goes now than I care where the data goes.  We are amidst a changing consumer mindset on what transportation means.  I realize naysayers will pop up, but they did the same thing in travel--my previously-noted example of a friend who thought she should buy up all the travel agencies because folks "always want the help of a human" . . . well, I don't want that to be us.  Wiped out by the transportation version of Expedia.com.

To everyone reading, really, I wish I had a partner for dealers who helped us chase the customers where they are going.  One day, we'll be looking for the buffalo as the Native Americans on the plains did--and someone else will have taken them and their hides ahead of us.

My $.02.

Comment by Michael Timmons on April 9, 2012 at 10:25pm

@Jim, I certainly wasn't disappointed by our presence at Digital Dealer or the overwhelming professionalism displayed by vendors, TRUECar dealers and non TRUECar dealer alike. Our team met with some great dealers, answered many questions, showcased our new dealer portal and signed up many new dealerships. I even ran into Jerry Thibeau at one of the evening parties, and in good natured fun, he graciously accepted my invitation to take a picture with me. Overall, like the Automotive Leadership Roundtable, I was very pleased with the positive responses from both events. 

Now if you are saying I bombed as a presenter at Digital Dealer, I am sure nobody will ever mistake me for Jim Ziegler or Grant Cardone when it comes to public speaking. Although, I will say that the attendees were very engaged and the Q&A session had great participation. 

I also realize that there continues to be people that dislike TRUECar and I know, for many, that will never change. Regardless, we will continue to make strides toward developing better products for our dealers and investing in driving quality traffic. Hope you are feeling better, and as you know, your constructive input is always appreciated.

Comment by James A. Ziegler on April 6, 2012 at 5:08pm

I am told that TrueCar bombed at Digital Dealer. They were disappointed to say the least that there were so few decision-makers with authority present at the conference. 

Comment by Keith Shetterly on April 3, 2012 at 1:01pm

I don't think that TRUECar is necessarily the answer to what Jeremy brings up, and in fact I've spoken to Mike Timmons of TRUECar about this very same thing:  The Car Buyer is forcing a change in the market.  It's NOT NOT NOT all about transparency, however, and if that was the case then the one-price model quickly would win out.  Perhaps it will, eventually, but differentiation is key, regardless.  Which is the "world class" statement by Jeremy.

That said, my comment on Jeremy's step is this:  I have disagreed with him for some time on TRUECar's motivations, and I will always find it very hard to disregard Scott Painter's anti-dealer stance, no matter what changes of heart he personally claims.  For me, though, TRUECar has identified a key weakness we all have that has nothing to do with data.

It has to do with us all sitting behind a wall of franchise laws that creak under the strain of the changing consumer.  18-24 year-olds rank Internet access above car ownership!  And, as always in our culture, where our youth go then so many of us follow (it's called "Youth Lean", where older siblings and parents adopt technology and/or consumer attitudes that were first STRONGLY in the hands of those younger).  

Finally, if the manufacturers really thought "one-price" would sell more cars, and it could be provided in all markets, I believe they would rush to adopt it.  Using pre-owned as an example, TexasDirectAuto.com is the #1 independent dealer in the USA and the #1 eBay dealer in the world.  $500million a year, and still people question--or, worse, IGNORE--the model.  Unbelievable, really.

What dealers need to do is modernize to meet the consumer.  From advertising to process, we are undergoing a change.  It's NOT all about price--really, that's just the first anxiety hurdle.

And what is it about dealers and vendors?  TRUECar needed to be a dealer's friend, which (my opinion) they mistakenly thought was just about delivering customers while they talked down about dealers a great deal.  And then came a squadron of penultimate mistakes on the auto professional blogs that would be great examples for teaching how NOT to use social media.

Dealers need as many friends in the vendors as they can get.  TRUECar didn't present themselves as a friend.  

And that's nobody's, and I mean NOBODY'S, fault but their own.  What they do from this point on . . . I don't think a Dealer Council will suffice to accelerate them to the speed they would need to adapt themselves.  It's nice to see some effort from them on that point; I just don't agree with Jeremy about the reasoning.

My $.02.

Comment by David T. Gould on April 3, 2012 at 10:17am

Telling... " I feel that by eliminating price negotiation and moving towards transparency, the “bait and switch” tactics by many dealers will end and all dealers can distinguish themselves by the differentiation of value added services – and not “the perception of the lowest price.”  If it becomes possible to eliminate the terrible process of negotiating a car purchase, then dealers can concentrate their efforts on delivering a world class experience for their customers and provide enhanced value." from Jeremy Alicandri http://jeremyalicandri.com/2012/04/02/my-reasons-for-joining-trueca...

Comment by Thomas A. Kelly on April 2, 2012 at 6:38pm


Jeremy Alicandri Joins TrueCar Dealer Council:


http://jeremyalicandri.com/2012/04/02/my-reasons-for-joining-trueca...

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