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 reference: http://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 Mike Warwick on December 8, 2011 at 2:08pm

Pete - we've all dealt with low ball print ads and we all know how to overcome them. The difference with Truecar is that you are not competing with a dealer who has one blow out ad car loss leader.  You are dealing with a customer who has a guaranteed price from a competitor.  The consumer believes their pricing data is coming from an unbiased Third Party (Truecar) based on actual transaction data so using the usual methods to overcome a low ball print ad are not going to work with this customer.  This customer is going to say, "I can buy this Altima for this guaranteed price.  Will you match it?"  If you say no, they walk out the door.  That's if they bother to shop you first instead of going directly to the Truecar dealer that is blowing Altimas out for $800 below invoice.

Comment by Pete Obuchon on December 8, 2011 at 1:05pm

My take on Truecar from the trenches:

     I agree with Grant in the short term. I think that True Car will weed out the salespeople with the inablity or without the desire to do their jobs. These are the 8 car guys that don't prospect, follow up or have a clue about what they are doing. In the short term, my customers will still give me a shot just because I am prospecting them before they are in the market actally shopping for a car. All good salespeople do this via phone calls, birthday and Christmas cards, and by everyday interaction with their community. In the long term, I don't know where we are heading with this. I don't like the fact that they are capturing my customer's data without their knowledge from the dealership's data base. I'm not worried about the pricing data simply because I've been dealing with lowball print ads for the past two decades (and lets face it, that's all Truecar is... a lowball print ad), I just don't know what to tell my customer when/if they ask me if I have allowedTruecar to access their info. I have some customers that have been with me in my personal book of business through a few dealership changes and a couple of different manufacturers. I can't honestly tell them that their info is safe. I don't think Truecar is the problem here though, it is the dealership's customer information security process that is in question. Thoughts?

Comment by Jim Kristoff on December 8, 2011 at 12:38pm

In the video below....listen between 9:20-10:50.......the information is coming out of your DMS....

Comment by Jim Kristoff on December 8, 2011 at 12:37pm


Find more videos like this on Automotive Digital Marketing Professional Community

Comment by Laurie Halter on December 8, 2011 at 12:35pm

Great points Eric. Regarding your quote "Maybe all Vendor Contracts need to be submitted to a dealer organization for review and interputation and given an overview and recommendation." Have you looked at Dealers United? Besides being a sort of a "buying group" for their members, they will research the vendors/products and negotiate all the terms of the contracts. Dealers don't need to worry about being taken or signing their life away. Best of all, joining doesn't cost a thing and you never have to accept any of the Dealers United deals.

Comment by bryan w shufelt on December 8, 2011 at 12:12pm

The data they are getting  for one is not always what they think it is. How many times do you have to change prices because someone is upside down on a trade??? And what they are not telling the public is that they are now another middle man that the public is going to have to pay for, yes the info is free but you will pay for it when you buy the car so they are driving the transaction price up!!! People have been trying to get rid of the dealership and the sales peron for years.I remember the guys Acura hired years ago telling us the internet will probably make the salesperon pretty much obsolete, that was 15 yrs ago, Its not gonna happen, people sell people cars not web sights like true car. And they are talking about the difference in transaction price being  $2,000 most of my cars do not even have that kind of mark up! Like the guy in the video said, this info has been out there for yrs consumer reports in the 80's now  and its faster now on the internet. If they achive their goal of one price selling, they will have created a situtation where they are no longer needed. These guys will adapt to something new for dealers, or soon they will burn through their money and be gone and we will still be here!

Comment by James Easter on December 8, 2011 at 12:11pm

@Stan fully agree with you - Grant has taken his position it seems, and I respect that, but not from an entrenched one - working with Zag/TrueCar day in & day out for years.  This is getting way out of hand really fast, and I'm proud to see many of the Dealer & Industry professionals taking a stand on this one!

Comment by Keith Shetterly on December 8, 2011 at 10:51am

@ David:  Yes, Grant came down on the wrong side of this issue.  I could give him the break right up to the end when he says TrueCar is our friend.  NO THEY ARE NOT.  They're such a friend that they get our back better than any knife we ever had.

Comment by David Ruggles on December 8, 2011 at 10:49am

When TrueCar succeeds in turning our business into a true efficient market, where buyers and sellers have exactly the same information and eliminating the need for sales people, and makes a fortune doing it, who will Grant get paid to motivate?

Comment by Keith Shetterly on December 8, 2011 at 10:48am

@ Jim, I don't understand the comment about the associations.  Don't they help with legislation?  How is helping here different?  Maybe we need an additional association for stuff like this, something of a different type.

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