Do dealers have what it takes to battle True Car online?

Ok, let’s get ominous…

True Car – is going to eat us all. Oh, they are coming alright, they look nice enough but they are already RICH with profits that dealers refused to earn themselves. I intercepted some emails from TrueCar (*not true) and these are some facts – They are stealing your dealership's numbers… all of them. Up counts, Passwords, the number code for Snickers in your vending machine(C6), that last beacon score you submitted(632), how many kids your Finance Manager has(2) , the receptionist’s cell phone number(?), your CSI score, EVERYTHING – they want it all! They are the Cookie Monsters of information.

The worst part isn’t that they have our precious numbers, they also have our customers. They are luring them in with some very effective "tricks", building value in their sales process, giving the customer some expectation of what the process will be like, and influencing them with clean crisp video and clever audio tracks. With video they lend the impression that “...hey! Everyone is doing it this way now”. In short, they are doing what we should be doing.

…It gets worse. Once True Car has all our numbers, and ALL our customers they won’t need us. I heard from a knowledgeable source that Scott Painter hates you. After this is all over he is going to build a brand new Internet Price site to help colleges charge as much as possible for tuition. Can you believe that?... he wants to make sure you can’t send your kids to a good school folks! He is starting a movement against white picket fences and would like to make apple pie illegal. He is going to have a team of kids in every market that are going to start stealing tailgates, and breaking windows on the lot. Once dealers’ are on their last leg he will make them trade their first born sons and likely heirs of the family business for HOT leads on fresh new deals. It’s scary out there folks. We are up against a beast and it's feeding itself off our leftovers, scary!

The greatest industry in America isn’t going out business – it’s going ONLINE!

When you camp, if you leave too much meat on the ground the bears will come to clean up and claim what’s left. That is what is happening here, it’s NOT too late.

Let’s talk about “survival situations”, I think most dealers in the marketplace right now are in such a position and have been for many years. Yesterday I was watching a survival show and heard this, “…in a real survival situation you reach a point where you only have so much energy left. You have to use this energy to find the right food, and not waste it searching – or you will die. Obviously, if you stay where you are and do not go after food, you will eventually die”.

In tough times many dealerships look to save money...

“A man who stops advertising to save money is like a man who stops a clock to save time.” – Henry Ford

Here is a fact:

Wives save money, retired people save money, banks save money – Businesses MAKE money.

Dealerships need to wake up and realize the industry that surrounds the cars on their lot is moving the point of sale online. The value that they have worked for years to provide on the lot, and in the store won’t matter (or affect the price point) if they don’t move that same presentation and value online. If you don’t go where the customers are and build value in yourself there, someone else will. For years dealers have waited for that someone to be a local competitor, and it never came. So dealers never addressed this as a weakness. But think about it. Huge websites PACKED with opportunities, vehicles only being compared by prices and dealers not putting messages alongside their vehicles. The bad news is: the industry is getting exactly what it deserves out of the True Car situation. You ate a few bites of the turkey leg, left it by the fire… and now the bears are all here!

After a customer buys a car and is asked to rank the things that were most important about their purchase, (AFTER) they often rank “price” out of the top 5. Obviously price is always #1 if asked BEFORE the sale. So what are dealers doing to change that response during the deal/process? Whatever the answer is: we are not also doing that online, and we should be. That is what car dealers have to offer the marketplace, that service! If someone sells your product, absent of your service… You get True Car.

True Car could never take over the car business, never replace dealerships fully. The fact is that owning a dealership isn't something you can outsource, or the factories would do it. In fact most factories have experimented with starting their own retail locations, factory run dealerships - They ALL failed. It takes passion, conviction, and innovation to keep a dealership alive...If the factories couldn't take over the car business without dealer principles at the reigns, than neither will True Car. The problem is that they allow for the destruction of our process by teaching our customers NOT TO EXPECT VALUE from their buying experience. THIS is the threat of True Car.

Ever since the beginning days of the Auto Industry, the principles have been the same… Value includes many things. Price should be on the list, but it has never been the MOST important thing before, and the only reason that is has become that way online now, is dealers STOPPED building value where the customers are. The Industry will move online, there will be shoppers who end up with True Car…and there will also be customers that will always pursue the buying experience and consider a better customer experience the most valuable thing offered when buying a newer vehicle. They will just expect to find that value online, as well as in the store.

So now imagine that you are that person in a survival situation stuck in cave. You are cold, hungry, and have very little energy left. You can use that last bit of energy to get involved, and fight for deals, fight for gross, fight for market share with it. Or you can lay in the cave and complain, and let True Car eat your babies.

Join the fight at www.whatsnext.pro

"the quality of your videos reflect the quality of your brand or business."

Andrew Myers

206.478.8721

EDIT: Since I posted this I noticed an article from a True Car Rep. here:

In this article he says:

“Likewise, ask any dealer consultant or vendor if you can pay them AFTER their consultation/seminar/training/visit IF AND ONLY IF the dealership actually improves as a direct result. A vast majority won't largely because they A) aren't that good, and/or B) aren't confident they will actually help the dealer move the needle”.

check out my response here:

PROMOTE!

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Comment by Thomas Mitchfield on January 31, 2012 at 11:49pm: Great work! I noticed the TRUE CAR guy never responded to your response to his challenge. Typical of them

Comment by Andrew Myers on January 31, 2012 at 11:45pm: Hey thanks! 738 views! I'll take it!

Comment by Roger Botton on January 31, 2012 at 9:57pm: Right on guys!! Well done, way to shake it up and bring awareness out there. Keep up the good work and shoot it out.

Comment by Brian Perry on January 19, 2012 at 4:55pm: I think I read about half and my mind about exploded. We agree. This happens every time something new comes along. I remember when Saturn was the flavor of the year. What happened to Saturn by the way? lol

Rock on

Brian

Comment by Andrew Myers on January 19, 2012 at 3:15pm: @Brian, I think we are agreeing with each other. But I can't tell if you see it that way. This article was to make fun of people experiencing "trueCar hysteria" and point out some of the same things you did. I think that dealers bringing their value propositions to the "digital" version - Is very much like the example you gave about i-tunes and apple. What this article was attempting to suggest is that dealers need to recognize the need to move their point of sale to the areas online where the customers are deciding where to do business.

You mentioned relashionships with banks, Winning culture with common purpose, and I would add family owned, biggest in the state, cleanest inventory, and many other advantages like those under the heading of "Brand Statements" about your dealership.

All I recommend - is that dealers take the time to produce high quality videos that will actually enhance perceptual quality in your brand about these specific messages (videos). It's the same things that work in your store and give you an advantage in the "real" marketplace locally on an everyday basis. I think there is a reason why selling price online works... because it is the only thing being offered online. If dealers built value online, the relavance of TrueCar's "price-only" and "price-first" approach would fade.

Comment by Brian Perry on January 19, 2012 at 2:02pm: I don't know what to think about all of this... "They" said one-price selling would kill us. "They" said Carmax would kill us. They" once said the Internet would kill us. True Car cannot do anything about your Service Absorption. True Car cannot hurt you to affect you if your dealership is paid-off and debt free. True Car cannot effect your relationships with your bank. True Car cannot effect a winning culture combined with a great sense of common purpose. Only you can. I think the larger threat is from the manufacturers in the form of all the big and small money leaks that come off your bottom line every month! If dealers got together, influenced dealer councils and raised as much hell as has been raised on this topic, maybe, we could change what is really the biggest threat to the retail Auto Industry. It's true that True Car needs to be watched where DMS systems are concerned The cat is already out of the bag . It's similar to when Napster came along and threatened the recording Industry. Napster failed. Apple guessed that people liked and would prefer in some instances to download music digitally. They thought ahead to what is next and invented I tunes. Now, record labels still have had to re-invent themselves by learning to make money in different ways. We may have to do the same one day in the not so far away future. We may have to bring back the dead (like having aftermarket departments in our dealerships....Jim Ziegler could attest that Dyer and Dyer where he once worked had a fabulously profitable aftermarket department), or we may have to come up with new ways to skin a cat. My point is that we will not be able to do business like it is the 1950s anymore. Watch, be vigilant, and prepare for the future. It's up to us, not True Car to determine if we succeed or not. I do like seeing car guys passionate about something. This is refreshing!

Comment by James A. Ziegler on January 19, 2012 at 1:31pm: CarFax is NOT a dealers friend, neither is Edmunds for that matter. TrueCar is the worst and most blatant BUT I can name a dozen other enemies that use our data against us after they charge us to refer customers to us we would sold anyway before they lowered our profits.

Comment by Andrew Myers on January 19, 2012 at 1:28pm: @Alpha Dawg, The idea of these parties together at NADA and DMSC is starting to shape up in my mind like the last half of the movie West Side Story. Should be an interesting event!

Comment by James A. Ziegler on January 19, 2012 at 9:29am: Kill the Data, kill the Beast(s) Right after NADA we will begin a campaign to make dealers aware and to scrub the DMS of intruders, data pirates and extractors... The Data Wars are about to begin. Right now we need copies of every vendors contract, the part where they disclose what they may do with Data. Send it to me personally.

Comment by Andrew Myers on January 18, 2012 at 1:47pm: @Linn, It sounds like you read this multiple times trying to find somthing to disagree with. "lip service"? First, I don't even know how offended I should I be about that because it doesn't make any sense to me, and I have no idea what you mean by that. I think the point of this post and previous posts was building value is important, not gaining traffic. I am unsure how you got a different take-away if you read this "over and over." Your example is rediculous....

"I would take 20 sales with 30 ups compared to 20 sales with 60 ups"

I would rather have a site that had a 28% HIT to appointment ratio over a store with a 5% return on this. That is my message, take your store online, and you can start counting those thousands of "worthless hits" you mentioned, as actual UPs, actual oppurtunities. I would rather have my sales process start where there is hundreds of ups, compared with the 30, or even 60n that come on the lot...wouldn't you?

You can't be serious when asking "why do hits matter to a dealership's website?"... and even in the same sentence you obsess over up count on the lot... You just can't possibly be that disconnected from the world. Read about ZMOT. If that is really your outlook, you are the guy that wrote this for.

Look forward to the blog you came here and "lip serviced" us about creating "soon" a few days ago. I am sure it will be awsome.