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...
- 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".
- 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.
- 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. - 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.
- AMEX, USAA and all of their affiliates do not want the bad consumer relations this push back is creating with their members and customers.
- 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.
- 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"
- Keep calling your National and State Dealer Associations demanding they get involved and stay involved... No excuses.
- 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.
- 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
Comment
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Comment by Stan Sher on March 4, 2012 at 8:17pm
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@Michael a 1.5% closing percentage is unacceptable at any level. Your leads are garbage and your company helps to ruin customer perception of dealerships. At 1300 leads I should see 75-100 cara sold not 30. But you wouldn't understand you are a corporate suit that never sold a car.
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Comment by Jay Prassel on March 4, 2012 at 7:58pm
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@ Michael, well said and you make great points. While TRUECar may not be for every dealer, some are enjoying success.
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Comment by Michael Timmons on March 4, 2012 at 7:27pm
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@ Stan. Any dealership that closes 30-35 cars a month holding good grosses certainly has upside on any lead source as it balances process, price and volume. One of the biggest changes with TC that will be implemented soon will be the way we distribute leads to our dealers. Price will not be the main factor in our algorithm that determines dealer selection and in some cases where the dealer is priced "too" low it will negate the dealer. Also, the distance from the dealer will be greatly reduced given higher quality leads to our dealers and a greater propensity to close. When I was with AutoNation, my team enjoyed double digit conversion with Zag/TC customers and we sold over 5000 cars annually. I would have considered myself foolish if I wasn't on their program and I certainly would have welcomed the new product changes. I know that our smart dealers will be rewarded for their decision to stay with TRUECar.
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The dealers that stayed on with TrueCar are very foolish. I did everything possible to have one dealership cancel whb I started my relationship with them. They close an average of 1.5% of the leads and deal with more headaches then anyone can imagine. They hold good grosses. But this 1.5% amounted to 30-35 deals per month with 900 leads cluttering the CRM with garbage. All smart dealers left TrueCar while others continued to get screwed by them.
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Comment by Keith Shetterly on March 4, 2012 at 5:29pm -
The Scorpion and the Frog
A scorpion approached a frog for a ride across the river. The frog said, "No! You'll just let me get out in the middle and you'll sting me!". The scorpion replied, "Why would I do that? It would kill us both!" And he convinced the frog to give him the ride.
Sure enough, in the middle of the river, the scorpion stung the frog. As they were both drowning, the frog asked, "Why did you sting me when you knew we would both drown???"
And the scorpion replied, "Because it is my nature."
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Scott, that's fair but I think a little too much lipstick already poisoned the well enough :)
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Comment by Keith Shetterly on March 4, 2012 at 5:25pm
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I think that Scott is saying don't put the new friendly bear in the old scorpion suit.
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Comment by Scott Falcone on March 4, 2012 at 5:23pm
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@ Mike, I understand and agree totally re the philosophy. But a bit of lipstick may not be a bad thing for this situation. It least it sets the tone for the bigger change that you say is under way. Just sayin...
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Comment by Keith Shetterly on March 4, 2012 at 5:19pm
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@ Scott: Yeah, it was me. :) It's one of my favorites, because it holds so true so many places in life, and it's kind of a Zen story.
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@ Scott. As you know in your business, reputation management is impossible if the client or business with a bad reputation is unwilling to change. A name change without a philosophical change is like the proverbial pig with lipstick. I realize that it takes actions for people to believe that a change has occurred and more importantly these actions have to be constant. We are changing and I promise that as long as I am involved with TRUECar we will continue to support dealers and and their profitability.
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