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 Stan Sher on December 8, 2011 at 10:25am

Grant just has not been our shoes with Zag and TrueCar to really understand what is going on.  I love the guy and support him.  But he is wrong here.

Comment by Stanley Esposito on December 8, 2011 at 10:23am

I saw the Grant Cardone video.I think the point Grant is making is for a salesman not to dwell on truecar and to continue to be the best you can be and sell value in yourself and dealership. He is a motivator and a good one but it is short term thinking. I hope you guys here can snuff out the fire before Painter gets his wish and has guys like me eliminated.

In the mean time I need to continue to be the best and outlast the haters and everyone who comes after my job!

Comment by James A. Ziegler on December 8, 2011 at 9:33am

Unfortunately, Dealer Associations have to tread lightly here and cannot appear to be in anti-trust violation. They have to stand back and let us fight our own fights.

Comment by Thomas A. Kelly on December 8, 2011 at 9:17am

Eric.....when you say ..."Maybe all Vendor Contracts need to be submitted to a dealer organization for review and interputation and given an overview and recommendation.".... I would add: research who owns what companies and all affiliations, who is on whos board, etc. to the review process, I have been amazed what "whois.domaintools.com" and googleing the heck out of word tracks has turned up in terms of vendors being on both sides of the fence, some are very cleaver but if you keep digging you will often find more than what is openly presented .....begin to better understand who has skin in what games ...Good Post!

Comment by Mike theCarGuy Correra on December 8, 2011 at 12:47am

Prt 2.
Fast forward to this past summer. In So Cal the Honda market is pretty fierce as I’m sure it is in many metro markets. Our ZAG rep had stopped by to question a billing issue that I had resolved by the time he arrived and while we were chatting I grilled him about stories we had heard about another dealership forcing ZAG customers to buy ‘Pro Pack’, custom wheels, spoilers etc in order to get the ZAG price. He actually said, “yeah we have heard about that for some time now and they have been warned more than a few times. We may get to the point where they end up on probation with us until they can bring their business practices into line.” I was pissed beyond belief and asked him WTF dude, you MAY get to a point when you MAY have to put them on probation? What they are doing goes against everything you folks SAY you are trying to get OUT of the car business! His answer was a simple one; “Mike, they sell a LOT of ZAG leads…”

It amazes me that CA has not gone after ZAG for brokering car deals without a Brokers License, plain and simple this state is on its way to a B/K and they are allowing ZAG to fly under the potential income radar???

Controlling prices in a market, dictating business practice’s/policy and hiding the truth about the sale of a customer personal information from consumers… this beast needs to be killed.

Comment by Mike theCarGuy Correra on December 8, 2011 at 12:47am

Prt 1.
My issues with ZAG go far beyond their attempts at market pricing domination, although their pricing tactics alone are indeed enough to warrant the Occupy ZAG movement we have started here! A couple of years ago I was working for a Subaru dealer and we were signed up with ZAG. Each month I would receive their statement and go through each deal to reconcile and make sure each was a ZAG lead before forwarding the bill to the business office. As with most dealers I have worked for/with the ZAG fee was worked into the deal and at times made for some pretty heavy front end losers so it was imperative to verify each lead source. I came across a deal that was done under a name different than the name on the lead but the name on our deal was on the statement from ZAG. I immediately questioned it and dug in. The bill had two names on it, lets say Jane Doe and Mary Smith, both at the same address. When I looked into things I found that we had received a lead from Jane Doe at the beginning of the month and then Mary Smith bought a car at the end of the month. The address on Mary Smiths deal matched Jane Does but nothing else made sense as Mary Smith came in on the ad we had in the paper on an Outback wagon and was a screamer loser, priced even lower than our ZAG pricing. I asked the Salesman for more clarification and he said the customer never mentioned any other source besides our ad, she came in with the ad and that was all she was having. He also explained that she was in the process of moving and had used her MOTHERS address, as she did with all her mail because she didn’t have her new address and didn’t want any issues with her payment. I called my ZAG rep and explained the situation politely, fully assuming they would say it was understandable and they would not bill us for that lead. To my complete dismay I was totally wrong. Our reps response was that she was sure that the mothers research through ZAG had directed the daughter to our store and we wouldn’t of even had the deal had it not been for ZAG, in addition my asking that the fee be waived was ridiculous and she read our dealer agreement to me to clarify that ANY residents of the same address could be considered as the original customer themselves and would be billed as a sold lead. Two weeks later and many phones calls of screaming to people that Mary Smith had NOT received our dealer info from her mother, she saw our ad and bought the ad unit at a huge loss I was lectured as to the ‘proper’ way to manage our budget! Yes, they actually made a strong effort to drive the conversation AWAY from the lead fee being valid for customers of a different name how we were doing our accounting! In a very condescending manner I was told something along the lines of, “you know mike, this probably wouldn’t be a problem if your office was managing your finances better. Instead of charging the lead fee to each deal you should have your ‘GIRLS’ just post the total amount due to ZAG as an advertising fee just like your print ad or other 3rd party lead provider, after all I’m sure you don’t charge each Dealix deal 17 dollars when you sell it do you? At this point it really doesn’t matter any longer because we have already been paid for this lead, our billing department sent the statement to your corporate office and we received payment two days ago. However you really should take a strong look at how they are doing you’re accounting in the future, better cost management could avoid such discussions in the future.”
Yeah, ZAG folks told ME how to better run a dealership so that the BROKER FEE (lets call it what it really is, a broker fee charged by a company WITHOUT a brokers license) wouldn’t seem so outrageous!

Comment by Stan Sher on December 7, 2011 at 10:46pm

A friend of mine is working with a previous client of mine for Phone Training.  This auto group uses TrueCar and Zag.com and they use it simply because they feel everyone is using it so they need to be too.  Well, he told me that they use UCS and that they never signed an agreement for Zag to go in and take their data.  Is it true?  Does UCS not allow vendors to access data?  Or maybe she was just mistaken and forgot that she let Zag rip her off.

Comment by Jerry Thibeau on December 7, 2011 at 10:45pm

I sent Grant a message and I really hope he takes a deeper dive on the TrueCar juggernaut. 

Comment by Keith Shetterly on December 7, 2011 at 10:32pm

@ Mike:  Have you watched this video?  6min55sec in if you want a teaser; about 9min in or so he admits to using dealers' backend data.  http://blip.tv/this-week-in-youtube/truecar-1265643

Comment by Mike Warwick on December 7, 2011 at 10:29pm

Is it just me or is Grant completely overlooking the fact that if complete transparency and commoditization comes to the car business and Painter gets his wish of a salesperson free transaction, who is going to be left to buy Grant's training?  Seems to me that Grant makes a great living training automotive salespeople. Does he understand that Truecar's goal is to eliminate his bread and butter? 

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