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 Jerry Thibeau on December 7, 2011 at 9:53am
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@Jim, TrueCar has lobbyist on the payroll, they are attempting to change laws in states where bird dog fees are not allowed. Rumor also has it that State Associations were warned to be careful since TrueCar has a powerful Anti Trust lawyer on the payroll as well. 200 million buys you a big stick.
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Comment by Kevin Nachbar on December 7, 2011 at 9:51am
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I checked out Clear Book retail prices on several in stock used cars and the margins where pretty fair. Blow out aged inventory or the slow selling products, keep a more than fair margin on your hot stuff. There is not a unlimited supply of quality inventory new or used don't give it away. If you arm your salespeople with the right information and the right technologies you can win. The consumer wants the dealer to do a better job of validating their price and validating their trade value if you do these things upfront True Car will go away. Dealers need to make some fundamental changes on how they go to market or you will lose.
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Comment by Jim Kristoff on December 7, 2011 at 9:42am -
@Jim.....yes...it looks like TrueCar would LOVE to have the market all to themselves.
Every State Dealer Association along with the NADA needs to lobby for legislation to stop Truecar and any other company like them, from utilizing proprietary information for their own profits.......ALL of the companies that Truecar is affiliated with need to be stopped!!.....
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Comment by A. J. Maida on December 7, 2011 at 9:41am
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Funny Jim the improving margins part jumped out at me too!!!!!
lead generation, search engine marketing, inventory listing services, print, radio, TV, billboard, etc.) and eliminate underperforming programs.
So now Painter not only wants to eliminate the sales staff but all us Digital Marketing people too!!!!!
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Comment by James A. Ziegler on December 7, 2011 at 9:35am
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TRUECAR TELLING DEALERS TO DUMP OTHER LEAD PROVIDERS
.... Not only are these guys trying to put dealers in the dumper, they are now targeting all of the other lead providers and trying to get dealers to use them exclusively... SO, APPARENTLY- IT LOOKS TO ME LIKE THIS IS NOT ONLY A WAR ON DEALERS LIVELIHOOD, THEY ARE ALSO TARGETING EVERY VENDOR THAT DOES BUSINESS WITH THESE DEALERS...
THIS IS PART OF THEIR RECENT DEALER CORRESPONDENCE...
Eliminating Underperforming Customer Acquisition Programs
TrueCar is committed to providing significant incremental sales and improved margins to its dealer partners. Due to the expected increase in customers – while also maintaining the industry’s highest quality standards – TrueCar feels strongly that its service can pick up the slack from underperforming dealership customer acquisition programs. For this reason, TrueCar recommends that Certified Dealers re-evaluate the effectiveness of their existing marketing programs (e.g., lead generation, search engine marketing, inventory listing services, print, radio, TV, billboard, etc.) and eliminate underperforming programs. By prioritizing TrueCar-referred customers, Certified Dealers can move more metal while also improving margins.I had laugh at that last line about improving Dealers margins. What do you think?
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Got a lead this morning with an unTruthful Car quote in it. I'll keep you informed. We stole one yesterday because the dealer didn't have/couldn't get the vehicle!
REVOLUTIONS DON"T WAIT!!!
@Jerry...leave my relatives out of this ;-)
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@Jim, like I said in one of my videos, If the Mafia had a sit down and tried to figure ways to extract money from the car business, TrueCar would be their brainchild.
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Comment by Keith Shetterly on December 7, 2011 at 5:31am
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@ Jim: One of the things this team has played with in the past will tell you how the finance will go. In your scenario, the shopper is given a low-ball TrueCar price for the new car, an no-hold price for their trade, AND they have PRE-APPROVED financing from TrueCar/Zag which will be required for the deal somehow. SO, they take the margins on new car and used car, AND they take the backend money, too. This is a dealer-killing strategy.
And so, as you point out, every other vendor that depends on the dealer ecosystem . . . will be dead, too, in this scenario.
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We're doing an excellent job of spreading the word. Let's face it, TrueCar ZAG is not only a threat to dealers, they are a major threat to virtually every vendor or company that does business with dealers.
There has been a handful of dealerships celebrating TrueCar deals because they were able to hold back on the trade-ins and eek out a profit in spite of the absurd deals they were actually paying TrueCar to send them. NOW, TrueCar evidentally found out these people were making a profit and took steps to close that loophole by creating "ClearBook". Now TrueCar can send you a non-customer armed with a complete deal, triple net pricing on the car they're buying AND now they will have an absurd figure set for their trade in as well.
In my mind they're sitting around out there in California in a TrueCar think tank. This is the way I picture the conversation going between TrueCar executives... "We're not satisfied just to screw up dealers' New Car Deals....let's screw up their used car business too...and maybe, piss off customers when dealers refuse to do these un-doable deals."
Of course, I would be willing to bet that TrueCar will be rolling out another program called, you guessed it, "ClearFinance" where they give the customer a finance quote they don't qualify for and can't get.
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Comment by Jim Kristoff on December 6, 2011 at 6:13pm
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You want a revolution??
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