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 James A. Ziegler on December 1, 2011 at 9:58pm

Hello everyone  I am working onsite at a Toyota  Dealership. Sorry I haven't been more active here.

Comment by Jerry Thibeau on December 1, 2011 at 9:11pm

Revenge of the Phone Ninja! 

Death to the beast

Comment by Keith Shetterly on December 1, 2011 at 8:14pm

@ Mike:  What we need is a message to those investors.  TrueCar/Zag will let you out of an agreement . . . and 5,500 dealers lost due to this is a big message . . . regardless, let's take them OUT of the data.  LET THEM SCRAPE.  And let's start a discussion on/with DealerTrack and what THEY are now obviously doing with the data. Who else can folks work with?  DealerTrack has competitors.  TrueCar has . . . on or off switch.  

Let's turn them OFF.  Thanks!  :)

Comment by Mike Warwick on December 1, 2011 at 7:35pm

Even if we get them out of our data, they are not going away.  Before we gave them the keys to the castle, they were scrapping registry records for transactional data. What we can do is take away their revenue stream and make them a lot less attractive to VC money and Wall Street. Imagine saying to every customer with a Truecar certificate, "Oh, I'm sorry you have that.  I could have saved you an additional $299 but I have to honor that price and send that $299 savings to Truecar instead of giving it to you."

Comment by Mike Warwick on December 1, 2011 at 7:24pm

Not sure where my post went but the long and short of it was that on 25 Truecar deals last month, our average gross was under $200 after paying Truecar and before paying the salesperson their mini.  I have never been a fan of ZAG or their new incarnation Truecar.  I can remember when ZAG used to try to tell us where we had to price our cars, that's what caused their initial slide and forced them to rethink their business model.  They got around that by creating the Truecar piece which basically says, "Your competitors are $500 under invoice but go ahead and price however you like.  We're only going to show the top three dealers and we may suspend you for not generating enough deals but we don't tell you how to price." 

While I build my case to ownership to move on from Truecar, I'm also thinking about ways to combat them online. I'm thinking that an SEM campaign built around Truecar's/ZAG's keywords with a landing page that describes what their intentions are and why we would rather give the customer a $300 gift card than pay Truecar a fee. If I'm going to give someone $300, I'd rather it go to our customer than venture capitalists in CA.  If we look a little deeper into what dealership's do in their communities, I think we can make a very compelling case why turning dealership's into convenience stores isn't the way to go. Money for a softball team - sorry can't help you - call Scott Painter.  High school needs a new computer lab - sorry, no money - call Scott Painter. Help raise $150,000 for Breast Cancer Awareness like we did last month, sorry our margins have shrunk and we need to cut back on giving to the community to remain competitive. When we make a profit, we allow our employees a better standard of living and pump that money back into our communities. What the public doesn't understand is that the profit margins on cars, especially new ones are razor thin. Please tell me another industry where you can sell a $25,000 product and make a $150 commission.  I do surveys and I always like to ask the customer, what do you think a fair commission on a new car purchase should be.  Over 85% think a "fair" commission would be $350-$400. Customer's have no idea that the person who sold them their $32,000 car made a $150 mini. Transparency has infected every aspect of the car business except one - the general public still thinks we make a ton of money selling cars so there is always a little more room to grind.  There has to be more room, Scott Painter said so...

Comment by DealerELITE on December 1, 2011 at 7:08pm

Jerry we can not wait to view the video

Comment by Jerry Thibeau on December 1, 2011 at 7:04pm

Great news, I just finished editing a new video and it should be ready within the next 30 minutes.  I am coming back with more punch and I am going to stab the beast!

Comment by DealerELITE on December 1, 2011 at 6:47pm
10,118 views are the most every on dE!
Comment by Keith Shetterly on December 1, 2011 at 6:09pm

@ Steve:  I agree with all you say, with one exception.  I'm not sure the horse is out of the barn, especially if it is "de-saddled" from the Dealer's data.  

And that is actually a few horses drawing a coach, as DealerTrack is in there, too.

Depends on what the dealers want to do; more than that, it depends on what the dealers KNOW to do.

Zag/TrueCar isn't YET a requirement to do business.  Until, if ever, it is, I'll firmly recommend NO to anybody who asks me.  And, as it turns out over the last few days, to a LOT MORE who didn't initially ask me!  :)

Thanks.

Comment by Keith Shetterly on December 1, 2011 at 5:55pm

Woooohooooooooooooooo!  TEN THOUSAND PAGE VIEWS!!!!! At 4:45pm Central Dec 1, 2011


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