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 James A. Ziegler on November 28, 2011 at 1:36pm
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There is an old joke... well not all that old but relevant... "How does AutoNation get a dealership to make a million dollars a year? Answer... "They buy one that was previously making three million under private ownership."
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Comment by Jim Kristoff on November 28, 2011 at 1:22pm -
@ Mark Elloitt
Amen brother............
If my math is correct? They have just sold their 300,000 car,at an average dealer fee of $299.00 That comes to $89,700,000 in fees,and save comsumer's over 1 billion dollars. Dosen't sound like a great deal for the dealer...Maybe I'm wrong?
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Comment by Mark Elliott on November 28, 2011 at 1:14pm
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@Chad Collier
If my math is correct? They have just sold their 300,000 car,at an average dealer fee of $299.00 That comes to $89,700,000 in fees,and save comsumer's over 1 billion dollars. Dosen't sound like a great deal for the dealer...Maybe I'm wrong?
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Comment by James Carroll on November 28, 2011 at 1:07pm
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@Bobby good points... however, coming from an advertising/television background, when profits are low, and bottom line gets hit. Where is the first place the bean counters hit?? Bingo... the marketing/advertising budget. I think the real issue is not only generating traffic, but generating the right traffic. Traffic where you have an opportunity to make gross. Don't fall prey to the consumer logic of the more you sell the more you make... not if they are $2k losers.
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Comment by Chad Collier on November 28, 2011 at 12:58pm
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AutoNation COO Joins Board of TrueCar
http://blog.truecar.com/2011/08/04/autonation-coo-mike-maroone-join...
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Comment by Jim Kristoff on November 28, 2011 at 12:55pm
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@Bobby Compton....
We ALL want market share....BUT not at ANY cost.....profit seems to be a dirty word theses days.....
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Comment by Michael Deville on November 28, 2011 at 12:50pm
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Suggestion: all go and check your agreements. You have a virus scan in yiur computer, rescan your agreements and protect yourself.
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@Bobby, I love it when a customer goes to carmax,before coming to my store. It seams,at least in this market,that 80% of the time,carmax is trying to steal the trade,or,just putting average money in a nice car. A lot of times I would have to pay $1000 to $1500 more,at the sale,and pay fee's to get the same car.But the customer preceives,that's what their car is worth. So, I may give them $300 to $500 more than carmax, and put a deal together. Oh, and by the way,we have been worried about the price of the trade "the most emotional part of a car deal" The price of my car, really isn't an objection any longer.
Thank you Carmax...LOL
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Comment by Jim Kristoff on November 28, 2011 at 12:43pm
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- I agree Bobby.....yet the "big boys"....(public consolidators).....want market share...market share...market share...at ANY cost.....
- Comment by Bobby Compton 10 minutes ago
Two objectives for a dealers success, let alone any business,- it's been this way from the beginning of time!
#1 How to drive the traffic (Generate Leads - Live Customers) - Create a dominant presence in the community by getting involved, be the dominant dealer in your marketing and advertising efforts online and offline. Bottom line, be tenacious and consistent in your efforts to drive 1st party traffic to your dealership and website.
#2 Have the right leadership and a solid team on the same page of process, accompanied with continual training and improvement.
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You're spot on Michael...NOW here's a question posed on another forum to me.
HOW MANY of your other vendors have a "Trojan Horse" clause hidden in their contracts with the dealers that says something to the effect of... "We can share your data with other companies that are affiliates of our company?"
The answer might surprise you how many of you have signed contracts that allow this vendor to share your data with another company you might not even be doing business with.
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