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 Larry Muirhead on November 28, 2011 at 11:46am
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YES.. Viral for sure. We are passionate about the future of the industry and our livelyhood within it.
I'd love to pull the plug on our ZAG/ TrueCar lead provider but it would just take our store out of a growing trend of offers.
I will keep my prices in the YELLOW and RED though. That's the solution. If the dealers see how much money they are leaving on the table things may change.
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Comment by Keith Shetterly on November 28, 2011 at 11:41am -
Sigh. To me, this is not about gross profit in a deal, actually. It's about a fundamental change to the business. Bobby, you get that, in this thread, most of all, I think. I just disagree that the answer is to just "sell better" which some are promoting, or at least it appears that way. It's "sell differently", for sure, when the consumer has more information than ever tilted against success of the dealer.
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Comment by Mark Elliott on November 28, 2011 at 11:40am
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@ Bobby...I'll take DOMINATE for $1000!!!
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Comment by James A. Ziegler on November 28, 2011 at 11:40am
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Jerry Thibeau, excellent research in perspective THANK YOU. I hope everyone reads and digests the information you just provided.
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Comment by Natalie Baublitz on November 28, 2011 at 11:40am
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Thank you for the compliment. I like cupcakes. But before I run out and buy some for everyone, what is the invoice?
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Comment by Jerry Thibeau on November 28, 2011 at 11:38am
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Keith, Nice find with this article: http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN...
Here are a few quotes I pulled from the article. I then added some commentary.
“He wants to make TrueCar a provider of critical price information, in line with his vision of dealerships where new-car showroom sales staffs will be obsolete.”
This is bad for the manufacturers since having a good sales force is what convinces a customer to buy a Honda over a Toyota, or vice versa.
"Things are fundamentally changing so fast," Painter says. "If dealers and manufacturers don't embrace new ways of communicating with the customers, they won't survive."
If dealers don’t embrace True Car, True Car won’t survive!
“Last week, TrueCar agreed to buy ALG, formerly known as Automotive Lease Guide, from DealerTrack Holdings Inc. in a deal valued at $83 million. ALG's forecasts of vehicles' future residual values are used by finance companies to set lease terms.”
This will open up a whole new can of worms for dealers, guess what’s coming next?
“"The car sells itself at that point. It's effectively a commodity," he says”
Price commoditizing the automotive industry is not good for manufacturers or dealers!
“Painter describes himself as a person who wants "to get on with it." He dropped out of West Point and the University of California, Berkeley.”
I say we help him drop out of the automotive industry as well!
“He says he plans to acquire more companies this year and, over the next 18 to 24 months, launch other companies that focus on simplifying auto financing, leases, insurance and trade-ins.”
Once he succeeds with this, he’ll be going after every other profit center in the dealership.
“TrueCar, founded in 2005, "has been my longest-running gig," Painter says. "I hope to be running this company for the next 20 years."”
At the expense of hard working dealership personnel! Will dealers really let this man dictate the way they run their business?
KILL THE BEAST!
Don’t let this man or his company profit off your dealership!
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Comment by Mike theCarGuy Correra on November 28, 2011 at 11:38am
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The argument about sales process, selling value and how some of us are even boasting of our superior sales ability and arent affraid of those nasty ZAG prices is all off topic. Before we even have the chance to demonstrate our incredible sales prowess many customers see prices online at sites like TrueCar, Edmunds, CarsDirect etc etc etc. The huge problem with ZAG is non disclosure to the customer. They dont share that the prices they display arent always due to the ZAG pricing program, they may be reflecting a huge fleet deal that has nothing to do with a consumer purchase and uses incentives possibly not even available to consumers. As with many special incentives, there may be restrictions to its availability but ZAG takes none of that into consideration, they simply pull your data and display it for the world to see. They also dont EVER inform the consumer that ZAG will make $299 from the purchase of the vehicle, most states have some laws regarding head hunter or 'bird dog fees' and at least one state HAS gone after ZAG for violating their bird dog laws. If transparency is really what TrueCar is promoting, why not give a more detailed explanation to the consumers they are intentionaly manipulating? They have made millions by playing both sides and continue to grow as they add more recognized brands to their stable and increase their negotiating power. We can all argue how the salesman ship is nearly a lost art form, how to better seel the value of our products blah blah blah, the issue in THIS post is how ZAG has driven pricing down to the absurd in many markets and what can be done about it. ZAG is truly a Hindu God with many faces, selling their huge customer base and potential sales volume to dealer eager to find business while enticing consumers with the lure of 'real pricing' and pandering to the fears of consumers about car dealers and validating the idea that 'those car dealers are all scumbags, but you can trust US'....
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WOW! has anyone noticed this BLOG has gone Viral in our industry? 1600 views, that's 1600 unique visitors no ones IP Address is counted twice... a lot of interest here. Getting about 8 views a minute right now.
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@ Bobby Compton...VERY WELL SAID!!!!
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Comment by Michael Deville on November 28, 2011 at 11:32am
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Continue to allow these companies in your DMS, All I can say is good bye to you. Market to your customers, and dont worry about the neighbors dog. If YOU ALLOW THE PITBULL IN YOUR BACKYARD, THEN COMPLAIN WHEN ATTACKED, SHAME ON YOU!
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