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 Larry Muirhead on November 28, 2011 at 11:30am

HOLY MOSES OF EGYPT!   NATALIE@  YOU GO GIRL!!!!!!!
(You are a cupcake) What sort of medication do you normally take???

Comment by James A. Ziegler on November 28, 2011 at 11:29am

Excuse me, I have been listening to a lot of conversation about how gross profit per retail unit is a thing of the past.  I am  trainer and consultant for literally hundreds of dealerships, and, without exception our profits are  extremely good... extremely. You do not have to give up gross nor CSI to have volume sales. 

Comment by Keith Shetterly on November 28, 2011 at 11:28am

Comment by Natalie Baublitz on November 28, 2011 at 11:23am

To Mark-  Holding gross seems to be a dinosaur in this industry right now. When you sell a brand with hardly any markup- i.e. appx. $900-$1,200 between invoice and MSRP on most vehicles, and your pack is over $1,000, even a MSRP deal is negative. So in order to make a profit on a new car we would have to sell it a few hundred OVER MSRP. I do not see customers lining up and throwing themselves over one another to pay over MSRP when our next closest dealer is 6 miles away (with another 10 dealers all within 40 miles) and will whore the car out for $2,000 under invoice. So everyone who is discussing 'building value' need to understand the mathematical side of the equation. New cars dealers have not given up. Customers are an ever changing breed of animals. They have more and more access to information and they are more and more unreasonable every year. I am willing to bet those of you that go on and on about gross and value are the same people that demand to buy their cars at $4,000 under invoice because you feel you deserve to.

Comment by James Carroll on November 28, 2011 at 11:22am

@Keith - That is a scary article. I wonder if TrueCar will be fielding the phone calls for all the how do I use my Nav, A/C, Audio system, bluetooth, Smart Key.....

Comment by James A. Ziegler on November 28, 2011 at 11:21am

I'd like to take a moment to re-post a post made by  Eric Damiani 2 hours ago


What no one knows, it that once ZAG pulls all you sales data
from your DMS, then they post what your lowest selling price is of each model on
the True Car site. These may not even be vehicles you are selling through ZAG and True Car.
There may be circumstances where is vehicle is sold below Invoice and that is
the price you are now competing against. You could possibly be competing against
data from your own DMS and not even know it. It’s just like ResponseLogix
controlling all your email and sharing information (what works and doesn’t
work) with other dealers. Do you understand when you let these companies access
you data and customer information, what is going on? I recently check leads we
received from AutoUSA and found that 30% were beyond our contracted radius. Leads
from any source are good if you have a reasonable ROI, but your should never
let anyone access your data and you have to check every lead to make sure you
are getting credit for bad and duplicate leads (which averages at 30%) and ones
that are outside the contracted radius. BDC and Internet Departments need to be
run as a business with accountability, control and ROI.

PLEASE READ IT AND THINK ABOUT WHAT HE'S SAYING HERE...SOME OF YOU ARE ENTIRELY MISSING THE POINT, OTHERS ARE RIGHT ON

 

 

Comment by Michael Deville on November 28, 2011 at 11:16am

lobby for these companies to play under the rules as the dealers with the same restrictions as dealers.

DMV laws and requirements, problem solved.

Comment by Mark Elliott on November 28, 2011 at 11:15am

I believe that most New car dealers have given up,and just want to move metal,and for get about building value in you,the product,and the Dealer. I.E HOLDING GROSS!!! It's very disturbing that so many Dealers have taken the path of least resistance.I, however am a used car manager,for 5 new car franchises,so I really don't mind all the fresh trades,that I don't have to go pay too much for,at the auction.I just couldn't imagine,working so hard to sell New cars,and not making any money.

Comment by Keith Shetterly on November 28, 2011 at 11:14am

Here's what a TrueCar employee had to say on Facebook:  "5) Over 200,000 vehicles will go through the TrueCar system and Certified Dealer network this year. Next year it will at least be double that. So the growth is validation that there is consumer demand for the experience we provide. Other platforms like Costco, CarWoo, AutoNation Direct, etc. are also experiencing growth for the same reasons...trying to meet the demands of a rapidly changing customer. We also have grown to 5,500 dealers (I think we had 3,400 about 18 months ago), have removed far more dealers from the program for non-compliance than have left the program voluntarily, and continue to get requests every day to join the program when market areas become available...so there is clearly continuing demand on that side of the fence too."

Comment by Larry Muirhead on November 28, 2011 at 11:09am

There are so many new articles and recycled articles about "The Tricks the Dealers Play". The reason they have to attempt to make profit (Which IS the trick)  is to overcome the decreasing profit trends most dealers are experiencing.
If we wrote back to Consumer reports as a group and expressed how we don't appreciate their Implication of the inevidable fact that you get tricked unless you buy this book and read the article. "Watch out for those tricky dealerships".
Is it any wonder the reputation of dealerships drives people to the Internet to avoid getting ripped off.
The media is telling them they WILL get ripped off with the tricks.. period.

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