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 Michael Timmons on February 15, 2012 at 7:22pm
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@ Jim. TRUECar is everywhere these days, but not because a PR firm is vying for media exposure. It is everywhere mainly because you continue to write about TC and keep it top of mind with dealers, the industry and reporters looking for a story. The people that say any press is good press obviously didn't walk the halls of the NADA convention as a TRUECar executive. :) Trust me, it would make my job easier without all the media attention. I will state publicly that the last thing TC wants is to rally consumers against ANY dealers and spread further distrust in the industry. We listened to what our dealers were having issue with and changed our business model in many areas to eliminate their exposure and adjusted our pricing model to better distribute quality leads and be less price driven. We are evaluating and changing many areas of our business to be a better vendor partner for our dealers. TC has also contacted the companies that we use to pull data and will only be extracting fields for sales matching. Lastly, as I promised you I will post the letter from these companies as soon as I receive it.
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Comment by David T. Gould on February 15, 2012 at 7:18pm
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@ Thomas, that is not crazy. That is the way it works. The crazy part is that they have gotten away with it this long. Unfortunately, it is legal as the arrangement stands. Time to change that arrangement.
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George, You are HOT on the trail here. Pinning down a few companies, those that initially "dial in" to pull the data, verses trying to enforce agreements across the vast numbers of those using the data is a practical solution. I prefer that the pricing and other unnecessary fields not even be accessible at the time of polling, but if restricting the middlemen gets the job done. It will work for me. Thank you for your contribution towards a SOLUTION to this continuing issue. DTG
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Comment by Thomas Mitchfield on February 15, 2012 at 7:14pm
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@george, that is a crazy story, thanks for sharing. That doesn't sound like something that should be legal
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Comment by George O'Sullivan on February 15, 2012 at 6:47pm
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Due directly to the conversations here and other sites. We recently ran security checks and found one of the very few companies that we allow access to our DMS, downloading info they had no need for. After cutting them off, and investigating we discovered that:
A. They had subcontracted out the data extraction to a third party.
B. Our contract was pretty specific about what information the company that we contracted with could extract.
C. The third party company that was extracting the data was pulling all the data they could.
When we contacted the company we were contracted with, they claim they are only getting the data we contracted with them for. (Probably true). When we contracted the Data Pulling company, they claimed they just used standard reports and only passed along the data that was required. When asked what they did with the rest of our data they said nothing, it is held for 30 days and then deleted. (Most likely not true).
Here was the key issue, we told the primary company what they could take, but we do not have a contract with the company that actually dialed into our database!!! This was our fault, the contract allowed for 3rd parties. The loophole is that since the third party company that dialed in passed along only the information that was contracted the contract was not violated. And as long as not of the Personal identifiable information isn't passed along to anyone they will not violate the agreement.
However, now a large chunk of our recent deal data sits on the server of a company that we do not have a contract with. Though they cannot use the PII everything else is there, and the loopholes are big enough to drive a truck through. They assured us they would never pass any data along without permission, that we should just trust them, they are a big company and do this for lots of dealers. I have never known a large company to take extra time to do something repeatedly, and take up resources without a payoff. But, they are learning the "Scott Painter" wink and nod.
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Comment by Jay Prassel on February 15, 2012 at 6:25pm
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TrueCar seems to be everywhere in the press. I get several Google Alerts every day. Here's one that was interesting:
http://www.techdirt.com/blog/innovation/articles/20120213/040021177...
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Comment by James A. Ziegler on February 15, 2012 at 6:15pm
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New TrueCar Tactic...
In case you haven't noticed, suddenly Scott Painter is everywhere.... interviews with anyone who will give him a venue. I'm theorizing they've hired a PR Firm to get him media exposure like Cnn, Time Magazine, even Clark Howard was dumb enough to drink the TrueKoolAid, and the NY Times interview. Smiling now because this is exactly what everyone was expecting. These people still don't get it.
The main tactic here is to try to rally the consumers against the dealers. To spread distrust (further distrust) and further blacken dealers image and reputation. This is the TrueFeeling and the TruePhilosophy of Scott Painter and Company.
In the end however, he's fueling fires and pissing off more dealers that were sitting on the fence.
GET OUT OF OUR CUSTOMER DATA INFORMATION TRUECAR!
Consumers need to hear the real message... TrueCar, and others, are insisting that dealers give up consumer identifiable data and information about you. Dealers are NOT rebelling against low prices or negotiating, it's about protecting consumer privacy and consumer identity. Truecar insists on taking customer information and we won't give it to them, no matter how much they swear they're intentions are good.
Scott Painter is showing severe signs of wear and tear as his dream company is being flushed and he's swimming hard, fighting the swirl. How many times do investors have to be duped by his dreams and schemes that end up this way? You can thank Steven Dietz and GRP Partners for the current "Cluster" (adjective) www.GRPPartners.com. What kind of rational investment group would lead investors to follow Painter after his previous track record???? How many companies has Painter flushed and Steven didn't notice and still promoted him? That's how it appears to me anyway. What do you think?
Here are two Pro TrueCar columns in major publications in the past couple of days, both written from an anti-dealer perspective yet without quoting/interviewing dealers, consumers or state regulators AND Scott Painter continues "Bashing Car dealers" in the way he has for fifteen years we've known him, he hasn't changed..
http://moneyland.time.com/2012/02/14/buying-a-new-car-let-a-website...
http://www.nytimes.com/2012/02/11/your-money/car-dealers-wince-at-a...
In the end, and the end is upon them... it won't be us , the dealers and industry people that brings down TrueCar, ity will be Scott painter and Steven Dietz who lead investors over the cliff... AND , USAA...USAA you should be ashamed of what you've gotten your customers involved with.
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Comment by Peter A. Bond on February 15, 2012 at 6:14pm
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Frankly, the dealers that do business with True Car scare me! They have chosen to take the route of least resistance and have "given away" all the reasons to be a dealer. My question is "Have you lost your confidence in making a decent profit or have you lost faith in your ability to make a profit?" I suggest that you pull every deal you've made through True Car and do some simple math including their fees! I would then ask if Red Flag rules among others that open huge liability for you might be a reason to reconsider before it is too late!
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Actually several of the DMS Providers are also aggregating and redistributing data too....
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@ Eric, the DMS providers have been very quiet during all this. Not comforting.
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