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 February 14, 2012 at 9:13am
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Keith, don't expect NADA to get involved. They cite Federal Anti-Trust laws and Restraint of Trade violations as the main thing holding them back.
Personally, I don't see why they don't address "Data Issues" without targeting a specific company.
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Comment by Keith Shetterly on February 13, 2012 at 11:57am -
@ Thomas: I wish it would be NADA. Maybe Jim can check if that's possible.
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Comment by Thomas A. Kelly on February 13, 2012 at 11:33am
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@ Keith, What would it take to get NADA to undertake creating "universal language" that would safeguard consumers and dealers? Individual states could then tweak it?...or perhaps someone other than NADA?
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Comment by Keith Shetterly on February 13, 2012 at 10:56am
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1) We need a "standard use restriction" clause that over-rides all existing agreements with a vendor. IOW, we need something crafted by a lawyer. And this can be an addendum to an existing agreement, but it needs to be put in EVERY vendor agreement when that agreement concerns the vendor data. Legal remedy . . . that all exposure goes back to the vendor if terms violated? Monetary penalties?
2) We need a way to have vendors commit, publicly, to this strategy. A "Safe Data Vendor" list, if you will.
3) We need to educate dealers that NOBODY gets into the DMS or the CRM without # 1 and #2.
I think that's a start.
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Okay, asking all on the blog ... let's get specifics rolling here. Beginning with TrueCar, what specifically do we need to do next as far as getting the dealers educated?
What language do we need to get them negotiate?
What legal remedies?
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TC's income stream is not just dependent on dealers. They receive income on the mountains of information that they publish daily. Why should a dealer give one scrap of information to them to reuse in ANY way?....Are they supporting their claim to be the "authority" on everything automotive using data that has nothing to do with a dealers interest?....Again, why give them ANYTHING if you are paying a subscription fee?
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Comment by Keith Shetterly on February 13, 2012 at 10:28am
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@ Larry is correct. The first step is to correct the agreements. It's not as easy to get the dealers to pursue restricting the data fields if they don't have an actionable agreement to guide that restrictions.
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Comment by Larry Bruce on February 13, 2012 at 10:25am
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@David
I understand data sharing agreements won't completely stop it, but we have to start somewhere and it will slow it down.
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Great posts guys, Larry, David and Jay... Thomas. The Data Wars are on and we must keep educating dealers and associations. I am firmly convinced that Truecar has NOT changed their business plan...they are just looking at this as a delay before they bring it back. That is what I heard in Painter's interview. These people are as dedicated as ever to their original plan.
The issue still remains...why do they need access to the dealers' DMS Computers? Why do they still doggedly insist on extracting identifiable consumer information? The answer is obvious...they are just laying low until they perceive it's time to come back out. JIM
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Comment by Larry Bruce on February 13, 2012 at 10:08am
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AMEN Mike!
All dealers that are reading this post you MUST get your own data sharing agreement. You MUST make the ALL vendors understand that that agreement covers any data you send to them, DMS, Inventory, Website Behavioral data, CRM data, ILM data... Basically if it goes out of my store this agreement covers it. DEALERS ITS NOT JUST YOUR DMS DATA THAT IS BEING SOLD AND RE-PURPOSED! You MUST make the vendor understand that agreement supersedes all other language written or implied. You MUST ask an executive of the vendors company to sign that agreement AND You MUST ask them to get an executive at what ever polling company they use, DMI, Authenticom, RCI, Homenet etc to sign that agreement as well. You MUSTseed ALL your data DMS, CRM, Website data to check and make sure your data is not being sold off.
If they will not comply you have a choice to make, but make it with all the facts.
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