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 Keith Shetterly on April 11, 2012 at 1:07pm

If everybody reads that link, I think you'll understand more of what I'm trying to convey about the size of the issue.

http://www.digitalmotorworks.com/  . . . 22,000 dealers . . . OEMs . . . parts suppliers . . . vendors . . . 

And what does this data DO for/against dealers?  TRUECar's first efforts were using it for pricing information, amongst other sources.  However, who else uses it?  Again, look at the scope:  If we shut down DMI today, would we help or hurt ourselves?  Sell more or less cars?

It's not an "on/off" problem.  It's a "help/hurt" question about a data ecosystem that each of us lives in but most of us have no idea about.

As far as identity theft . . . very good point.  However, what part do the dealers play in that?  What is the exposure to dealers through DMI?  Or anyone else?

Seems big.  However, again, that needs some evaluation.  Do we have bigger exposures, individually?

I should express something about my background that applies here.  My first exposure to this business, old as I am, was the old TI-based Ford DCS.  As an engineer.  My career goes back to data, etc., in computers, and with all these consumer databases I've read about while studying this issue, it's a miracle anybody keeps an identity.

Comment by Criss Castle on April 11, 2012 at 12:59pm

http://www.poodwaddle.com/clocks/worldclock/

Comment by Criss Castle on April 11, 2012 at 12:59pm

Yet.  But, I can feel some kind of class action law suit in the air with identity theft being the most prominant US crime as 123 people had their identities stolen in the time it took me to write this post.

Comment by George O'Sullivan on April 11, 2012 at 12:57pm

@keith DMI is caught in the middle that is for sure.  And, if we had an agreement with them specifically I would consider it.  But the contract is not with them. 

@David When this discussion all began, we turned off all access to our system with 2 exceptions Ford and SiriusXM (we had just signed the contract) we quickly recieved calls from several people and informed them that they had to find alternatives to logging into our system.  Afte we were done, we went back and reviewed the Ford and SirusXM login and we were surprised.  Right now Ford is the only company with any type of access to our system EVER.  And that access is limited.

Comment by Keith Shetterly on April 11, 2012 at 12:55pm

Everybody please read here:  http://www.digitalmotorworks.com/

Comment by Criss Castle on April 11, 2012 at 12:49pm

Thanks, George! I'm going to look into the FTP site details as an alternative. That information was not offered in the email notification. I'm with you that if DMI didn't use that information, they wouldn't spend time and resources in retrieving it.

Comment by Keith Shetterly on April 11, 2012 at 12:49pm

Good!  There's an alternative.

DMI is the company in the middle of just about every corporate DMS access.  It's what they do.  For everybody doing that, not just TRUECar.

And this is a problem we have to decide how to tackle, as--and I want to make this clear--we do NOT know what is positive or negative for dealer sales from the use of this data.  Are we ready to replace Edmunds, etc. with our own marketing funds if we shut them all off?  I don't eve know, really, the true size of the problem.  I'm still picking up pieces of my head from the "data leak math" I did earlier. ;)

Here's this great example in this blog now:  Hyundai's all over the US turn on the Sirius demo via this DMS data interface through DMI.  Does that hurt the customer?  Not so far.  Does that hurt the dealership?  Not shown so far.  Does it help sell cars?  As much as any feature does, I guess, though satellite radio is pretty popular.

Want a shock:  Look at your credit card agreements.  One or more of them will say they will share customer info, including purchases.  http://www.forbes.com/sites/moneybuilder/2011/07/11/this-week-in-cr...

What I'm saying is that we need to be on top of our data.  However, I think the problem is way bigger than we know, and that the ramifications--positive AND negative--are absolutely NOT known.  

This problem isn't a TRUECar problem.  It's a dealer problem.  And we don't even know what to fix or what the fix is.  Yet.

Comment by David T. Gould on April 11, 2012 at 12:46pm

George, your in depth understanding and participation is greatly appreciated. I (we?) would be grateful if you would share some more specifics of how you monitoring and regulating DMI's activities.

Criss, I am one of those Conspiracy theorists! I absolutely believe that DMI (and others) are capitalizing on data outside of the purpose for the initial polling. 

Comment by George O'Sullivan on April 11, 2012 at 12:38pm

Criss, the SirusXM program is pretty good and our customres like it.

You can post on the FTP site for SiriusXM,a list of your used cars, and a list of your sales. So they do not have to download anything from your DMS.

We discovered that Digital Motorworks was downloading everything from our database, from the SiriusXM logon!!!  So we immediately cut them off and arranged to post up our own information.

When I contacted Digital Motorworks they promised that they would not use the data.  But our contract is with SiriusXM NOT Digital Motorworks. Digital Motorworks said they download the same reports from every dealer they dial into and then distribute only the information contracted for. I have never known a "Successful" big company to waste time and resources on things they did not need.  If they download all of that data, spending all of that time logged into dealers systems and downloading data they are not going to use to hard drives on their computer network.  Then they are wasting resources at the company and their CEO should be fired. I do not believe that a company of that size is doing all of that work without benefiting from it. 

Remember they were one of the big suppliers of info to TrueCar initially.  My father always told me you would be judged by your friends.

Comment by Criss Castle on April 11, 2012 at 12:35pm

@Keith, RDR is just for new Hyundais sold. This is a newly offered program for used cars. It's being offered by XM to Hyundai dealers for all used cars on their lot that have XM. But, the dealer must allow DMS access to participate. There is not an alternative.

To me, it's a case in point where the dealers' arm is twisted into doing something they may not want to do in order to participate in a program that benefits their customers. So, in order to serve customers better, dealers are forced to allow access or don't participate. Notice the statement about it being voluntary. Is that so that when the dealer gets sued for giving the customer's data to XM that XM is relieved of any harm?

I don't know. I just think it's clearly a way to manipulate the auto dealers.

Just because DMI is so big doesn't mean they are so great. Perhaps we should be looking at what they are doing with all of that information instead of just TrueCar. How powerful is that to have the largest access to auto dealer data at your fingertips? Amazing.

Conspiracy theorists would have a hay day with this. It's my dealer principals decision as to what he wants to do, but I think it's ridiculous that a dealer HAS to agree to allow access to participate. The reality is they can get the information from the state vehicle regisration information, where they can't see finance terms, social security numbers, etc. All they need is the customer contact info. That's it really.

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