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 David T. Gould on April 11, 2012 at 12:27pm

Criss, I am with you. Dealers are not getting paid for providing valuable information (data) to an outside vendors (XM). Vendors are making Billions of dollars from sales, organization and distribution of data that dealers are giving away.

Consumer's could easily log in directly to XM in this case to sign up for a special incentive offered by a manufacturer. There is absolutely no need for DMS access.

Keith, I get the frustration. Continuing on as it was is exactly what TrueCar and those preying on data are praying for hourly. Dealers need to understand "A" and do "B" to get this "monster" under control. They are Ground Zero for the really important data. (price vehicle was sold for, trade value, structure of deal) This Ground Zero information is the the information I refer to when I say no one besides the dealer needs access to individual deal results. I have no beef with anyone with this, I am not selling or promoting any product, this is just good business.

Comment by Keith Shetterly on April 11, 2012 at 12:25pm

That's interesting.  The DMS access report is (usually) done by the dealership's IT department.  You might be able to call the DMS company and get it.  However, they probably won't be able to tell you the "why", and also perhaps even "who".  Just that there is an authorized access.  And that is often the problem, that access was granted was granted somewhere in the history of the dealership by the dealership.

As far as the Sirius access goes, this is for the demo set ups and the trial.  I guess it's on you, then, to find another way to do that.  Maybe there is one?  

I'm at a Hyundai dealer today, so I asked about it.  I was told the trial period starts at RDR.  I guess they have DMS access set up.

Essentially, if this is where you draw the line, Criss, I'm with you in spirit--however, you should also now go and dig out who/where your DMS is being accessed for everything else.  Otherwise, I say check the agreement and move on.

Thanks.

P.S. DMI is in some large percentage of dealerships' DMS, by the way, as extractors for just about everybody big.

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

I'm of the mindset that dealers can report the cars sold just like we report new cars sold. I don't think XM needs to access the DMS to get the info, they just WANT to access it. We have to report new car sales to Hyundai. I'm sure to get a customer a 3 month free trial, we could report the used cars to XM. Giving them DMS access allows them ALOT of information about their potential XM customer, don't you think? And what do we need to tell the customer about this? Do we tell them that we've already agreed in advance to hand over their information? Isn't it the customer's right to refuse that? It may seem simple, but I would want to opt out if I were a customer. I would. I opt out of stuff all the time.

What about the responsiblity on the DMS system to be able to allow "only" access? How come the DMS companies get off so easy with everyone having to work around them? Shouldn't the DMS company provide reports to the dealers stating this is who accessed the data and this is the data we allow them to retrieve. Why is it total access or nothing at all? Or is it?

Comment by Keith Shetterly on April 11, 2012 at 12:08pm

My apologies to David and to the blog for my heat on this.  I just wonder, how big is it?  Is the data horse out of the barn?  Is the data irrigating a field of customers (via 3rd parties) that our own marketing cannot tend to?  Is it being used against us?  Is it both?

My current feeling is that we don't KNOW what the data is doing, for or against us, and I'm not sure at all that we can stop it.  And whether sales would increase or decrease if we did.

Very frustrating.  

Comment by Keith Shetterly on April 11, 2012 at 11:58am

David, sorry, my bad.  You didn't deserve that.  I am just tired of all this "not doing anything".  I reviewed a DMS the other day that had 47 access "points".  And I'm not sure that was all of it.  17,000 franchised dealers x 50 = My Head Exploded.

Either we put up, or we shut up.  If we can't get control of it, then we need to allow access in the future on what makes sense for the business.

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

However, nobody really understands "a" and lots don't seem to want to do "b".  And so, in order to compete, do you "??Really?" want to tell Criss not to have SiriusXM on a Hyundai??  "??Really?"

I've had it with all this Data Handwringing.  Either we step up and get it under control, or we accept the risks as they come.  I'm trying to arrange a review of the general data "leaks" that are typically authorized already at most dealerships.  If I get that, I'll write back.

Comment by David T. Gould on April 11, 2012 at 11:55am

What kind of "crap" Keith? (Not my intention to be irritating) This is another example of unabated dealership data leakage. 

Comment by Keith Shetterly on April 11, 2012 at 11:52am

The use is obvious.  If we're going to worry those gates, then let's understand something:  THERE ARE NO GATES.  This has been going on far too long, and DMI is about as deep into it as you can get.  I submit that no one should authorize further access unless they are a) willing to accept the risk of what has already happened or b) step up and audit the DMS access.  Flying around the issue "???Reall?" doesn't do a damn thing.

Comment by Keith Shetterly on April 11, 2012 at 11:48am

That kind of crap is really irritating, David.

Comment by David T. Gould on April 11, 2012 at 11:45am

??? Really? Just open the DMS gates... No question about what data is necessary for their particular use? Ugh... 

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