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 Jay Prassel on January 27, 2012 at 12:12pm
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@Thomas, great point on the privacy issues. I have not only worked as a profitability consultant, but also as an expert witness for dealers on compliance lawsuits, mostly payment packing, deceptive practices, advertising, etc. I have had many calls and emails from dealers lately about sharing customer information via the DMS.
The question of what Privacy Notice should be used is a complicated one and I still don't have the complete answer and several discussions with some industry lawyers. Prior to the January 2011 changes, we had the simple, one page Notice that either stated that you shared customer info or did not.
Now it's very complicated and a little confusing; even the 4 or 5 templates offered by Reynolds & Reynolds probably don't cover what a dealer needs to protect themselves. Not only do we have to disclose that we share data, but do we share with affiliates or non-affiliates, what info are we sharing and what is it going to be used for.
We also must give the customer an "opt-out" option. It is my recommendation that any dealer allowing access to their DMS system that they seek help from their State Association or the CarLaw lawyer, Tom Hudson at Hudson Cook,LLP.
Remember, it is ultimately the dealers' responsibility, not the third-party vendor, to be in compliance. To be continued......
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Comment by Thomas A. Kelly on January 27, 2012 at 11:56am
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Comment by Ralph Paglia on January 26, 2012 at 5:37am
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Comment by James A. Ziegler on January 25, 2012 at 11:07am
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A Chrysler dealer I do business with recently we had an audit of of DMS... he is a substantial dealer and we found more than 87 different vendors extracting Data from his DMS. Some of these vendors he wasn't even doing business with anymore. Data Wars are heating up.
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A Toyota Dealer Writes to me...
Jim, Thanks for stepping up concerning not only Truecar but all these other Internet pirates who have figured out a way to become car dealers without a franchise or any other of the costs involved in being a brick and mortar retailer.To me it is the electronic equivalent of just lurking around my dealership and greeting My customers when they arrive and then coming into the store with them under the pretense of protecting them from us in case we were going to try and make a profit.
They claim to have facilitated 235,000 car sales last year as if those cars wouldn't have been sold without them,and at least $299 per car ,they cost dealers over 70 million dollars in income.It seems that they find weak dealers who are incapable of selling cars in their own market and convince them by selling cars into everyone Else's at fire sale pricing that they will become more profitable.
I am a single point dealer who started as a car wash kid almost 50 years ago and have earned and built my store by the old fashioned way but I am not blind to the opportunities provided by the Internet and we use it everyday.
Paying these people a blackmail fee to keep them from directing my customers to a store who has "signed" up to be their delivery service is bullshit and then demanding customers proprietary information is just the tip of the iceberg.
Next they will be offering Financing services,extended warranty,certification for Pre-owned,and other sources of our income.I think the dealers that are signed up with these people should just add the 299 to the transaction price and pay their sales staff what they have earned.
In many cases the customer will show up here with the "TrueCar Deal" anyway and we will match it if we have to and I won't be paying them a nickel but I am sure that just helping the customer will be enough of a reward to them.
First the Manufacturers should get enough balls to stand up for the guys that invested millions of dollars in facilities and improvements to service their products.Some of the manufacturers and dealers are convinced that this the new way and we had better get on the wagon or be left behind but I am a car guy, we are successful because we have spent years developing relationships with our customers and I am not going to pay the overhead for people that intercept my Internet customers and then demand payment from us for negotiating "No Profit" transactions.
The customer can research invoice cost on any car without the TrueCar and like companies.Take back your store and stand up for yourself and the income of the employees that have helped build your companies.
Dealer Name Withheld
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Clark Howard, shooting from the hip in his article today.....read it and post your comments about his "reporting". I did!
http://www.clarkhoward.com/news/clarkhoward/cars/honda-has-beef-tru...
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Comment by Heather Graham on January 24, 2012 at 10:29am
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so last week someone (Jim?) posted newcars.com - a member of cars.com - and commented on how a section was being powered by TC. So I looked at it and sure enough it was. Going back to look today - that reference is gone! Think just the words are gone or the entire association w/TC (lol)?
I have a couple screen shots, but system is not letting me upload them at the moment.
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Comment by DealerELITE on January 24, 2012 at 9:49am
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32,062 view the world record on any Automotive Social site.
The record keeps growing
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Comment by Randy Fry on January 24, 2012 at 8:41am
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Stick, i would not use TrueCar even if Painter paid me 299.00 for every car that it sold.......... .........................
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Yes they are Keith. Suprisingly, if you send in proof (ie screen shot) that the lead they are billing you for came in via another source first (w/in 30 days I think), they will remove the charge. While it is tedious to research, it's worth it. Savings of $900 per month average (per store that I manage)! I doubt that is widely practiced and it's certainly not publicized by TC.
Tom -if you send me your email address, I can send you the most recent info I received from TC regarding what data is pulled/how long/etc. It's in a pdf and I couldn't get it to copy to post it here.
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