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 January 7, 2012 at 9:41am
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I''LL ASK AGAIN...
Ziegler request... keep it brief and do not be emotional or insulting.
If you were allowed to have a private meeting with top-decision-makers at USAA; what would be the top three reasons you would give them to persuade them to sever all affiliations with Scott painter and TrueCar?
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Good points guys, I am sure that USAA is feeling embarrassed and sheepish at the highest levels about their TrueCar affiliation with the ongoing Train Wreck and possible impending crash of the entire fiasco with Scott Painter at the Helm... wonder how they will explain that at the Needham LLC conference next week.
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Comment by Randy Fry on January 7, 2012 at 9:18am
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Jim,
i would ask them if they are ready for TrueBanking or TrueInsurance to kick in and start showing their customers how over priced and how USAA is ripping them off and that if they want to stay in business that they NEED to keep lowering their rates every week....... or get out .........
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Comment by Michael Paulson on January 7, 2012 at 9:10am
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@ Ziegler request: They need to start looking now because they don't want the beast to crash without a backup. Point out how the business model is flawed, how the dealers/manufacturers/states are all bucking hard. Point out the privacy concerns for their members. The IPO is likely to be a flop. Just the facts maam. I'm sure they will see the train wreck coming when presented with the complete picture. USAA is VERY committed to its members. If you can have this meeting, I'm sure it would be productive.
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Comment by Thomas A. Kelly on January 7, 2012 at 9:03am
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Thanks Michael!...Tom
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Ziegler request... keep it brief and do not be emotional or insulting.
If you were allowed to have a private meeting with top-decision-makers at USAA; what would be the top three reasons you would give them to persuade them to sever all affiliations with Scott painter and TrueCar?
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@Thomas A. Kelly: I would like to see a raise of hands, how many dealers have been contacted by Zag/TC and been asked to adjust/change prices. Have you ? Any Internet Manager who was watching the store had at least monthly discussions with the ZAG rep where they evaluated your locat pricing position as compared to the other dealers. This would be a car by car discussion. The purpose for the conversation was to predict the lead flow, or at least your percentage of the lead flow. The discussion never went "ok mr IM, your price is much lower than the competition, so you can feel free to raise it by $300." In other words...it was a race to the bottom. This is my experience with ZAG. I would assume that the pattern continued under the TrueCar name, but have no experience with that.
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TC Dealers: (or any dealer wanting to compete with a TC dealer) Thinking about shaving the trade to keep the top line competitive as has been suggested? Think twice, your internal documents will show ACV. The smaller the top line the less revenue for the states.You may be able to fool the consumer but eventually the states will want their tax revenue and it won't be pretty when they come looking for it....Just my opinion and perhaps I am all wet (my wife says I am)
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I/We/You can read and sign all the contracts we want.....TrueCar/Zag can say what they are....use all the words their attorneys think will keep them safe....but just like the dealers, they are accountable for what they DO not what their policies, press releases or contracts, says they do. I would like to see a raise of hands, how many dealers have been contacted by Zag/TC and been asked to adjust/change prices. Have you ?
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Excerpted from: http://www.carnewser.com/news/1071420_truecar-is-coming-under-fire
By Bryan Usrey Contributing Writer January 6th, 2012
"We are certainly open to changes that enhance our ability to comply with a particular state's needs and to more accurately reflect what we do," the company said to Automotive News. "TrueCar is not a broker, traditional advertiser or lead generation company. We do not arrange or negotiate sales for dealers, nor do we advertise vehicles for sale.”
They "don't arrange or negotiate sales for dealers"???.... If it were proven that they DO, besides liars, what else would that make them if anything?
Read a previous post below:
David’s points are very well put. Something he said really caught my attention,
"Zag reps weren’t calling me every month telling me to lower my prices so they could fundamentally change my business for the better. They wanted me to bottom out my pricing to trigger Zag sales because that’s the only way Zag generated revenue."
This is the second time I have heard a dealer say this in the last 24 hours, referring to their rep calling them and asking them to adjust their prices. I heard one dealer make a public comment "3-4 times a week we get a call, we need you to adjust your price" from the rep. At best this activity by Zag/TC should disprove their claim as not being brokers and at worst; it appears to be an attempt on their part to fix a price because the rep/Zag has pricing info from all participants in their program at hand. Since David was the second dealer in such a short period of time to make that claim, I am beginning to think there may be a pattern here and not just an event.
1. Can a rep call one or any participant in their program and advise them in any way as to how they should price?
2. Does the fact that they are seeing all the prices when they make that call have any relevance on the issue?
3. If they did/do make calls to dealers and ask them to change/adjust pricing, does that in and of itself make them a broker in most states?
Anyone have a qualified opinion?
Thanks, Tom
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