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 January 5, 2012 at 5:46pm

Based on the wording from their vendor agreement and website "privacy" disclosure they can market a dealer's  customers to their competition even while they are TrueCar "members". They can also distribute a dealer's hard earned customer list to any party they want to call partner or affiliate for them to pummel them with more offerings. This is not good. I don't believe Scott Painter will be presenting this side of TrueCar in NY at the Needham and Company 14th annual Needham Growth Conference January 10 2012.

Comment by Keith Shetterly on January 5, 2012 at 5:41pm

The whole agreement is over on ADM in this post as a .pdf, by the way.  Apologies to ADM and to DE for "cross pollinating".  :)

http://www.automotivedigitalmarketing.com/forum/topics/zag-certifie...

Comment by Keith Shetterly on January 5, 2012 at 5:40pm

@ Eric:  I believe they have it.  However, I'll email it to them.

Comment by Keith Shetterly on January 5, 2012 at 5:16pm

I was asked to go through the statement on the agreement.  

"Zag will not use such information in order to initiate marketing-related communications to any of Dealer's customers other than those customers who have used or otherwise interacted with a Zag Program"

means

"Other than those customers who have used or otherwise interacted with a Zag Program, Zag will not use such information in order to initiate marketing-related communications to any of Dealer's customers"

which means

If a customer has used Zag/TrueCar and you sold them a car -OR- you were sent a lead and they are unsold, since they interacted with a "Zag program" then TrueCar can market to them.

Are there restrictions on this marketing?  Don't see any.  Do you get the customers "back" when you leave TrueCar/Zag?  Don't see that.  Can they market to your customers to go to another dealership if you leave TrueCar/Zag?  Seems like it.  Can they market service for customers elsewhere if want to?  

You tell me what you think.  Did I get this wrong?  I don't think I did.  I just realized it when Eric hit me on the head with it.  :)

Comment by James A. Ziegler on January 5, 2012 at 5:03pm

Scott Painter is presenting this perceived  "Train Wreck Disaster" he calls TrueCar to New York when TrueCar, Inc. Presents at Needham & Company, LLC's 14th Annual Needham Growth Conference ~ Jan-10-2012.  

The event is closed to Private and Corporate Investors in The Palace Hotel New York, New York, New York, United States.

Wonder if GRP Partners is backing him? 

What investors in their right minds would throw a nickle at this pig considering all of the problems they're having already.  Truecar appears to me tobe more simlar to the Titanic meeting the Iceberg than a sound investment...what do you think? That's my opinion anyway.

Comment by Keith Shetterly on January 5, 2012 at 4:59pm

@ Eric:  Wow.  Why would a dealer allow someone to market to their customers?  This language doesn't restrict how they do that, either.  If you leave TrueCar/Zag, I guess they can market to your owner base to come to another dealership?  Sounds completely possible.  I guess they're not YOUR customers any more.  I expect some crickets from TC on this one.  Apologies to ADM and to DE, but here's the link to the whole welcome kit and language hosted on ADM.

Comment by James A. Ziegler on January 5, 2012 at 4:36pm

You guys stay tuned MONDAY, this thing is about to blow up to an even higher level of intensity... Joshua is at the Walls of Jericho 

Comment by Keith Shetterly on January 5, 2012 at 4:34pm

@ Mike:  Haha!  You owe me a keyboard.  :)"One of the invoices was for a Jeep the owner purchased for his daughter."

Comment by Mike Warwick on January 5, 2012 at 4:28pm

I am currently in the process of analyzing three months worth of Truecar invoices.  So far, over 50% of the invoices I received from Truecar were customers who contacted us prior to Truecar and therefore, Truecar would not be entitled to be paid for these deals.  I can't stress enough that Truecar dealers need to scour their invoices against their CRM's.  One of the invoices was for a Jeep the owner purchased for his daughter. 

Comment by Thomas A. Kelly on January 5, 2012 at 3:52pm

@ Heather, Would it be possible for you to share examples of what you and your IT guy found they were extracting that had nothing to do with matchup?

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