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

Views: 48189

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Comment by James A. Ziegler on January 5, 2012 at 8:29am

Here is the mass email TrueCar is sending to Dealers... it sort of says they are concerned, would you think? Okay Gang let's analyze what they're saying, count-counter-point. The crisis grows. This is part one, part two is directly below. This is what they're saying. The Real question is... DO YOU BELIEVE THEM?

From TrueCar to Dealers:  You may have read certain articles and online postings intended to raise concerns about TrueCar, regulatory compliance and data privacy and security issues. We want you to know that TrueCar is committed to a business model that provides consumers with a trusted car buying experience while also providing our dealer partners increased business success. We believe much of the negative attention is being fueled by only a handful of individuals who feel threatened by our ongoing success. To make sure you have the facts, TrueCar would like to set the record straight:


TrueCar is committed to a business model that conforms to state regulatory requirements.
TrueCar is committed to operating our service in compliance with state and federal laws. Throughout our history we have worked with state regulators, and where issues were raised, constructively found solutions to those concerns. TrueCar continues to work directly with regulators to ensure compliance with all applicable laws so that neither we nor our dealer partners are subject to any fines. In fact we’re in the process of making meaningful changes to the service, which will be completed by the end of January 2012, in order to address specific issues raised by regulators. In the meantime, as a result of these inquiries, there has been no mandated prohibition of TrueCar services in any state, and there have been no lawsuits filed against TrueCar.

Over the last year, TrueCar has been in discussions with regulators in several states, working to ensure that TrueCar’s unique business model conforms to each state’s different regulatory requirements. TrueCar operates a new business model, and regulators in various states are working with TrueCar in analyzing this model to ensure that it is in line with their state laws. TrueCar’s business model does not easily fit into the historic regulatory framework, which was developed prior to the advent of the Internet. In the last two weeks, there have been new postings and communications from regulators and/or state dealer associations. In some cases, it appears that these postings have been urged by our critics. However, in many cases, these again appear to be routine notices in response to all the recent publicity.

We take compliance issues very seriously and are making a series of changes – some by mid-January and others by end of January 2012 – to address certain issues raised by regulators. We will be sending out additional communications to our dealer partners as we introduce these changes. In the meantime, we ask you to “stay the course” and if you have any additional questions, please contact your TrueCar Account Team.
TrueCar is committed to data privacy and data security and appropriate use of data.
TrueCar does not use any information from dealers’ DMS to create the TrueCar Price Reports. We access your DMS sales data to accurately match your sales to the customers who contacted you by using our service and then made a purchase. This allows us to assess our performance and to analyze data to help determine your close rate and the effectiveness of our service for you. Without that feedback loop, we cannot monitor how well our service is working for you. TrueCar’s internal policies and the TrueCar Dealer Master Terms and Conditions prohibit us from using DMS sales data in the price reports. Instead, our proprietary methodologies aggregate and analyze anonymous pricing data we license from third parties. TrueCar has built a state of the art system that restricts data sources to the teams that are authorized

Comment by James A. Ziegler on January 5, 2012 at 8:28am

TrueCar has built a state of the art system that restricts data sources to the teams that are authorized to use them. This means that TrueCar employees who work on the TrueCar Price Reports cannot access your DMS sales data. That data is stored in encrypted form on an isolated part of our network that is only accessible by teams engaged in the sales matching process.

TrueCar does not use any personally identifiable information (“PII”) from your DMS system except for the limited purpose to match sales. We do not use this information for lead generation or any other purposes.

All personally identifiable information is held in a secure environment. PII is stored in encrypted form on dedicated servers that have no connectivity to the Internet and very restricted access even from within TrueCar’s own corporate network. TrueCar uses a defense-in-depth security model that limits access to sensitive data via strong encryption, network connectivity restrictions, and standard access controls.

TrueCar takes data security very seriously. TrueCar’s data systems were designed to comply with the data security requirements of the company’s oldest and largest partners, many of which are world class banking and financial firms. These companies audit TrueCar’s data security technology, processes and procedures.
Enthusiastic customer response to TrueCar is resulting in success for both us and our dealer partners. In 2011, TrueCar dealer partners sold over 235,000 new and used vehicles through the TrueCar marketplace, a 93% increase versus 2010. This compares to a 10% increase in overall industry sales for 2011 versus 2010. TrueCar’s recently launched Yahoo Autos partnership will give TrueCar dealer partners an even bigger platform to promote the value of transparent pricing. Finally, the separate enclosure titled “Additional TrueCar Dealer Product Enhancements Launching Q1 2012” provides a “sneak peak” at several upcoming product enhancements designed to provide a better experience for both TrueCar dealer partners and their customers.

We look forward to continuing to help you grow your business in 2012. As always, we appreciate your support and feedback.

Sincerely,

Stewart Easterby
Executive Vice President
TrueCar Dealer Development

Comment by Stanley Esposito on January 5, 2012 at 7:37am

I just want to say good morning to the "small but vocal group."  Keep it up! Thank you!

Comment by James A. Ziegler on January 4, 2012 at 1:33pm

I have just received information that another one of the largest privately-owned dealer groups in the country is dropping TrueCar in the next 30 days.

Comment by James A. Ziegler on January 4, 2012 at 11:48am

Here's a section taken out of the contracts thousands of dealers have signed with a major DMS Provider...read it and cringe. it even allows them to report your lead efficiency to the manufacturer...

REPORTING;DATA SHARING. Notwithstanding anything to the contrary contained in this Agreement, Client hereby grants (DMS Provider name) the non-exclusive, royalty free right and license to (i) repurpose and/or aggregate the Extracted Data, (ii) track, analyze and/or create reports related to aggregate activity and/or results obtained in connection with Client's use of any (DMS Provider name ) Offerings (including use by Client's customer of any Software, Services, or any other (DMS Provider name) Proprietary Materials) and share such information with its affiliated companies, (iii) share Extracted Data with such  third parties as (DMS Provider name) deems necessary in connection with providing (DMS Provider name) Offerings hereunder (iv) utilize such information to, among other things, create, market, and sell products and services, and (v) use, store, modify, redistribute, sublicense, transfer and sell to third parties, in aggregated form,  the Extracted data or any other information tracked, analyzed, reported or otherwise  received by (DMS Provider name) in connection with providing (DMS Provider name)Offerings. For the avoidance of doubt, "aggregated" data shall not include any Customer Information or information that in and of itself may be used by a third party to (x) identify a Client's customer, or (y) determine the number of sales and/or the financial terms of any sale made by the Client. Client further agrees that (DMS Provider name) may, and Client expressly grants (DMS Provider name) the right to, disclose and provide to its affiliates and representatives, and its OEM partners, consumer lead information and disposition status thereof with respect to consumer leads that are provided or sold to Client by any OEM or any of (DMS Provider name) affiliates or representatives.

Comment by Mike Warwick on January 4, 2012 at 11:38am

I can echo what Stan is saying.  November, Truecar launches their ad campaign and drops over 500 leads on us.  This completely swamped my staff and we went from a 12.8% to 8.5% closing percentage and dropped 76 cars from the previous month. We cancel Truecar in early December. December we finished at a 13.1% closing percentage and sold 59 more cars through our BDC than in November.

Comment by Keith Shetterly on January 4, 2012 at 11:31am

Sorry, here's the right link for the TrueCar patent that mentions the DMS 26 times:  http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITO...

Interesting read!  And picture (click on to see the larger model):  #'s 132a and 132b, as well as 134a,134b, and 134n, in the figure are used in the text to refer to the DMS.

Comment by John McAdams on January 4, 2012 at 11:27am

I was just handed a memo  from my GM. The MADA is of the opinion that ZAG/TrueCar referral program which requires a dealer to pay a fee only upon sale of a vehicle violates Maryland's dealer licensing law. What is most interesting to me is MADA officials met with TrueCar/ZAG officials last June where they (MADA officials) voiced concern that this payment method would be considered a commission to an unlicensed salesperson and would put Maryland dealers in violation of the licensing law. TRUECAR/ZAG ASSURED MADA OFFICIALS THAT CHANGES WOULD BE MADE SHORTLY TO COMPLY. TO DATE NO CHANGES HAVE BEEN MADE.  

Comment by Stan Sher on January 4, 2012 at 11:02am

Trust me.  I have had a chance to experience TrueCar for a full week.  They are taking over a whole market.  A dealership that gets 600 normal leads from their sources (that are not out to hurt them) now gets 1600.  1000 comes from TrueCar and they sell 30-40 cars per month out of it.  That is a 3-4% closing ratio when we should be at 10%.  I found out calling these leads that the customers are being steered in that direction.  TrueCar has done a great job getting in front of the consumers with their commercials and marketing. But when 70% of your leads are 80-120 miles away and they do not want to make the drive no matter what value you give them or how good of a closer you really are you start to really see what a horrible company TrueCar is. If you want to clutter your CRM with garbage and let your DMS be used to extract data that will be used against you then TrueCar is your solution.

TrueCar is not a friend to the industry.  TrueCar is worse then cancer.

I spoke to a BDC manager from a NY Chrysler Jeep Dodge dealership.  He called me because he was looking to contact his TrueCar rep and when he googled to get contact information he stumbled on my blogs.  He actually defended TrueCar saying that he does well with them and they are good.  When asking him how he feels about getting the runaround from leads that are 80 miles away he simply responded that he does not waste time on internet leads at all.  He follows up with them for 7 days and if nothing happens he just gives up.  He did not believe that a lead needs to be managed for 90-120 days.  I wonder what training he got.  That is not a good BDC Manager at all.  I cannot believe that dealers allow things like this to happen.

There is nothing out there that can prove that TrueCar deserves to have a place in the marketplace.  I was going to go out and see the operation for myself.  But I realized I want nothing to ever do with them after TrueCar started submitting bogus leads with my information to their own dealers.  I had 100s of dealers from NJ, PA, and even CA call me to follow up with me because they thought I was an internet lead.  These leads came from TrueCar.  A company that is supposed to be a partner in helping dealers sell more cars is not only hurting them by taking their data but it is wasting their employees time calling on bogus leads instead of focusing on the real leads that should be coming in.  Come on dealers, wake up!!! How can you let this happen?

Comment by James A. Ziegler on January 4, 2012 at 9:51am

A Dealer Principal writes me an email... Name Withheld....

Jim - Thought you'd enjoy some real world numbers on TrueCar deals.
 
Just got invoices for 6 sold units last month, which after fees totalled in $594 gross profit for ALL six deals, this is not an average. This is before I pay managers, sales staff and any other cost of doing business.
 
We've cancelled our agreement, but still inside the 90 days where they can continue to mine our DMS.
 
Keep up the good work.
 

© 2024   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service