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 December 29, 2011 at 3:58pm
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This might be a shocker... what if I were to tell you one of the major manufacturers might be buying TrueCar leads and forcing their dealers prices even lower? I'll know, and blow it up in the next few days.
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TO BE CLEAR.. no one is suggesting that any organization boycott TrueCar. Dealerships may elect to do that as individuals to protect yourselves from exposure to liabilities associated with your data.
We are suggesting that your dealer associations take stronger action to educate dealers to which laws, if any, are being broken in their states. (which many are doing)
The main thing we'd like to see happen is government agencies like the Federal Trade Commission and Consumer fraud protection agencies take a hard look at what's going down with, not only TrueCar, but all data extractors taking and reselling and passing around consumer data. AND to examine their advertising claims and processes. The only thing we're asking Dealer Associations to do is lobby for protection and corrective legislations where appropriate.
Nobody would mind doing business with TrueCar, or anyone else doing legitimate business.
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Unbelievable! I'm getting hundreds of phone calls and emails from virtually everywhere, dealers, factory people, managers, dealer association executives, sales persons and reporters. It's amazing how many of us "Hate" TrueCar.
I am about to mass email this post to 135,000 interested industry parties.
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 potential 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. If anyone takes financial transactional data, they expose the dealer that allowed it to potential liability and violations, especially if it is passed on to other vendors or shared with third and fourth parties.
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 certificates 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.
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 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 bankrupt and he, in his God-like way" will control distribution.
When their Yahoo Deal kicks in we need to stand firm and "
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Comment by Keith Shetterly on December 29, 2011 at 11:27am -
Here's some simple math for True Car dealers--but, first, everyone understand that Zag customers were CONVERTED to TrueCar, and Zag was essentially an affiliate program. Where you hope to move a unit for a volume step and likely give up the financing. Not any more! Let's say your dealership sells 100 cars a month, and 5 of them were TrueCar. Now, with TC's advertising and your agreement with TC, you could easily see 15 or 20 TrueCar clients! Except you won't sell more than 100 because TrueCar is NOT incremental business. You're just going to pay TC $300 for the 15 or 20 because the customer stopped at the TC website before they came over. And don't forget the . . . "great" price they will pay. Welcome to a parasitic relationship, and you're the host.
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Comment by David T. Gould on December 29, 2011 at 9:45am
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"Tell people with certificates YOU don't honor TrueCar ..." Brilliant! I would love to see a JZ approved certificate vs. individual efforts. I like the idea of including the consumer awareness portion of your list below and I would like to suggest adding a CONSUMER web address (URL with microsite / splash page) directly on the certificate for more detailed information and links. Count me in if you would like to pursue this further. Note: Educating salespeople to pass along the message would be a pretty big process and would likely not provide the maximum results considering that when a salesperson says something negative, it will likely be interpreted as defensive.
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Everyone please copy the post I just did below this one and email it to everyone on your list...factory people, dealer association people, government agencies, deal council members, other car dealers, manufacturer executives. Thanks JIM
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Little quiet on the TrueCar scene today... gone but not forgotten. Promise to re- crank this Blog soon. It will continue bigger than previously...I'm working on some bigger surprises that are taking my time. You'll be surprised at what's going to happen next. watch here for TrueNews coming soon.
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Comment by Keith Shetterly on December 28, 2011 at 10:33am
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It gets worse, if you go back far enough. From 2001, Painter is complaining about how Wall Street " Wall Street, Painter grouses, is serving both seller and buyer in the same transaction, a blatant conflict of interest. "The interests of the investment bankers run totally counter to the interests of the issuers," he says. "The entire system is obsolete."" http://money.cnn.com/magazines/fortune/fortune_archive/2001/05/14/3...
"is serving both seller and buyer in the same transaction, a blatant conflict of interest" . . . hmmm. Sound like TrueCar today? I think so.
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I suspect he believes he's a genius and we're just a motley collection of Forrest Gumps...
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Comment by Mike Warwick on December 28, 2011 at 10:00am
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Jim, I think it illustrates the contempt he has for those of us in the car business. In his brain, car people and tech people inhabit completely different worlds and the two never intersect. I think he has been shown a new reality that we "car people" know a thing or two about technology and the power of social media. I wish I were still in college looking for a thesis. This story writes itself.
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