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 DealerELITE on December 20, 2011 at 1:02pm
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21,317 views is now a Automotive Social Media view World Record. Great post Jim!
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Comment by Larry Muirhead on December 20, 2011 at 12:46pm
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Love your post James!
Let me echo that again here... "The department identified the method of payment (the $299-$399 per sale) as an illegal commission and a bird dog fee."
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Comment by James A. Ziegler on December 20, 2011 at 12:42pm
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A little Birdie told me watch for something coming from Virginia...
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The Wisconsin Department of Transportation, Division of Motor Vehicles has sent a letter, dated December 14, to TrueCar informing them that their business model violates Wisconsin law. The department instructed TrueCar to inform all of the Wisconsin dealers participating in TrueCar’s program that the program is not in compliance with Wisconsin law and either discontinue operations in Wisconsin or change their program. The department identified the method of payment (the $299-$399 per sale) as an illegal commission and a bird dog fee.
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Cleveland Dealers Association just issued this to ohio Dealers...
See the following statement made by them this morning;
GCADA wishes to remind member dealers that such an arrangement could potentially violate Ohio Revised Code § 4517.20.
The relevant law on this issue is found in Bureau of Motor Vehicle Code, Ohio Revised Code Section 4517.20, which states in part that: “No motor vehicle dealer shall directly or indirectly, solicit the sale of a motor vehicle through a pecuniarily interested person other than a salesperson licensed in the employ of a licensed dealer…nor shall a dealer pay any commission or compensation in any form to any person in connection with the sale of a motor vehicle unless the person is licensed as a salesperson in the employ of the dealer.”
If a dealer is found in violation of this section, there are numerous types of legal penalties against the dealer for such practices. In addition to criminal sanctions, a dealer can face a Dealer Licensing Board hearing for revocation and/or denial of a dealer’s license due to such violations. Participation in the sale of a motor vehicle by an unlicensed salesperson is also a violation of the Ohio Consumer Sales Practices Act, a statute carrying penalties of rescission, treble damages, non-economic damages, attorneys fees, as well as potential civil penalties and attorneys fees in an action brought by the Ohio Attorney General’s Office.
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Is this where a lot of Dealer data lands for sale? http://epic.org/privacy/choicepoint/
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I sent this as an email to 135,000 dealers, executives and industry people this morning as a targeted opt-in list.
Where is all of the data coming from?
This letter is addressed to dealers, manufacturers and interested parties nationwide from Jim Ziegler.You know Scott Painter of TrueCar keeps referring to "Data" that is readily available in the market that does NOT come from Dealerships' DMS. That was an "AHA" moment for me.Okay, I am sure government vehicle registrations and some other sources might have data that is public BUT NOT the specific data these people are getting. It appears to me that information could only have originated in a Dealers DMS.So, who's stealing it, repackaging it, it repurposing it, and selling it? That's a bigger question than the other questions I've asked.Could it be your DMS provider? The very people we contract to be the 'keeper' of the data? Could they actually be pilfering our information and reselling it? I couldn't picture ADP or Reynolds doing this. BUT, it bears askingCould it be your CRM or Lead Management provider? That might be more likely because they dig deeper into your data than anyone.Could it be the people you submit your credit applications to? That's a scary thought isn't it.Truth is, somebody or maybe everybody is stealing customer data from the dealers and it's showing up on the open market.As in Colorado, the government is warning the dealers they are violating the law as it stands in the current situation with TrueCar, which I am certain will be resolved after they make several business model adjustments.Somebody said Truecar was "Banned" in Colorado. I believe that is a misstatement... "Temporarily Setback" might be a better analogy.The real issue is growing and there needs to be legislative protection of the dealers against lifting customer data, some of which is a privacy violation I believe, and then selling data to each other or passing it to third and fourth party affiliates. All it takes is one smart-ass attorney with a class-action against a dealer or dealers to blow it up. Are Car Dealers at risk because of the insecurity of your data? I don't know all the answers, but I am wise enough to ask the questions.It needs to be a crime that is prosecutable and enforced at the Federal level. NADA will not get involved with the TrueCar issue because they do not want a Anti-trust violation. Sobeit... But I believe lobbying for Data Protection at the federal level is their job...........
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Comment by Keith Shetterly on December 20, 2011 at 10:52am -
@ Jim: You probably missed this blog Dealer Data Wars! which I wrote, ironically, December 7th! Check it out.
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Comment by Thomas A. Kelly on December 20, 2011 at 9:26am
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@Eric, equally important to reviewing contracts would be to incorporate a vetting process which exposes relationships and affiliations, past and present. I suspect that more than a few have factually represented a company as this or that.... but upon further discovery, ties, direct or indirect can be made to entities that conflict with the factual statements at hand. Beware of the wolf wearing the sheep's skin. My company may never hurt or harm a dealers interest but my wife or brother-in-laws company may indeed. Some of the dealers biggest "partners" own several thousand internet properties. Do we really know what each is intended to do? Just a thought.
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Kill the data, that will kill the beasts. I intend to repost at the top of the page in a while so this discussion will keep on going.
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