TrueCar - DealerTrack (ALG) Relationship: The words of a DealerTrack Employee
I received this email about eight hours ago from an employee of DealerTrack. They asked me that I kept it discreet so I will not be mentioning who it was that sent this to me. It is amazing that DealerTrack's own employees have certain opinions about DealerTrack selling ALG to TrueCar. Does it mean that DealerTrack's own employees are against this deal too? I know that I myself could not work for a company that would allow something like this (no matter how much money I was getting paid). Anyway, here is the email with more inside information by someone whose name cannot be disclosed. Friends, enjoy this as much as I did.
> So the press release reads "DealerTrack sells ALG to TrueCar." Why would DT part ways with their most unique data brand, in an age where data rules all, you ask? Well, actually they didn't. In the "selling" of ALG, DT gets: an equity stake in TrueCar, scores a seat on their board, receives a perpetual/royalty free ALG license, secures a multi year agreement to retain operating duties, and banks a very high stack of millions of dollars. What did they give up other than some future subscription revenue, of which they are going to share in anyway?
>
> This isn't a sell your dealership to AutoNation/take the money and run type of a transaction. This is Pops handing off to Junior. Son here's how we do it. This is nothing more than "let's just go ahead and transfer the title and put this thing in your name, wink." DealerTrack had to have anticiapted the outcry of moving dealer data, and this was their way of staying off the battlefield.
>
> So why would TrueCar agree to such a one sided expensive deal? Imagine all the financial and lender information that DT has access to, or the amount of data contained in the DT DMS (Arkona), imagine the number of credit applications submitted through their portal each day, the scanned deal jackets, the AAX inventory metrics, TriVin's electronic titles, etc... The amount of data is maddening, it's deafening. But with every one of these keystrokes from these modules and business units comes a corresponding digital imprint, an imprint that is filed and sorted, and sent to the DT data vault for future use.
>
> Welcome to the future.
> Many of us have seen A&E's Storage Wars where entrepreneurs will bid for access and ownership to the contents of storage lockers that are in default. Invariably there is a guy in the back of the auction crowd with a funny hat that is always nodding his head and mumbling, "uh hum". Let's call him Scott. And Scott will do whatever it takes, at any cost, to get the keys. He just wants to go in and take a peek around. Here's a check.
>
> And whether you think it's your data, or legally it's theirs, or you like the TrueCar business model or you don't, that's up for you to decide. One thing is for sure, DealerTrack just made a truckload of money.
> Zig, meet Zag.
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Comment by Stan Sher on January 4, 2012 at 11:01am
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Trust me. 2% is a BS number. 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?
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TrueCar just had hit some dealers in California calling me and emailing me with internet inquiries. Dealers are calling me thinking I submitted a lead. It might be time for me to get my attorneys against TrueCar and Scott Painter.
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Slowly but surely TrueCar is getting what they deserve coming to them.
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Comment by Keith Shetterly on December 17, 2011 at 9:24pm -
Arnold, it's a Saturday night. I'm okay being the bad dealer guys in these blogs. They have 5,000 dealers already. One third of privately-owned franchise dealers. We're not their marketing engine for dealers, and they really do NOT want to use these threads to pick a fight with consumers around them. TrueCar has marketed their product around some mathematics. The DMS access is actually key as a measure of their algorithms, not just as a way to get them their $300/$400 per car. And, if the DMS access were stopped tomorrow, they are not ready yet to support themselves without that revenue stream. Currently, TrueCar is vulnerable on the DMS access for those two reasons; once they augment the stream with TrueFinance, etc. (which they plan), they don't need the DMS access AS MUCH. However, it actually spins their patentable items off point more than a bit if they don't have that data directly because it's more timely. I spent a little time with my old math professor today. For the TC folks reading this, if there are any, let me tease you: When is your normalized gaussian distribution NOT a normalized gaussian distribution? When the data ages, of course.
Anyway, have a good night, at least until later I am over and out!
Thanks.
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Comment by Arnold Tijerina on December 17, 2011 at 9:03pm
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Sure they have names but it's not my place to out them. If they want to chime in, they can and will. I'm not looking for a fight at all. When you say that I should go work for them, in context, that's an attack or at least I take it that way. Ive never disagreed that TrueCar shouldnt take data from dealers and use it against them (if they are). I've only made a couple of comments on this topic:
1) This thread, and its contents, make dealers look bad to a consumer and reinforces us as the "bad guys"
2) I liked performance-based pricing models.
3) Transparency and pricing availability to consumers isnt going away.
4) Honda isn't doing anything new or special when it comes to enforcing their policy of not allowing dealers to advertise under invoice pricing.
If I missed something let me know but I agree with you on the data issue on an even bigger scale than just TrueCar. Dealers need to know who is getting their data, what they're getting, and what they're doing with it. It's a dealers responsibility to protect their data. Im not saying that IF TrueCar was mis-using a dealers data that it's ok. Not at all. Scott Painter was clear in his assertion that TrueCar is not now, nor never has, used DMS data to power its bell curve. If it turns out the CEO of a large company is lying dealers, thats a whole 'nother can of worms.
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Comment by Keith Shetterly on December 17, 2011 at 8:57pm
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If they've really got 5,000 dealers, the time to worry about not talking about them is long gone.
"Unchecked ego will undo all the great things that talent and fortune will bring you." - Keith Shetterly
He needs to learn that even he can be checked. He will be here.
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LOL Come on guys. You both are my friends. Let's all get along.
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Comment by Keith Shetterly on December 17, 2011 at 8:53pm
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Arnold, don't get so dramatic. I don't like your position. TrueCar would. That math is simple; if that's a negative, why? You support them pretty well, so how am I negating you? That's silly.
You're digging for a fight, and you won't get one. I just disagree with you, but, as silly as I sometimes find you, you are also intelligent. Just misguided in this instance, and for that you might need thicker skin.
Who are those prominent people? I'd like to hear more about that. Do they have soap boxes? Or names?
Thanks
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Grant said the same thing on the phone yesterday. He said that the more we talk about it the more we give TrueCar PR. But you know what some of us have reason to believe that Grant might be behind TrueCar. He says he is not. However, it seems as a few of his people are out doing some very naughty things to protect TrueCar and try to piss off people like myself and a few others.
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Comment by Arnold Tijerina on December 17, 2011 at 8:43pm
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Because I disagree with you on some aspects of TrueCar, I should go work for them? I, for a fact, know prominent people within our circles that agree with me.
I don't know how Grant's statements have helped him. He hasn't made many in regards to TrueCar. If it did in any way, it was through exposure. A LOT of people are getting exposure through this.
It's only my opinion and I'm entitled to it. Just because I don't agree with you or have presented facts that disarm some of your statements, why do you feel the need to negate me. You've mentioned many times that I should go away. Sorry, Keith. Its not going to happen. These forums are for all of its members, I being one. If you don't like my opinion, don't respond. I don't respond to many of your soap-box tirades.
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