Professional Community for Car Dealers, Automotive Marketers and Sales Managers
I have a friend who works for a major automotive lead provider... She sent the following bullet pointed lists to me, and asked that I do not disclose her identity. She copied these lists out of an email that her company's newest VP (who came from True Car and worked directly for Scott Painter) sent to their internal team.
Select Affinity Partners (No-Haggle Auto Buying Program) – Zag traditional model – only premium dealers get these leads
Distribution Partners (TrueCar Price Reports)
I am posting this to the ADM Forum section to generate discussions around the topics referenced in each section and the bullet points that follow... What is your opinion or insight on the listed sections shown?
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OMG! Why any dealer would want to pay these crooks is beyond me. This is just amazing! Nice post Ralph! Every Dealer needs to read this!
Crooks is right… What most dealers don’t know or don’t understand is that the “Data” is being extracted in a CSV file, excel, or something like it. You can set up a report on a schedule to run daily, multiple times a day whatever you want. Then put at on a desktop for any vendor to grab. You now control what every vendor is taking from your DMS. So if they say they are only taking your inventory that’s all you give them in the report. We as dealers are still in control if you take the time to learn your DMS, or work with your vendors. If you want to sign up for TrueCar or Zag or whatever crap buying program it is today to sell cars for $2,000-$3,000 under invoice before rebates thats your problem... We have no problem over coming truecar pricing.
P.S. just converted at true car buyer on a new Nissan about 30min ago. ADM helped me in this. Thanks!
Chuck: I sure love that P.S. Great news!
I think it is interesting that TrueCar's biggest customer shut them off from DMS access... AutoNation (AN). Also, it seems that their algorithm is designed to charge the dealer for sales that the dealer would have most likely made regardless of whether or not they are using ZAG or TrueCar.
Ralph, that is a point that I hit Painter with today: I believe every one of the sales he "enabled" would have been made anyway. $1.5billion "saved for consumers" . . . that's a lot of lost profit to dealers. And thus lost paychecks to employees.
And to vendors. Or are you vendors not waking up yet to this threat? Can't train showrooms without salespeople. Can't charge for CRMs that need sales staff. Etc.
I don't think there are any surprises here - it's what many of us have been speculating about. But this is a great post with insider info -- nice job, Ralph.
AN never let them have the DMS data from what I understand -- AN dictated the data TC received from them.
I have never seen AN let ANYONE have DMS access, so I can't imagine why they would start with TrueCar. The more I read about this company the shadier it becomes. I spend every day of my life telling dealers that most digital advertising sales teams aren't trying to screw them, I may have to rephrase.
very interesting read....i didnt realize they had access to the DMS data as well, jeez
Great Job! Thanks for posting...
the pricing model for the service does make sense to me and represents real value to me as a dealer. The "we do a name match from the DMS to verify what we bill you for sounds like an easy way keep things uncluttered. The rest of it seems to be absurd to me. Price alone can't guarantee volume and even a rookie GM would figure out pretty quick that a reverse auction that makes negative leaps of HUNDREDS of dollars will spiral quickly out of control.
The coercion (?) from the Reps is really appalling. I am not closing deals so you threaten to pull me and "advise" I lower my prices in order to pick up my volume through the program. So I do and I win for a while but next week the same guy is telling the third dealer in the metro to do the same thing and the first guy withdraws and new dealer comes in and the cycle begins anew. Seems like a Three Card Monty Game to me. Each of us wins enough that we are ready to bet the farm on where the little pea is. I find out the hard way that the hand is quicker than the eye and leave busted while a new player is loaned confidence and then goes bust.
We can all see the simple ways to defeat the "will you honor" questions and it is not hard to offer affinity pricing on your own, so as Ralph points out you will not be getting any drop ship requests from across the continent from these guys. Knowing that all these people are in your sales locality and drive by your store and see all your adds would pay the guys anything? Why not just focus on building your own leads and retaining them in fixed operations?
PS with how tight new car inventories are today even if you are the perfect true car dealer there will be a gap between buyers and inventory on the ground that you will have buy from surrounding dealers. I would hard pressed to give any of my inventory to a dealer on this service.
PPS this reverse auction pricing to the consumer model makes a really big assumption that all cars can be a commodity at all times and in all places. Sorry True car just not true... The price of goods (absent inference in the market) will always be based on the supply and the demand. You must have forgotten that I would normally be willing to discount heavily any car in a unpopular color to free up the space and earn a better color or one with more appealing equipment. But at certain times of the year or with certain models if you want the red one with a sunroof and Bose audio the price is much higher I don't care if you go elsewhere. I get two per month and twenty offers. I would be silly to let it go low.
Andrew - I think you have described quite clearly one of the most negative aspects of the TrueCar Automotive Sales program... What you describe is like a "skull and crossbones" over a financial statement... Profit Poison!