s 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…
n on March 4, 2012.
Credit: Reuters/Gary Cameron
(Reuters) - It used to be that people in the market for a new car could go to the car-shopping website TrueCar.com, which collects bids from auto dealerships, and get dealers to undercut one another on price. Dealers could see the rival prices, so prices tumbled lower over time almost like a reverse-auction.
Faced with complaints from dealers over the way that worked, TrueCar changed its website, the system became less competitive, with dealers no longer seeing rival prices, and now U.S. antitrust enforcers are trying to unravel what happened.
The Federal Trade Commission is investigating whether car dealers across the United States ganged up against TrueCar, agreeing among themselves not to do business with the California-based Internet company because it was driving down prices, said people who have received letters from the FTC including TrueCar Inc chief executive Scott Painter.
TrueCar and dealers are now on good terms, but the FTC is investigating whether potentially higher prices from the company's changes were the result of fair market pressure or illegal collusion. The probe was disclosed in the auto trade press in September.
The investigation, which appears to be in an early stage, centers on an industry that is also feeling disruptive pressure from direct-to-consumer car-maker Tesla Motors Inc and on a company, TrueCar, that once had ambitions to make dealership staffs obsolete but which has since abandoned that idea.
Founded in 2005, privately held TrueCar provides price data to consumers for free and assists car-buying services like the one available to American Express Co members. It does not sell cars, but it projects that consumers will buy 400,000 vehicles this year with its help, up from 223,000 in 2012.
On Thursday, the company said it was getting a fresh $30 million injection from an investing arm of Microsoft Corp co-founder Paul Allen.
TrueCar is also a frequent source of sales data generally, quoted by news media including Reuters.
"We see all transactions across the U.S., both new and used," Painter said in an interview. The data allows the company to see, for example, how far people in a particular ZIP Code are willing to travel to buy a car, and what cars have sold for recently.
In earlier media interviews, Painter imagined a future in which customers would get a guaranteed low price online and then pick up a new car from a dealer without needing to talk to sales staff, let alone negotiate with them.
As the company gained momentum in 2011, a feature of its website began to get particular attention among dealers. They were allowed to see the bids that other dealers offered customers, and some dealers began to undercut prices so much they were willing to lose money on individual sales, hoping to make it back through service and repair work or future sales.
Adding to dealers' losses, they agreed to pay TrueCar $299 per sale on new cars and $399 per sale on used cars.
Complaints started showing up on online discussion boards. Jim Ziegler, a consultant to dealers who also writes columns about the industry, was the self-described catalyst.
"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?" Ziegler wrote in a November 2011 column posted on several websites.
He advised dealers to cancel their affiliations with TrueCar. Many did. TrueCar said its network fell from 5,700 dealers at the end of 2011 to 3,100 two months later. Attacks came from other directions, too. These included accusations that TrueCar violated state franchise laws and had too much access to dealer-generated data.
Because dealers are the source of TrueCar's revenue, it also started to bleed money - losing $9 million in January 2012 alone. "They wanted us to die, go away," Painter said.
Taken off guard, TrueCar decided to make changes, among them the disabling of the feature that allowed dealers to see what rivals were bidding for potential customers. Dealers now see a customer's name, phone number, email address and what kind of car they are interested in buying. Customers see prices from area dealers.
COMPANY DEFENDS NEW SYSTEM
The company defends its new system, saying it would not have been able to survive if it had not changed.
"In order for an auction to theoretically work, you have to have willing participants. And we live in a free country, right?" Painter said. "If the outcome of a pure reverse-auction is unsustainably low prices that drive dealers out of business, that doesn't really work."
Besides, he said, price is only one factor for car-buyers and is often less important than location and giving them the exact car they want.
TrueCar began to court dealers back, telling them they were the company's customers as much as consumers were.
"We are not in the business of speculating on the business model of how cars are sold at the dealer level," Painter told Reuters this month. "That's up to them. Our job is to help dealers and consumers find each other and have the information to make a good match."
TrueCar's network has rebounded to 6,700 dealers, an all-time high, and the company is now a "genuine participant in the automotive ecosystem," Painter said.
As for what happened to prices after the turnaround, TrueCar does not have data on that, a spokeswoman said. One dealer, though, estimated that prices have risen to the point where he is making 30 percent more profit than he was at the height of TrueCar-induced competition when he saw rivals' prices and cut his accordingly.
"My prices are higher today than they were at the beginning of TrueCar," said Earl Stewart, who runs a Toyota dealership near West Palm Beach, Florida. "It's still a good buy for the consumer, but it's not as good as it was at the beginning."
Stewart, a member of TrueCar's Dealer Council, defends the company as embodying the free market. Other dealers urged him to stop using it in the earlier, more competitive period, he said.
"I had dealers call me and say, 'Let's stop this madness. Let's keep our prices at a reasonable level.' I said, 'You can't talk to me about that. You're going to go to jail. That's an antitrust violation,'" Stewart said.
Consumers can shop around as they always could if they want to put in the legwork to show quotes to other dealers.
FTC LAUNCHES PROBE
It is not clear how the episode came to the attention of antitrust enforcers, but in September 2013, dealers received letters from the FTC asking them to preserve documents.
The FTC said it was looking into whether some companies violated antitrust laws "by agreeing to refuse to deal with TrueCar" in 2011 and 2012, according to Automotive News, a trade publication that got a copy of one letter.
Ziegler, the industry columnist, got a letter from the FTC, too. In an interview, he said he would cooperate but that the FTC was ridiculous for starting a probe so long after TrueCar and the dealers had resolved their differences. "If they had done this when it was a hot issue, it would make a lot more sense," he said.
Even now, he added, the investigation is unwarranted because dealers did not collude. He said they cut ties out of their own self-interest to stay in business.
"I know a lot of dealers canceled them, but it was all individual decisions," he said.
It was unclear how many dealers have received letters from the FTC. The National Automobile Dealers Association, a trade group, said it received one and is cooperating but does not believe it is a target.
An FTC spokesman declined to comment.
Investigations into concerted action are often straightforward, said Seth Bloom, a former Justice Department antitrust lawyer now in private practice in Washington, D.C. "If they can find an agreement among competitors not to deal with this distribution channel, it's basically a case right there," he said.
If the FTC were to find that there was anti-competitive behavior, it could order TrueCar to restore its former business practices or search for other remedies, Bloom said.
Painter expressed ambivalence about the FTC's investigation. He said TrueCar did not request it, is not a target and is paying fees to two law firms, Alston & Bird and Wilson Sonsini Goodrich & Rosati, to comply with it.
He said he had no opinion on whether the dealers violated laws meant to protect competition.
"If it's determined that there was a perpetrator and a victim, we're the victim," he said, "but I think that we as a company have already survived this issue, so I don't know what you could do to help the victim."
With TrueCar having changed, he added, "dealers are back on the program, so we have no interest in picking any fights."
(Reporting by David Ingram; Editing by Howard Goller and Ken Wills)
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is statement you made: “then you really should not be giving advice based on your own "gut feelings" or the wonderful system you use to sell 10 cars a month from 100 to 150 leads...”
I just happen to have a commission statement from the last 40 days I sold cars before I transitioned into consulting seven years ago. Here you go: Jerry’s commission statement
Before you go making assumptions as to my sales abilities, you really should get the facts straight. You know what they say when you make assumptions don’t you Ralph? I would imagine many of the professionals within the ADM community could easily pay their bills as well as put a few kids through college earning the type of money I used to make selling automobiles.
The author of this thread asked for examples of templates when replying to Internet leads. I provided him with one which I use when I can’t reach a customer on the phone.
So let me share with you how I like to handle an Internet lead in the early stages. I am only going to cover “on hour” leads at this point.
I do not believe in sending auto responders to Internet leads during dealership business hours. When the lead comes in I immediately pick up the phone and try to call the customer. The sooner I can do that and the better my chances of making contact. If the customer answers the phone, it now becomes a phone-up. Since I happen to posses some killer phone skills, making the appointment is something I am normally able to accomplish 80 percent of the time. Now if I don’t reach the customer, I’ll leave the following voice mail message: “I have some great news for you, please call me….” Then I’ll send a first response e-mail. That first response e-mail is to try and prompt the customer to call me, thus I gave my example. Of course I will read what the customer wrote and respond accordingly. I will not however give out a price unless it’s absolutely the last resort, and even then I’ll methodically examine the situation before doing so. Oh and by the way, some leads come in with no questions at all. Identifying the “lead provider” is for those customers who are submitting leads on multiple sites. I’ve had customers ask me “how did you get my information” which is why I like to identify the lead source in my e-mail. Obviously I am not going to use the lead source if the lead comes in from somebody like Dealix since the customer will have no clue as to what I am talking about.
The video link is something that I started doing with dealers when I was installing iMagicLab CRM since they have a really nice video insertion tool. I’ve seen cases where Internet reps are using video to sell themselves and the dealership and it’s been working very well. Which leads me to my closing statement, “Are you ready to be dazzled?” I like to use words that you don’t often see used to create oddity thus prompting the customer to examine my video. I do something similar with my phone greeting and other salespeople would laugh at me. Well it gets results, so who’s laughing now? If I find that a template is not producing video reviews, then it’s off to something different. The main goal is to get the customer to click on my video. In order to track the effectiveness of my template, I would either use 800 tracking numbers and/or I would create a web page loaded with the video. For each template I would create multiple sub domains and track the activity with Google Analytics.
Once customers see me as a real person and that I deliver a powerful meaningful message, it’s going to put me in a different category than all those other e-mails. Now the exception to that would be if I was a "gang banger" with a big ass tattoo on my neck like the folks you used to have a knack for hiring when you were a sales manager. Since I am a clean cut well dressed professional, this will work in my favor. Kind of like if you and I were to put pictures and profiles up on Match.com, I’d probably get a lot more replies from the ladies since I am a much better looking than you are.
Now you’ve seen me use the word “templates” a few times and I know how you feel about templates. So let me explain my thoughts here. You’re only going to see so many different types of e-mails from customers and a lot of your responses are going to be common. So as I respond to customers, I am going to save some of these e-mails and use them as the foundation for future e-mails. After all, why should I or anyone else have to keep recreating the wheel each time? I am all about speed and efficiency. You can take any template and personalize it very easily. After I send out that template, I am going to try and call that customer several more times during the day. I’ll try from my work phone, cell phone and will also try blocking my caller ID by using *67 before dialing the number. Most people only dial once and schedule another call for the next day.
Since I have had the privilege of working with dealers all over the country, I can tell you that what works in one part of the country might not always work in another and vice versa. California customers seem to react a lot different than those on the East coast and the same with smaller city customers versus larger city customers. There are a lot of different ways to accomplish a mission. They key to success is all about “execution” which is something that doesn’t always happen properly in the auto industry. Remember when Ford pushed the BDC thing on all those dealers across the country? Sound concept, but how well did that work out? Most of them failed miserably; probably due to poor execution. Didn’t you play a role in that deployment Ralph?
Maybe my process sucks in your eyes, but it gets me results and that’s all I care about. So any day you’d like to challenge me to a sales competition, I’ll be more than willing to meet you in a dealership for a month and we’ll see who comes out on top.
Let’s talk about the real reason you insulted me Ralph. As you mentioned in a previous thread, little disagreements like these drive up the traffic. I think you chose me as your target since you’ve seen me speak my mind freely and knew I would react to your insults. Well I hope I’ve helped you accomplish your mission since I am convinced ADM could use the boost. I’ve been active on this site as well as on Dealer Refresh and I’ve been tracking the traffic that’s being driven to my business website using Google Analytics. As you can see by this picture, it appears that Dealer Refresh has the upper hand on ADM.
This site seems to be filled with more industry vendors than actual customers. It’s like the “Wild Wild West” here and anything goes, including insulting those who are only trying to share their opinions. There’s a difference between debating and insulting Ralph. If you have developed the perfect systems for today’s dealerships, perhaps you should just lock this puppy down, publish all your own personal beliefs and not let others share theirs.
What say you Ralph Paglia–would you like to continue insulting one another, or should we just laugh this one off and move on to something more exciting? I hope it’s the later and perhaps one day we can chuckle about this over a beer.
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