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True Car and ZAG - Cyber Bandits or Good for the 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

 

 

 

 

 

 

EDITOR'S NOTE: The ADM Professional Community has assigned a short-cut domain name to this blog post by Jim Ziegler to make it very easy for ADM members and readers to refer others to this web page. Please use the following URL:

www.TrueCarDealer.com

 

Jim Ziegler's Guidance and Recommended Action Plan:

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  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. 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.
  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 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.
  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 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.

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Comment by David Flowers on February 8, 2012 at 6:58am

ZAG Receives DrivingSales Dealer Satisfaction Award

 

I don't know much about DrivingSales.com, but this certainly damages my opinion of their vendor ratings if this is true.  This is a PRNewswire release by TrueCar, so take it with a grain of salt.  But I would like to know more of how DrivingSales conducted this survey as there is a mountain of evidence to the contrary.

Comment by James A. Ziegler on February 8, 2012 at 6:18am

Thomas I love your translation of Scott Painter's double-talk here. JIM

If anyone wants a copy of the Data Wars Newsletter to forward on to your email list, please send me a message here with your email address and I'll send it to you...

Comment by Thomas A. Kelly on February 8, 2012 at 6:00am

Scott Painter, F&I Mag, Today's issue: 

"Look, I realize that some people feel, because of my past at Cars-Direct, that this is an anti-dealer play. It’s not. This is about fundamentally recognizing that the consumer has changed how they shop, and we believe that this is one of the most important tools for dealership profitability and growth in the future."

My parody translation:  "Look, I may have attempted to do some pretty crappy things to dealer's in the past with CarsDirect, and yes I was forced by the board to step down....that aside, trust me, this is different."

Comment by James A. Ziegler on February 8, 2012 at 5:55am

Painter still doesn't Get It, does he? The tone of his latest interview, still talking down too us, lecturing about what the consumer wants and he is the salvation and the answer because we're stupid. Admitting he was a bad guy in the past but he's come to repent and be baptized in the love of car people. Do we have a "Trust" issue with him? 

"Look, I realize that some people feel, because of my past at Cars-Direct, that this is an anti-dealer play. It’s not. This is about fundamentally recognizing that the consumer has changed how they shop, and we believe that this is one of the most important tools for dealership profitability and growth in the future."

Comment by James A. Ziegler on February 7, 2012 at 6:13pm

Yes Eric, there is a race going on right now as several new vendors are developing "Clearing Houses" for DMS Data to protect the dealers. All vendors will have to go through them to extract data and they will be monitored closely. It's going to be a huge business... Dealer Data Security. 

Comment by Remove on February 7, 2012 at 5:00pm

When vendors pull your Used Car Data, it should be restricted in the DMS to only vehicles that have Status Code (ADP) which could be "1" for in stock. No other Staus Code vehicles should be pulled. They should not be allowed to pull sold vehicles.

In addition, their access to Cost should be blocked. Most vendors are pulling the Sell For Price and the Cost of the vehicle. To place you vehicle on the web, they do not need the dealer cost.

So, companies like AutoTrader and Cars.com have both the sell for price and cost of all their dealers. With them having the cost, is can be shared or used against dealers to force pricing lower, just look at their pricing tools

Finally, CarFax is pulling all their dealers RO information, which I believe includes pricing. What a nightmare this could become if this data is used the same way.

I originally didn't think you would need a clearing house for your data (as I think Jim has mentioned), I though you could do it in house, But with the limitation on what you can filter with some of the DMS and the tech knowledge needed, I now think this is going to be the only way for most dealers to protect their data.

Comment by James A. Ziegler on February 7, 2012 at 10:47am

I just sent the preceding posts in an email newsletter to 135,000 dealers, industry executives and dealer employees...

Comment by James A. Ziegler on February 7, 2012 at 10:46am

Is it time to back off and give TrueCar a rest?

When I started these blogs back on November 27th WE came together and voiced our opinions and the entire industry heard us. At the time I believe that TrueCar was the biggest threat to out industry that has ever existed...and that threat still exists in other vendors extracting, assimilating, reselling, re-purposing and sharing dealers' data from our DMS. 

The industry mobilized and we have prevailed. I am pleased we handed them some humility. They are arrogant, and consider themselves "superior" intellectually...and possibly genetically to us "Car Folks". How many times has Scott Painter talked Down to us saying we just don't get it? 

We cannot let our guard down or think we've won the war. There are companies like Edmunds and CarFax who need to come under close scrutiny. What possible reason could either of these companies have to extract dealer data? ...and then use our own information against us. If I were a dealer I would never give it up and would throw all intruders out of my DMS. Even if I were to allow them access, they should be paying us for the data they resell for a profit? Painter has said repeatedly they get most of their data from other sources BUT what we need to realize is those other sources he refers to originally stole the data from a dealer DMS. 

I promise you there are thousands of dealers who are totally unaware there are so many vendors taking so much information out of their systems. Clauses hidden in their contracts that went unnoticed.

The larger battle is only beginning.  2012 is the year of The Data Wars we are going to educate the entire industry and we will villainize These Data Pirates and throw them out with the bath water.

Any vendor who is extracting Data, sharing data, re-purposing data, reselling transactional or personally identifiable data... we're putting you on notice... YOU'RE GOING DOWN. 

We realize that some vendors need some information to perform your services, and we urge the dealers to release that data specifically with a firm written agreement that it won't be shared or resold or published. 

AND all data released to a vendor must be signed off by the dealer principal or corporate officer, NOT some low level employee. 

In short, be advised... We're Coming.

Comment by James A. Ziegler on February 7, 2012 at 10:45am

I've decided to wait and see what happens with TrueCar. From the beginning it was never my intent to see them totally destroyed, although that was always Scott Painter's goal to destroy the retail car dealerships. 

If their new business plan restructures them to being another competitive "Lead Provider" ...not setting prices, then I'm all for backing off completely. As a matter of fact, I might want to talk one-on-one with Scott Painter about it. I have other windmills to fight. Right now nobody trusts them.

I had some really sinister things brewing concerning these people, BUT if what I am seeing, reading and hearing is TrueDisclosure I am prepared to back off the tribe and maybe even work with them some. The biggest issue still remains... Is TrueCar willing to get out of the Dealers' DMS systems? Their new business model gives them no need to extract any data at all if they're sincere.

I spoke with hundreds of dealers in the last few days and most of them congratulated and thanked me for spear-heading the Anti-TrueCar movement. 

I saw Michael Timmons at one of the evening events... reached out and shook my hand and told me his name. ... to which I answered... "YES, I know." and I kept on walking. Excuse me! This guy is one of the them. He is the warm and fuzzy, former "AutoNation" guy who I believe is here to soften everyone up on the real issues. I am sure Timmons is a decent guy and all of that BUT I am not yet ready to be pals with these guys. NOW... that is my opinion based on a keen understanding of how this works.

I do not believe TrueCar has a chance unless their board of directors totally removes Scott Painter... too many car people just flat out don't like him, don't believe him or trust him. 

I also believe Charles Kim is a liability to their continued survival. If I were on the TrueCar board of directors, we would have to make a decision concerning Charles' future. 

The incident with Steven Dietz , Partner at GRP Partners messaging me my son's arrest record and arrest photo was, in my opinion, over-the-top tactic by a person who is not decent. It showed me these are not ethical people, nor are they honorable by most people's standards of morality..

Now I am not saying Steven Dietz is a pompous, arrogant, full-of-himself, idiot...that is a decision only you can make based on his actions and self control or lack of it. 

All I can say, is what kind of guy would do the things he's done and made the questionable (by me) decisions he's made? Would you consider this guy to be an out-of-control loose cannon? I don't know the answer to that...read everything and guard your investments is all I can say. If I were an investor I'd run...run very fast...away from anything Steven Dietz and GRP Partners was involved with. Of course this is all my opinion because I am still in a in a surly mood over what he tried to do bringing my family into it. 

I am extremely gratified and relieved that Scott Painter of TrueCar had the decency and the personal integrity to call me personally and apologize for what this Steven Dietz did bringing my family into it.My kid was arrested when he was 21 years old for driving without a license. Who's kid hasn't had something similar at one time or another? AND Steven Dietz was going to use it to blackmail me? 

Comment by David DeSantis on February 6, 2012 at 8:34pm

Wow, TC was already effed, however this move really confirms how effed they are!  Looking at it from a Customer's perspective, their site is now nothing more than a resource for consumers to determine what they should pay for their new car.  Nothing really unique about that, other sites offer similar price guides.  The way their system is now, is so antiquated for today's consumer, the consumer doesn't want to have the dealer contact them to give them an initial price.  Besides, the three TC dealers in my area, are: 80, 115, 120 miles away for the vehicle I looked up.  Damn, I can think of 5-10 dealers in a 30 miles radius that I could price shop for the same car, after all, they're just commodities, right Mr Painter?  What this move has done for TC, is an even bigger hurdle to jump now.  They have to sell the consumer on why the consumer should do business with a TC dealer, and not all the others in their market.  Taking their 120 mile dealer, where I live in the S. Tier of NY, just looking North, 2 hours I'm in Buffalo, 2 hours I'm in Rochester, 2 hours I'm in Syracuse.  You're talking the entire western park of NY, how many dealers can I buy that same car from in a 2 hour radius?  A lot, what's so special about TC dealers?  I don't doubt for a second that any dealer will tell me that they will offer me their best price.  If I was the one monitoring how many people are registering on TC to get a price.  Man, that would be very depressing job, cause the numbers have got to be tanking!

For dealers, like I said in my other posts, TC is nothing more than a lead generator.  If you're really ok with paying $300 per lead, have at it!

It's worth noting again, with the changes TC is being forced to make, I don't see them ever getting close to the revenue projections that I'm sure were presented to their investors.  From my favorite Shark "Shark Tank", and Dragon "Dragons Den", Kevin O'Leary, "Stop the insanity, You're going to zero!"

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