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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.

Comment

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Comment by James A. Ziegler on February 28, 2012 at 8:25am

OH, By the way...there has been conversation at TrueCar headquarters recently that these Blogs have run their course... at least that's what they're saying in Santa Monica... If they'd really like to see it, we can crank these blogs back up at any time with many thousands of additional page views around the industry. 

Comment by James A. Ziegler on February 28, 2012 at 8:22am

Great insight Criss and Keith... and the answer is ...Painter can never be trusted, and as long as he is employed by TrueCar...TrueCar cannot be trusted. 

Michael Timmons says he wants input on how they can have better relations with dealers BUT then Painter gives interviews about (paraphrasing here) "What Bastards dealers Are". AND, maybe just maybe, we're all a little tired of listening to Painter harangue about how stupid we are. Seems we are smart enough to bring him down. Just me talking here, of course I could be wrong but I don't think so.

Along with flushing the Data they have grabbed, I believe they need to flush Painter to ever achieve any relationship with dealers. It wouldn't be that painful, appears to me that he's used to it. They brag he's started 34 companies? How many of them flushed him? I know CarsDirect certainly seems to have given him the royal boot. Am I wrong?

Comment by Keith Shetterly on February 28, 2012 at 8:03am

@ Criss:  I think what happened with Scott Painter is he had a vision of CarsDirect.com v2.0 for TrueCar, and that vision ran aground on the rocks of automotive professional social media.  Which didn't even exist for CD.com v1.0.

I have an original saying "It's our passions that drive us and our habits that limit us."  Painter fell to his habits of being anti-dealer and forgot completely who was paying his bills--I'd guess it went further, in that he never expected dealers to be this smart.

Welcome, Scott Painter, to the New Media!  Part of which is collective intelligence, in some cases.

I started writing an article about what happened here vis-a-vis Social Media, but I couldn't finish it yet since "here" is not finished.  However, it's a great learning for anyone interested in the true power of social media.

Comment by Criss Castle on February 28, 2012 at 7:57am

The question is then, can Scott Painter be trusted? Will he ever change? He has done a very good job at making himself the national "enemy of the dealer." I'm not sure why he fought so hard for that title, but even if his associates around him call for change, will the leader change?

I bring it back to my original statement about trust. What will TrueCar do with the data they have already sucked from dealers' DMS if they do actually change their platform? What are they doing with it now that some states have called for it to stop? Has the data been flushed?

In order to be trusted, you have to be trustworthy. I believe we will all be shocked at what is revealed in the end. Smart vendors will take action now to re-organize their systems and review their practices, just as dealers are doing now.

Comment by Keith Shetterly on February 28, 2012 at 7:32am

Trust:  It's not what people say, it's what they DO.

Comment by Keith Shetterly on February 28, 2012 at 7:24am

Damn straight, Jason.  There is no longer any gray area on data:  You are with us, or you are against us.

Comment by James A. Ziegler on February 28, 2012 at 6:53am

Jason, that was so powerful I took the liberty of reposting it in several places giving you credit. JIM

Comment by Jason Manning on February 26, 2012 at 8:39pm
I've said it before: vendors have had their run. Now, dealers are gaining intelligence and turning another corner. Best of luck, if you are a vendor who exploited contracts over the last 7-8 years to pilfer dealer data for your own company's research and development, into a new consumer product or site. The puzzle pieces are coming together. Will you be distrusted like TrueCar? Good riddance! If you're not with us, you are precisely against us. TrueCar has become the business model of what NOT to do to a dealer and there will be many more to join them. Don't go away mad. Just go away. You'll change or we will show the door. We are securing our data and future. Don't take it personally if your consumer product fails or stalls, due to our future changes in our approach to your contracts. Don't get bent if we require TRUST to be the underlying theme...
Comment by Ralph Paglia on February 26, 2012 at 12:53pm

I believe that like our industry's business model, the treatment of data that originates from customers doing business with dealers can be seen as cyclical... Up until the early to mid 2000's many OEM's were surprised at how easy it was to get dealers to sign data sharing agreements... This "breaking of the ice" led to many suppliers approaching dealers with the same or similar requests for data sharing of DMS data, truly for purposes of making the dealer's use of software or websites more productive, easier to work with and more automation. This period from about 2004 until 2012 could be called the "Golden Age" of data sharing...

Now, we have entered a time when many outside companies have entered the automotive vertical with a plan to extract this very valuable consumer, inventory and transactional data, while generating a profit by selling that data or using it in ways that dealers are not aware of... Because if they were, chances are those same dealers would not participate. Jim, Keith, Criss and others have brought up the issue of trust several times... The fact is that data extracted by trustworthy suppliers who use that data to target and optimize a dealer's business for profits and maximum revenue is a good thing...

Data used to figure out how much to charge a dealer, or for purposes of enhancing the modeling, targeting and profits of other businesses, both within and outside of the car business is simply not in the dealer's best interest.

Comment by Matt Tucker on February 26, 2012 at 12:36pm

Just got out of church and I have to say is AMEN @Keith & @Criss. You two cover the moving forward points very well. And @Jason, couldn't agree more. It's funny, I see dealers in my area fighting to become dominant on the world wide web "social network" while completely disregarding their true social network, their own community.

@Jim, I am patiently awaiting the whitepaper release. Thanks for all your are doing.

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