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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 Tarry Shebesta on April 10, 2012 at 7:06am

Digital Dealer brings out the best in all of us. :)

Comment by David DeSantis on April 10, 2012 at 6:22am

@Keith You are correct in regards to consumers, and all industries need to wake up to the fact that the consumer is in the drivers seat now!  Not the individual business' or industries,  "We the people", has been happening, and will continue to happen.  It's more powerful than anything else in the retail segment.  We all can think of celebrities in the traditional sense, however there's a growing segment of "Internet Celebrities", some that are carrying so much influence to others, that companies are paying them for endorsement of their products. 

All the buyer studies that I've seen, price ranks low on the list for the consumer.  They put more value on the quality of the interaction with the dealership over price.  Which makes total sense, why would you walk out of one place, and go to another?  Because the first dealer did something wrong that you took personally, and you refuse to give them your business.  We are all people, not machines, and I'll even give the first dealership the benefit of the doubt, they may have no idea what caused the persons personal discomfort.  They just missed their opportunity.  This can even happen to a TC dealer.  

  There is a segment of the market that I believe price does take precedence over anything else.  It is the younger buyers, who go through the whole buying process themselves online.  They do all the steps of the sale themselves without any assistance from a dealer.  Once they make their decision on the vehicle, then they research the price issue, and determine what would be a fair price for them to pay.  When they are ready to buy, they will contact the dealer, and tell them what they are looking to buy, and at what price.  This is going to happen more and more at dealerships.

Going back to the consumer issue, I did a post about the book, "The Thank You Economy", by Gary Vaynerchuck.  I highly recommend everyone read it, it is his vision of where he believes the connection between consumers, and brands is going.  http://www.automotivedigitalmarketing.com/forum/topics/you-have-to-...

Comment by Keith Shetterly on April 10, 2012 at 4:36am

Texas Direct Auto does $500million a year as the #1 eBay dealership.  They broke $100million and still hadn't sold much locally, almost all nationally.  They still have commissioned salespeople . . . but they have done more through online pricing, telephone negotiation, Fedex paperwork, etc. in a week than many do in a year.  They sell locally, now, too, as a way to expand what they've done--but it was never their core business.

My point there is that the consumer clearly will accept, and reacts well to, a different process than most of us use.  What is the salesperson in that model?  

Ultimately, all that is up to the consumer.  I think Chris Travell's data is important, but it also renders data in a system where everything is AIMED at the salesperson on the floor.

When the Millennials tell us they don't value cars over their Internet access, fewer teens are getting licenses than ever before, etc., the OEMs are already trying to figure out how to sell to those folks as they move into the car buying public.  And there will be "youth lean" from them, in that they will influence those older as youth always do.

Doesn't mean the salesperson is out of the picture, or the dealer.  It just means that it isn't the Internet that is changing things any more.

It's our customers.

And we better be ready.

Comment by Ralph Paglia on April 9, 2012 at 9:59pm

Regardless of whether or not the TrueCar business model is doomed or destined for greatness, one thing is for sure... The people that TrueCar has been sending to events such as Automotive Leadership Roundtable and Digital Dealer Conference represent the company well, are professional, poised and willing to discuss any issues that any dealers have with an open mind and open ears.  Yeah, TrueCar may be the company a lot of us love to hate, but without question they are fielding a team of A players to represent their company.  I may be one of their harshest critics, but when a member of the TrueCar leadership team asks me to bring any and all upset dealers to him so he can hear the specifics about their complaints, then I cannot help but respect the effort they are making.

Comment by Keith Shetterly on April 9, 2012 at 7:40pm

@ Mike:  If you can say, do you personally agree that the consumer is changing the marketplace, and in ways wider and deeper than just price?  I just see this all as much bigger than TRUECar, bigger than data sources, and bigger than . . . just about anybody has taken on so far.  I do appreciate the efforts you have made, and you have a chicken and egg (historical) issue at TC:  Without the wake-up call from all this attention, TC wouldn't be trying to make positive changes.  And because of the issues that caused the attention, TC has an uphill battle with many dealers and dealer professionals.  

And, yet, I can't shake the perspective that we're all spending a lot of energy about a pricing service and where data goes and doesn't go, when in just a few short years price won't be the strongest determining factor any longer.  

I care lots more about where the consumer goes now than I care where the data goes.  We are amidst a changing consumer mindset on what transportation means.  I realize naysayers will pop up, but they did the same thing in travel--my previously-noted example of a friend who thought she should buy up all the travel agencies because folks "always want the help of a human" . . . well, I don't want that to be us.  Wiped out by the transportation version of Expedia.com.

To everyone reading, really, I wish I had a partner for dealers who helped us chase the customers where they are going.  One day, we'll be looking for the buffalo as the Native Americans on the plains did--and someone else will have taken them and their hides ahead of us.

My $.02.

Comment by Michael Timmons on April 9, 2012 at 7:26pm

@Jim, I certainly wasn't disappointed by our presence at Digital Dealer or the overwhelming professionalism displayed by vendors, TRUECar dealers and non TRUECar dealer alike. Our team met with some great dealers, answered many questions, showcased our new dealer portal and signed up many new dealerships. I even ran into Jerry Thibeau at one of the evening parties, and in good natured fun, he graciously accepted my invitation to take a picture with me. Overall, like the Automotive Leadership Roundtable, I was very pleased with the positive responses from both events. 

Now if you are saying I bombed as a presenter at Digital Dealer, I am sure nobody will ever mistake me for Jim Ziegler or Grant Cardone when it comes to public speaking. Although, I will say that the attendees were very engaged and the Q&A session had great participation. 

I also realize that there continues to be people that dislike TRUECar and I know, for many, that will never change. Regardless, we will continue to make strides toward developing better products for our dealers and investing in driving quality traffic. Hope you are feeling better, and as you know, your constructive input is always appreciated.

Comment by Kurt William Hoppe II on April 9, 2012 at 6:15pm
TrueCar simply needs to dry up and go away. Hope the FTC gets wise and goes after them too.
Comment by Jason Manning on April 8, 2012 at 2:25am
@ Keith, they forgot that old Wall Street fact: "Pigs get slaughtered." I'm sure they know what that means...when you play on both sides of the fence. It applies to our industry too. Your ego will sometimes get in the way of your intellect and sight. That's why I always, at a minimum, stick to The Basics. There is a lesson for any vendor in all of this. Pick a damn side or market position. Try to have it all, like TrueCar, and head to the slaughter house. They brought it upon themselves.
Comment by Keith Shetterly on April 6, 2012 at 2:29pm

@ Debra:  I agree with you.  The irony of TRUECar is that they positioned themselves as consumer advocates against the "mean-to-the-customer" dealers, all while treating their own customers--dealers!--very unprofessionally. "Pot, meet Kettle!" as my aunt used to say.  TC has made a strong effort, via Mike Timmons, to settle as many hot issues as they can within these blogs (and elsewhere, as well).  I have spoken to him pleasantly, myself, several times.  However, a negative reputation amongst your customers is very hard to shake once it reaches critical mass--and nobody really knows yet what that "critical mass" number is.  I'd say, though, without question that TRUECar ran past it rather quickly.  NOBODY's FAULT BUT THEIRS.  Just like that old dealer network they talked (in the beginning) about replacing, they made the SAME MISTAKE THEY ACCUSED DEALERS OF MAKING.  They forgot who their customer is.

Dealers?  Well, they know for a fact that there aren't many CONSUMERS who would forgive that.

Comment by Debra L Bly on April 6, 2012 at 2:19pm

It will take alot more than presenting at a Digital Dealer Conference to change their image.  Just as with a Dealer one or two bad reviews are expected but when you dissapoint the majority of your customers, that will require a whole different set of recovery steps!  Funny now True Car will be dealing with the same problem dealers had several years ago.  Should the dealer group stab them with the horrible customer experience they have had - say in 5 or 10 years?????

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