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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 Jason Manning on January 28, 2012 at 10:40pm
When a vendor places a dealer in harms way, legally, we have no choice but to believe they are poorly run and a liability. Seems like growing money was more important than earning it and building trust. There are simply too many facets of TrueCar that have failed us at their core. I'm definitely out on this way of business, relationships and execution. Bring in the virtual PR defibrillators, but I'm out. The end of TrueCar will go down as the beginning of TrueDealer Intelligence. Let's face it, this has been overdue. We have to dedicate our future to self preservation. That begins with data security. That means remaining independent and NOT dependent on one vendor or another. TrueCar seems to be a TrueTrap to me. Users beware. There are so many unforseen directions your data could go. Our future is data driven. Artificial Intelligence is being built in our databases (especially CRMs and Social Sites). It's pretty obvious that certain vendors want to have control of the inventory and pricing data. Users Beware of this. Work towards being Independent or you will be controlled to extinction. It doesn't take a rocket scientist to figure out what vendors have been trying to gather and build while pilfering through dealer data.
Comment by James A. Ziegler on January 28, 2012 at 2:48pm

Sorry, I have been a little absent from this thread recently. 

This coming week I am speaking at Brian Pasch's DMSC  Boot Camp in Las Vegas and Then, the following week, I am a featured speaker at The NADA Convention.

We have some really great surprises scheduled for the TrueCar Folks at the Convention... Right now, they are flailing about in their death throes and I predict they'll be experiencing a lot more pain after the convention. 

They're bravely trying to act publicly as if TrueCar is viable and alive when everyone can see it's dying.  Painter's been here before and he can feel it coming. I am amazed that anyone would back him on any business project considering his track record. 

The way I see it, the Investment World appears to be backing off of TrueCar because of all the negatives brought to light and the magnification of the company's apparent inane mismanagement.

Speaking of mismanagement, I believe GRP Partners is also looking really-really bad here, at least that's the way I perceive it to be. After all they are the financial backers that raised the money to bring this circus sideshow into the market with TrueCar Management and GRP Partners' Investment Advice resembling the antics of the crazy midgets in "Clown Cars" under the Big Top. 

They (GRP Partners) and particularly TrueCar must be rapidly becoming a ridiculous joke in the financial community... and GRP Partners, a long time respected firm must be getting their fair share of ridicule because of this train wreck, which I am assuming was probably Steven Dietz's brainchild. I am picturing the possibility that he's likely to have been the butt of more than a few jokes around the water coolers in the financial community. Needham LLC must have been an embarrassment to GRP Partners and TrueCar as well. Go to www.GRPPartners.com and check it out.

I am just wondering how AMEX and USAA are feeling about being associated with the tarnished reputation TrueCar is bringing to them as well? 

I don't know about GRP Partners command structure, maybe Steve Dietz is the man there BUT I am wondering if the board of directors or the other partners are seeing him as a liability? Just conjecture, mind you, but if it was my company, his position might be standing on a banana peel. When it it was revealed that TrueCar's basic business model violated a number of states' laws, doesn't that smack of total incompetency of all concerned considering it was a $200 Million-dollar crap-shoot? Where was the high-school level due diligence?

It seems to me that if someone in their right mind had millions to invest how could they possibly consider this farce?

How can Scott Painter and Steven Dietz possibility save face considering the continuing series of apparently conspicuous screw-ups they've committed in their business plan reminiscent of a Three Stooges Slapstick comedy. ? Of course I could be totally off track in my thinking here, maybe I'm wrong. I am just thinking out loud about possibilities and possible scenarios. 

Comment by Thomas A. Kelly on January 27, 2012 at 8:58am

Google search today, Page one......Nice Alan!

Woody Butts Chevrolet Doing Away With True Car ! - DealerELITE.net

22 minutes ago - I'm proud to announce that the dealership I work at, Woody Butts Chevrolet woodybuttschevy.com , in Cochran, Ga. is doing away with True Car as a lead ...

Comment by Thomas A. Kelly on January 27, 2012 at 8:55am
Comment by Ralph Paglia on January 26, 2012 at 2:39am

Interesting Info-Video from Thomas Kelly:

Comment by Thomas Callaway on January 25, 2012 at 12:49pm

OK, On Autonews they posted that R&R  (Renyolds) and CarMax were caught selling Dealer Data. As soon as I can find the article I will attach it. I was on the phone with Piston Data who provided me with this information.

This is huge since these companies pride them selfs on security.

Comment by Remove on January 25, 2012 at 7:35am

There are some good questions being raised about AutoUSA and True Car on:

http://www.automotivedigitalmarketing.com/profiles/blogs/autousa-in...

Comment by Keith Shetterly on January 25, 2012 at 7:34am

@ Jason and Tom:  I commented on CH's blog, as well.  ;)

Comment by Jason Manning on January 25, 2012 at 7:33am
@ TK, Clark Howard...just another opinion. He always loses me at: "I think..." If he thought about the local economies that will be ruined by TrueCar, he'd agree with Honda and us. But that's another Clark Howard show. That's how that deal works.
Comment by James A. Ziegler on January 25, 2012 at 4:45am

A Toyota Dealer Writes to me...

 Jim, Thanks for stepping up concerning not only Truecar but all these other Internet pirates  who have figured out a way to become car dealers without a franchise or any other of the costs involved in being a brick and mortar retailer.To me it is the electronic equivalent of just lurking around my dealership and greeting My customers when they arrive and then coming into the store with them under the pretense of protecting them from us in case we were going to try and make a profit.

They claim to have facilitated 235,000 car sales last year as if those cars wouldn't have been sold without them,and at least $299 per car ,they cost dealers over 70 million dollars in income.It seems that they find weak dealers who are incapable of selling cars in their own market and convince them by selling cars into everyone Else's at fire sale pricing that they will become more profitable.

I am a single point dealer who started as a car wash kid almost 50 years ago and have earned and built my store by the old fashioned way but I am not blind to the opportunities provided by the Internet and we use it everyday.

Paying these people a blackmail fee to keep them from directing my customers to a store who has "signed" up to be their delivery service is bullshit and then demanding customers proprietary information is just the tip of the iceberg.

Next they will be offering Financing services,extended warranty,certification for Pre-owned,and other sources of our income.I think the dealers that are signed up with these people should just add the 299 to the transaction price  and pay their sales staff what they have earned.

In many cases the customer will show up here with the "TrueCar Deal" anyway and we will match it if we have to and I won't be paying them a nickel but I am sure that just helping the customer will be enough of a reward to them.

First the Manufacturers should get enough balls to stand up for the guys that invested millions of dollars in facilities and improvements to service their products.Some of the manufacturers and dealers are convinced that this the new way and we had better get on the wagon or be left behind but I am a car guy, we are successful because we have spent years developing relationships with our customers and I am not going to pay the overhead for people that intercept my Internet customers and then demand payment from us for negotiating "No Profit" transactions.

The customer can research invoice cost on any car without the TrueCar and like companies.Take back your store and stand up for yourself and the income of the employees that have helped build your companies.

Dealer Name Withheld

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