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ADDED THE CALL: Mr. Painter, TEAR DOWN THIS WALL!

I was challenged by Grant Cardone via Facebook about a few things to do with my stance on TrueCar, one of the challenges being whether I had reached out  to TrueCar about my concerns. I had not—but I thought about it, and so I did!  I emailed TrueCar's CEO Scott Painter via LinkedIn “InMail”, though I’m not sure he’ll get it or respond if he does.
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I reproduce the email, then, below as an open letter on this forum from me to Scott Painter, CEO of TrueCar (I did make a few  VERY  minor changes in this letter from the email for clarity and grammar).   I was limited in the number of characters I could type, so I tried to focus on connecting for further dialog, though I did manage to bring up my real concerns.  However, considering the volatility of this topic, I have concluded that he and his company are building a wall between dealers and vendors, between dealers and consumers, and really between a future with dealers making a profit and a future with only TrueCar making a profit.
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Mr. Painter, you talk in a video about truth and transparency.  Well, President Ronald Reagan, during a speech he gave while standing in Berlin at the Brandenburg gate near the Berlin Wall in June of 1987, famously challenged Soviet leader Gorbachev to open up East Germany.   Paraphrasing what Reagan said that day:


Mr. Painter, Tear Down This Wall!

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-----------LinkedIn InMail 12/9 and Open Letter to TrueCar CEO Scott Painter----------
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Mr. Painter,
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I'm one of your vocal critics in the automotive vertical, mostly because of your stance against the dealer distribution channel, but also because it is unclear whether you are mining sales data directly from dealers' DMS or perhaps through transactional sales data from several of the parties involved in the dealers' data. By definition, it seems what the dealers report is being used by TrueCar, and that also seems a repurposing of dealers' sales data against them in the marketplace.
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I have watched all the videos I can find, including the one from TechCrunch50 in 2008 where you were very clear about what appears a very anti-dealer agenda. I realize you have passionate beliefs, but I have both a tech background as well as dealership experience. If you regard www.dealerelite.net, a social media site membered by thousands of automotive vertical professionals and lurked by thousands more, you will see a thread by Jim Ziegler that has nearly 18,000 page views--a record for auto professional social media. Your employees, Charles Kim and Devin LaCrosse, have only recently been posting on another large thread on the site www.automotivedigitalmarketing.com, and in my opinion it hasn't gone well for TrueCar. I realize better than most what $200million in funding, heading towards IPO, effort can mean.
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After all that intro, which I thought was necessary, my question is simple: Can you instead participate in the marketplace with dealers and find a way to work with dealers so that they evolve into the new markets rather than get threatened with what amounts to sounding like a coming extinction event?
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I realize we may never speak in person, and that you may never even read this. However, I was asked by a prominent person that I know if I had reached out to you--and, after thinking about it, I know that **I** want to modernize the experience. If I could get some time to speak to you, I would only want to try and convince you that there's money to be made by modernizing those dealers that WILL modernize.
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Hope to hear from you soon.
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Keith
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P.S. UPDATE VIDEO 12/16:

Scott Painter agreed to the recording of the call.  Interesting at 12min or so and also at the wrap 48min0sec.  Scott Painter said he does not now, and has never, dipped into the DMS to support his pricing curve.  I said the dealer sold the car, so the dealer is the source of his "sales data" to drive his portal, regardless--and that he was repurposing that data against the dealer.  He said he was giving dealers a great closing tool; I said his $1.5BILLION consumer "savings" included LOST dealer profit.  He said his bell curve pricing was fair; I said, since he forces dealers to price a certain way and NOT set their own price (they have to choose a spot called "Good" or "Great") and that he is inevitably on a race to the bottom just like Jackson of AutoNation said.  He said he doesn't hate dealers; I reminded him of what he said differently at TechCrunch50 in 2008 (and he said he regrets saying that).  He said he also regrets saying that cars a commodities.  He said it was business and good for dealers; I used the hypothetical example ofwww.TrueCEOSalary.com to tell him it was bad for dealers and personal (48min0sec).  And that was the overall mistake he has made, in my opinion.

And the future is, despite his dancing a bit (in my opinion), www.TrueFinance.com, www.TrueGAP.com, www.TrueServiceContract.com.  It's ALREADY www.TrueUsedCarPrice.com, oops I mean www.ClearBook.com.

So, if you don't want to see your industry go the way of travel booking sales and travel agents, KILL THE BEAST!

My opinion.  You listen, and you judge.

Thanks!

Keith

by Keith Shetterly, Copyright 2011 All Rights Reserved
keithshetterly@gmail.com, www.keithshetterly.com
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This is All Opinion--I could be wrong.  eMail me if you think I'm wrong, but regardless do what YOU think is best for your business!

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Comment by James A. Ziegler on December 21, 2011 at 4:33pm

KANSAS AUTOMOBILE DEALERS ASSOCIATION
 

 

 

IMPORTANT NOTICE: Brokering Prohibition – True Car/ZAG

 
To:      The Members of the Kansas Automobile Dealers Association
 
From:  Don L. McNeely, President
 
Various models for motor vehicle sales programs have brought increased attention on marketing practices in Kansas and across the country.  Commentators have most recently focused upon such programs as that offered by TrueCar/ZAG though there are many forms under which a dealer may be functioning, particularly in online arrangements.  This comment will focus upon how such programs can actually unwittingly or otherwise set you up for possible violations of the Kansas Dealers and Manufacturers Licensing Act, particularly those declaring motor vehicle brokering illegal in Kansas. 
 
It is KADA’s opinion that the manner in which programs such as that offered by the True Car program as it is currently structured and being offered in our state do in fact violate the Kansas brokering prohibition.  This is particularly so as it relates to a dealership paying a direct marketing fee, which can be likened to a commission, for each vehicle sold. While it is not unlawful to pay an annual or monthly advertising or subscription fee for vehicle leads, it is a violation of the Kansas brokering law to pay a third party a fee—or other benefit--for bringing buyer and seller together.  
 
It is our understanding that a number of Kansas franchised new car and truck dealers are currently doing business utilizing the TrueCar/Zag format.  It is also our understanding that several formal complaints have been filed with the Kansas Department of Revenue’s Division of Motor Vehicles requesting an investigation of those dealers who have been identified.
 
As a reminder, the Kansas broker prohibition statute was enacted in 1990 and was ultimately upheld by the Kansas Supreme Court in 1992 (Blue v. McBride).  K.S.A. 2010 Supp. 8-2404 (q), (r), and (u) which respectively pertain to new and used vehicle brokering describe prohibited and allowed practices and exceptions (display, advertising, soliciting and acting as a broker).  These are also discussed and tempered in the McBride case to allow for the free exchange of information, but one must still keep in mind that brokering practices are squarely prohibited.  
 
You have to pay attention to the laundry list set forth in the law.  It defines a broker to be any person who, for a fee, commission, money, other thing of value, valuable consideration or benefit, either directly or indirectly, arranges or offers to arrange a transaction involving the sale of a vehicle, or is engaged in the business of (1) selling or buying vehicles for other persons as an agent, middleman or negotiator; or (2) bringing buyers and sellers of vehicles together, unless excepted.  (See K.S.A. 2010 Supp. 8-2401(x).)  As you can see the arrangements that are prohibited forms of brokering describe many elements of the TrueCar program which you should review carefully before engaging in such practices. 
 
Another thing we have heard expressed about marketing arrangements are concerns related to legal issues of privacy, data use and ownership, as well as data access, particularly where a dealer has given outside access by a unrelated third party to its DMS system.  The TrueCar/ZAG structure serves as a significant example of the issue.  It collects transactional data from supposedly various sources to determine “the right price” to pay for a car.  Vehicle pricing points aren’t necessarily the only issue, though.  KADA is of the opinion that this can be ve

Comment by Keith Shetterly on December 16, 2011 at 8:32pm

Thanks Ken!

Comment by Ken Dugas on December 16, 2011 at 8:25pm

Great Job Keith!

Comment by Keith Shetterly on December 16, 2011 at 1:58pm

And the future is, despite his dancing a bit (in my opinion), www.TrueFinance.comwww.TrueGAP.com,www.TrueServiceContract.com.  It's ALREADY www.TrueUsedCarPrice.com, oops I mean www.ClearBook.com.

Comment by Keith Shetterly on December 16, 2011 at 1:32pm

Interesting at 12min or so and also at the wrap 48min0sec.  Scott Painter said he does not now, and has never, dipped into the DMS to support his pricing curve.  I said the dealer sold the car, so the dealer is the source of his "sales data" to drive his portal, regardless--and that he was repurposing that data against the dealer.  He said he was giving dealers a great closing tool; I said his $1.5BILLION consumer "savings" included LOST dealer profit.  He said his bell curve pricing was fair; I said, since he forces dealers to price a certain way and NOT set their own price (they have to choose a spot called "Good" or "Great") and that he is inevitably on a race to the bottom just like Jackson of AutoNation said.  He said he doesn't hate dealers; I reminded him of what he said differently at TechCrunch50 in 2008 (and he said he regrets saying that).  He said he also regrets saying that cars a commodities.  He said it was business and good for dealers; I used the hypothetical example of www.TrueCEOSalary.com to tell him it was bad for dealers and personal (48min0sec).  And that was the overall mistake he has made, in my opinion.

 

So, if you don't want to see your industry go the way of travel booking sales and travel agents, KILL THE BEAST!

My opinion.  You listen, and you judge.

Thanks!

Keith
Find more videos like this on Automotive Digital Marketing Professional Community

Comment by Stan Sher on December 15, 2011 at 11:48am
Comment by Keith Shetterly on December 14, 2011 at 6:03pm

Chintan, I guarantee you that I will have listened to, re-listened, read, and re-read every word available by the time any call occurs.  It's no problem about the timing; it's the holidays!  Thank you, and we'll work it out.

Keith

Comment by Chintan Talati on December 14, 2011 at 5:55pm

Hi Keith,

No problem. I'm happy to listen to your proposal. And hopefully, you've had a chance to review some of Scott's comments on our blog with the open letter. These have come directly from him. I'll be on a plane tomorrow in the afternoon but will be available before and after that. I just want to be open with you in case it takes more than a few hours to hear back from me.

Thanks,

Chintan

Comment by Keith Shetterly on December 14, 2011 at 5:48pm

Chinton, I found your email in my SPAM folder from yesterday about 8:30pm my time (Central),a and I will reply to that.  I don't have a voicemail from you, and I don't have a direct message on Twitter (see below, though I obscured others enough for their privacy but still to identify they aren't you).  I'll answer your email, and I appreciate very much your effort to contact.  I think your resume, which includes Edmunds up to 2010, is a unique qualification for your PR work here, and we'll see what we can work out.

Personally, for that transparency that gets talked about, I would prefer that we talk with an audience of my peers (if they want to listen in on a 1:1 conversation) listening.  I might be able to arrange, or perhaps you can with your larger budget, a GotoMeeting between myself and Mr. Painter that could have some attendees from these boards on listen only?  I realize there might be a short conversation we could have for introduction ahead of that, but these issues sit amid st an uncertain future for dealers everywhere who would like to modernize without general catastrophe.  

So, I'll email you this proposal.  I believe that you have tried to contact me since yesterday, and I appreciate the time you've taken for that.

Thanks,

Keith

Comment by Chintan Talati on December 14, 2011 at 5:18pm

Hi Keith,

Thank you for your note. Scott Painter would be more than happy to contact you. I've reached out to you via e-mail, phone call and twitter over the last few days. Feel free to reach back out to me and we can set something up within the next few days.

Thanks,

Chintan Talati

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