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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.

Views: 53270

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Influencer
Comment by Keith Shetterly on April 6, 2012 at 2:19pm

@ Jim:  I don't doubt it at all.


Influencer
Comment by Keith Shetterly on April 6, 2012 at 2:17pm

FYI I borrowed heavily for that on an old 1970's-era item that showed how a product can get screwed up from marketing, to engineering, to production, to delivery.  I always liked it, and I thought it applied here.  Regardless, I'm just trying to highlight the door that TRUECar came in for consumer attention, at least, had little to do with data--it had to do with, and still has to do with (for them or any successor), something very important:  The buying experience our modern customers want.  How much of the "Ten Steps to the Sale" has an Internet buyer done for themselves, do you think?  Shouldn't we adapt to that?  We don't treat house deals like walk-ins, as somehow that buyer (through knowledge and connection) has a lot worked out already.  SO DOES THE INTERNET SHOPPER WHO WALKS IN.  And, if you haven't figured it out yet, nearly EVERY shopper you have on your lot has seen your goods on the Internet (and the majority don't call or email/lead, anymore, either). Shouldn't those advanced shoppers (advanced down the sales funnel/steps) be treated differently than those of the last decade?  YES.  HELL YES.

I'm not, and won't, defend TRUECar's actions in the past.  And I believe our data is VERY important.  

However, if we grab that data pipe and shut it off blindly for all vendors, where does that reach?  We should know what we're doing and how it can affect us.  For example, I'm no big fan of Edmunds, but they use data to send us buyers while making a profit--WHATEVER we think of their methods and usage of data, do we have the $ to replace all that advertising they do?

We should not have been as stupid with this data as we have been, and we need to correct ALL that we can.

However, I believe that the most important question to ask is what is happening to our customers?  How are shoppers changing?  How are we adapting and modernizing?  How much we don't do the latter is exactly shown in how much risk TRUECar really was (and is) as a profit competitor on a sale.  TRUECar didn't create our poor relationship with modern customers.

WE did.  And it is up to us to fix it.  Or suffer the consequences of the "next" TRUECar, etc. that comes along.

My $.02.


Influencer
Comment by James A. Ziegler on April 6, 2012 at 2:06pm

I am told that TrueCar bombed at Digital Dealer. They were disappointed to say the least that there were so few decision-makers with authority present at the conference. 


Influencer
Comment by Keith Shetterly on April 6, 2012 at 1:52pm

We are really missing a point way bigger than TRUECar and data--TC wasn't born from data, it was born from someone chasing our customers with a message about a better buying process (experience).  From my blog of the same name:

Comment by Jason Manning on April 4, 2012 at 2:26pm

TrueCar seems to be the Pied Piper of The Automotive World. They have made it clear, early on, that dealers are unfair in pricing and they want to see salesmen removed from showrooms. They believe there are too many dealers out there. That is their intent, until their CEO recants those statements publicly. The Pied Piper will lead your data down their road, never to return. This is not a folk tale... Dealers who do not know the value of their data are simple minded as a child without higher education. Victims of their own ignorance. Victims of The Pied Piper...TrueCar.

As far as their dealer council members goes, how do they have time to grow a company that is not their own, without some sort of compensation? Must be ego driven. That is nothing new here.

Saying "no" to TrueCar is one of the most recent and intelligent decisions dealers have made to secure their future. It was almost, completely, in the hands of the consumer by way of DMS access and TrueCar's ego.


Dealer
Comment by Thomas Callaway on April 4, 2012 at 1:14pm

 

I would like to see "FULL DISCLOSURE" from all the vendors who extract data from our system (who are all these data partners?). I recently signed up a new vendor and had them modify their agreement to EXCLUDE the permission that they can share with "Data Partners" and other vendors. I can't stress this enough! If we "Dealers" read EVERY agreement and have all these "sharing" items stripped out, there would not be a way for companies like TC to "go around" the dealers to highjack the data. 


Influencer
Comment by Matt Tucker on April 4, 2012 at 11:42am

Mr. Timmons,

  • Who exactly are the companies that extract data and with dealer authoization forward it to TC? 
  • Assuming you will not disclose here, are those companies clearly spelled out in your dealer agreement as to who you be gathering additional data from (not vague statements like 'other data sources')?  If not, why not?

Influencer
Comment by Michael Timmons on April 4, 2012 at 11:19am

@Matt, There are no AutoNation stores represented in the council. Gary was chosen, not for his former affiliation with AutoNation, but because he is a very well respected automotive executive.

As for the question of TRUECar and DMS access. TRUECar's business model is a performance based business model. With the exception of a few states, dealers only pay when a customer that has been introduced to the dealer buys a car. There are companies that extract data from the dealers and only if the dealer allows it do they pass that information to TC. DMS access is only used for sales matching and will continue to be used as a tracking mechanism for our dealers that are on a "pay for sale" model. In subscription model states the dealer has a choice. I understand that this probably isn't the answer you would like to see but I hope it answers your question.


Influencer
Comment by James A. Ziegler on April 4, 2012 at 9:58am

That's a relief I guess.


Influencer
Comment by Keith Shetterly on April 4, 2012 at 9:44am

The list of markets and Autonation stores that I found on www.autonation.com matches none of the stores listed below in the TC DC.  Anyway, that's what I found when I looked.  

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