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TrueCar Launches National Compliance Campaign and Pro-Industry Product Changes – Press Release

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Just hit the newswire folks… 9:00pm PST

TrueCar Launches National Compliance Campaign and Pro-Industry Product Changes

Sweeping changes include a more balanced advertising approach, revised billing model in some states, consumer membership program, and formation of a Dealer Advisory Council

SANTA MONICA, Calif., Jan. 16, 2012 /PRNewswire/ — TrueCar, Inc., which is devoted to bringing innovation to the car buying process, today announced a nationwide, multi-faceted strategy to tackle regulatory compliance issues and demonstrate its commitment to state regulators, state dealer associations and to better serve its dealer partners.  Among other changes that are taking place nationally, TrueCar implemented a new flat fee-billing model in the Commonwealth ofVirginia, which has been OK with flat fee billing since January 2001. This change marks a significant step in TrueCar’s ongoing compliance strategy. TrueCar’s proactive modifications will include introducing a new billing model in certain states, adjusting advertising presented through the TrueCar website, establishing a TrueCar National Dealer Council, and launching a new consumer membership program.

(Logo:  http://photos.prnewswire.com/prnh/20110401/LA75616LOGO)

TrueCar announced this initiative as part of a “listening tour” by senior company executives that included visits with key constituents including dealer groups, dealer associations and manufacturers across the nation. “These meetings have been incredibly constructive.  We are in the business of innovation.  As such we have to embrace change as part of what we do,” saidScott Painter, Founder and CEO of TrueCar, Inc. “The feedback we have received, both good and bad, will enable us to better serve our dealer partners, and the industry overall. The changes announced in Virginia are a great signal that collaboration with state regulators can result in a constructive outcome for consumers and dealers.”

Compliance is an essential element of TrueCar’s mission. TrueCar has been engaged in discussions with regulators in several states regarding its fee structure and/or advertising issues.  TrueCar is responding immediately to any state concerns as part of a comprehensive national strategy, with a goal of achieving 100 percent national compliance. In the meantime, TrueCar has voluntarily suspended service in Louisiana, Colorado, Nebraska and Oklahoma in order to make certain changes to improve TrueCar’s service and to protect its dealer partners.  The company expects to have certain changes implemented in January.  “TrueCar’s dealer partners are central to our success and ensuring compliance is the foundation of TrueCar’s strategic commitment to dealers.  We will not put our dealer partners in jeopardy,” said Stewart Easterby, Executive Vice President of TrueCar, Inc.

Subscription Billing Model To Be Rolled Out Nationally

Most states have some version of either bird-dogging or brokering laws on the books.  TrueCar is taking a proactive national approach to this business model issue, shifting to a subscription-based billing model in those states where there is potentially an issue. For example, in California the company will be voluntarily and immediately commencing work on implementing its subscription-based model.

Over the long term, TrueCar will continue to work with state regulators in an attempt to identify ways to update existing laws and regulations to take into account innovation made possible by the digital age.  These innovations include the ability to help dealers achieve accurate performance metrics for their marketing spend and 100 percent visibility into their partners’ performance.

Dealer Management System (DMS) Data Practices

TrueCar is committed to maintaining the highest data standards including limiting the collection of information.  TrueCar does not sell dealer DMS data and does not use dealer DMS data for any purpose other than matching vehicle sales to customer leads and monitoring performance to enhance TrueCar’s service to its dealer partners. In addition to only collecting information with dealers’ permission, TrueCar is committed to working with dealers to enhance dealers’ control over access to and use of DMS data, including limiting the fields of data that are received from DMS to those fields necessary to perform the sales matching function.

Changes to Address Advertising Issues

TrueCar will implement important changes to the website to address certain advertising issues. As part of its commitment to its dealer partners, TrueCar will also develop new messages that focus on important dealer attributes, like proximity, selection and service rather than simply price. “Bottom line is we’re out listening and talking to the industry.  What we heard is that dealers feel our ads focused on price and did not tell a positive enough story about our dealer partners. We’ve listened to their concerns and are making adjustments. Qualitative considerations that drive purchase other than price will have greater prominence in future ads.” said Stephen Hansen, President of TrueCar.

National Dealer Council/Dealer Initiatives

TrueCar is also announcing several changes to take into account feedback and better serve its dealer partners:

  • Effective immediately TrueCar will be enhancing its TrueCar Price Report to enable dealers to more effectively market themselves, by providing consumers and dealers a much more balanced view of the market.
  • TrueCar will introduce its first-ever National Dealer Council in the next few weeks. The Council will serve as an important venue for TrueCar to hear dealer feedback – good and bad – on TrueCar’s products, processes and policies.
  • TrueCar will enable statistical and other tools to identify dealers with extreme price outliers.  TrueCar recognizes that price outliers may interfere with a sustainable dealer/consumer ecosystem and will work to alleviate these issues and include important qualitative factors in the decision process.
  • TrueCar will be making product, policy, and process changes throughout the entire business to enhance dealer confidence in TrueCar.

Consumer Membership Program

TrueCar remains committed to innovating to ensure higher lead quality for dealers and enhanced brand protection for OEMs.  Based on OEM feedback, TrueCar will introduce a new consumer membership program, which TrueCar believes will substantially alleviate the concern. With this change, dealer partners can expect even higher quality introductions from TrueCar. In the end, consumers and dealers benefit.

About TrueCar, Inc.

TrueCar, Inc. is an automotive solutions provider focused on changing how cars are sold by providing a significantly better customer experience while helping qualified dealer partners to gain incremental market share and reduce costs.  TrueCar is a visual publisher of new car transaction data.  TrueCar price reports help both dealers and consumers to agree on the parameters of a fair deal by providing an accurate, comprehensive and simple understanding of what others actually paid recently for a similar car both locally and nationally.  TrueCar works with a national network of dealers that provide up-front, no-haggle, competitive pricing to assist some of the nation’s largest and most well respected membership and service organizations to meet the auto buying needs of their members and customers.  Collectively these audiences represent over 1M in-market customers each month.  TrueCar is headquartered in Santa Monica, CA and has offices in San Francisco, CA andAustin, TX.  With 131 percent annual growth since 2006, TrueCar has helped dealers sell over 400,000 vehicles and is developing a suite of products and services centered on radical clarity as a result of comprehensively analyzing market data and information.

You can follow TrueCar on Twitter and become a fan of TrueCar on Facebook.

Disclaimer

This press release and the information contained herein is for noncommercial use on “as-is, as available” basis and may be used for informational purposes only.  TrueCar makes no representations or warranties, express or implied, with respect to the information contained in this press release and the results of the use of such information, including but not limited to implied warranty of merchantability, fitness for a particular purpose and non-infringement.  The information contained in this press release may include technical inaccuracies or typographical errors.  Neither TrueCar nor any of its parents, subsidiaries, affiliates or respective partners, officers, or directors, employees or agents shall be held liable for any damages, whether direct, incidental, indirect, special or consequential, including without limitation lost revenues or lost profits, arising from or in connection with your use or reliance on the information presented in this press release.

Available Topic Expert: For information on the listed expert, click appropriate link.

Scott Painter | https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=94535

TrueCar Goes Too Far

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Look, I’ve not been a big supporter of this TrueCar lynchmob for a few reasons. I don’t believe that TrueCar is solely responsible for all of the issues pointing their way. In my opinion, they are just a very visible and convenient target for a much wider-spread problem. My position has always been that the dealer needs to police its own data, not get mad at a vendor that’s been taking it and repurposing it. If you don’t want any vendor to have access to your DMS, don’t give it to them. Be mad, yes, but at yourself.

Transparency on the internet is not going away. Consumers won’t allow it. There are many third party sites that operate in a similar way to TrueCar. Getting rid of one is not going to stop other sites from taking their place.

If TrueCar is really changing to conform to state regulations, that’s a step in the right direction. You can’t blame THEM for the race to the bottom, dealers are to blame. Steve Stauning laid out the argument perfectly in his recent blog post: “How TrueCar.com Caught Dealers Off Guard”

This post, however, is not to debate whether TrueCar is right or wrong or any of the arguments for or against them.

I read today that TrueCar has purchased some interesting domain names from Domain Name Wire.

They are:

F*ckedbytheDealer.com
F*ckedbytheDealer.net
F*ckedbytheDealer.org

Now I don’t know about you, but that certainly doesn’t seem like a “dealer partner” to me. The only reason for buying those domains is to attract consumers who are pissed off at dealers. I mean, c’mon, anyone who wants to buy a car (which is what TrueCar is supposed to help people do easier, right?) and is searching with those keywords may not be a customer I want to have. That’s pretty extreme. Even if they optimize for DIFFERENT keywords, the fact remains that if someone were to click on that URL (after reading the domain name), I highly doubt they’re going there to try and buy a car. Chances are they’re going there because they feel like they’ve been.. well.. “f*cked by the dealer”. Now you’re going to try and massage that and send them to a dealer? What?!?

That’s a CSI nightmare waiting to happen and probably on a loser deal. (Not that the amount of profit should make a difference.)

Is this a preventative tactic? What will they actually PUT on those websites and/or where will they redirect them? Time will tell.

Like they didn’t have enough heat to worry about.

[NOTE: Since this post, I’ve added a new comment feature. Comments prior to today can be seen by scrolling down further under the “About” block of text.]

BMW Dealer Customer Service Fail Goes Viral

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A customer comes into your dealership because the warning lights come on in his Certified Pre-owned BMW after your service department tells him to bring it in immediately. He comes in and your first tier tech tells him the lights only apply to an emissions issue which doesn’t apply in his state, promptly turns the warning lights off and tells the customer he’s “good to go”. The customer leaves and two days later, the steering fails on his car while driving 65-75 mph on the freeway causing him to crash off the side of the road. When he complains to the GM, no apology is given and he’s told to bring the car back in. He expresses concern about his trust in the dealership and says he wants to go to a different one and is told that he can only bring the car there.

He then goes online and starts asking questions in a brand-enthusiast forum. After getting some information and advice from his peers, he meets with the GM at the dealership where, after expressing his concerns about the dealership’s service quality, the GM asks “then you shouldn’t even be in my office wasting my time”. The customer then agrees to let the dealer pick up his car via flatbed to look at it but is denied a loaner car.

Someone at your corporate office sees his online forum posting and has the corporate LAWYER call the customer requesting that he remove his online posting. He refuses and takes the car to an independent mechanic where he is told that the codes indicate issues with “steering and stability control”.

BMW North America gets involved. They ask the customer to bring his car into a different dealer and promise to fly in a team of specialized engineers. They confirm the steering and stability issues, charge him his $50 deductible and only fix two issues that are covered under his CPO warranty. Neither the corporate office or the dealership will explain to him what was wrong or take any responsibility and, when asked why, they say they “don’t appreciate that (he’s) made this a public issue on the forums.”

Yes, this really happened. What a train wreck.

The dealership? BMW of North Scottsdale. (a Penske Automotive dealership)

This story made the website “Jalopnik” yesterday. The article (in which the dealer is not only named but linked to) “Did a Dealer Ignore a Faulty, Dangerous BMW?” has received 27,334 unique visitors and has 209 comments. In one day.

The original forum post has 327 comments on it in less than 30 days and has been viewed by 27,956 unique visitors.

The Jalopnik article is now in the #6 position on Google Page 1 for a search for the store’s name, four spots up from their DealerRater page.

 

bmw

We’ve all experienced irate customers. We all make mistakes. There were so many opportunities for customer service to appear by so many different parties (technician, service manager, general manager, corporate office, manufacturer, the second dealership, and, of course, the corporate lawyer), yet it never did and now the dealer and BMW have a PR nightmare on their hands.

One forum poster actually said this: “Scottsdale BMW got a pretty good rating at dealer rater…shall we change that?”

What would you do if this happened at your dealership? How would you handle this?

Who Is Tapping YOUR DMS?

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There is a lot of controversy in the automotive industry regarding which vendors are pulling data (customer or transactional) from a dealer’s DMS and then re-selling it to vendors like TrueCar and others. (I guarantee you that TrueCar is not the only vendor that’s using your data against you, FYI)

[Note: For non-automotive industry readers: DMS stands for Data Management System and is what contains all customer, financial, vehicle and transactional data (ie. all that information on the credit application you filled out when you bought that car). There are dealer vendors (website companies, 3rd party services like TrueCar.com, Edmunds.com, Cars.com, etc.) that are given access to this information for various reasons.]

Consumer privacy laws and red flag compliance keep getting stricter and stricter when it comes to customer personal information and how it needs to be protected. This is all well and good but I’d argue that most consumers don’t care about their personal information. They may say they do but actions speak louder than words.

An industry acquaintance shared a website yesterday that assists people in seeing, and cleaning up, which apps and websites are accessing your various social media accounts. (You can find it at http://mypermissions.org/ )

As I played around with it, there wasn’t much in there that surprised me but I’m also very diligent about which apps I allow to access my information and I periodically monitor them to remove permissions for apps or websites I no longer use. Even though I do that, there were a few in there that I was surprised to see. I guarantee you that a normal consumer has way more apps and websites accessing their personal information than I do – games, iPhone apps, websites with social media log-ins, plug-ins etc. Most require (or ask) to access your personal information to use their service. How convenient is it to use Facebook Connect? It’s super-easy but, every time you do, you are giving yet another website or app permission to access your personal information – essentially trading your information for convenience and/or the ability to utilize that particular website.

As I thought about this collection of different social media sites – Facebook, Twitter, G+, LinkedIn, etc. – it started to feel more and more to me like this was MY OWN PERSONAL DMS.

These accounts – singly and collectively – contain more personal information about me than any other source including the government.

Those social networks are free to use, but are they really? In one sense, they do exactly what your vendors are doing to your dealership’s DMS – selling your personal information for profit. Most consumers know this on some level and have chosen to allow that access in exchange for their information on some level. Sure, there are times when a consumer outcry occurs –  say when Facebook changes a privacy setting – but those quickly go away mostly because the consumer modifies the permissions again (ie. who can see your posts or other activity on Facebook).

So consumers do care about protecting their information, posts, etc. from people on an individual level, what they’re not shielding themselves from or thinking about is what companies are getting their personal data (either from the sites themselves or from outside apps and websites that they’ve allowed access) and what those companies are doing with it.

So, while we’re in an uproar about what vendors are getting access to customer data and what they are doing with it, keep in mind that you also have your own personal DMS and, just like you should care who has access to your customer’s information, you should care about who has access to your own.

Fantasy Guru’s Social Media Fail

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guru2

My brother is a fantasy sports freak. He especially gets into football. Every Sunday, you can find him firmly planted in front of my TV watching my Sunday Ticket subscription with his laptop in his lap cycling through his many teams refreshing his fantasy football scores. You’d think he was in the stadium sometimes as he yells (or cheers) at the television. He’s also hyper-competitive.

We play in one league together and, at any point in time, he knows, off the top of his head, all the league’s statistics. Who’s in first place..Who has the most points..Playoff scenarios..etc. He’s made 74 roster changes whereas the rest of a 12 team-league has made a combined average of 11 moves (and that’s with my above-average 37 moves included). I stopped checking Yahoo for my scores and info. I just ask him now.

He’s been a fan of, and subscriber to, a premium fantasy football website named FantasyGuru.com run by John Hansen who has been affiliated with major companies and personalities including hosting a radio show, SiriusXM Fantasy Sports Radio with FoxSports.com’s Adam Caplan which was so popular that it became a seven-day-a-week program during the NFL season which included senior writers Matt Camp and Joe Dolan. He’s participated in celebrity drafts including Ashton Kutcher, has published on ESPN.com, and has appeared on television in projects with NFL.com, NFL Network, DirecTV, ComCast SportsNet, and even a cameo on an episode of FX’s The League.

This week my brother is particularly passionate as he’s playing his big brother (me) in our league’s playoffs. He uses the advice and statistics from this website to help him analyze players, waiver wire pickups, and to assist him in choosing his lineup each week.

He’s not a social media person. That being said, he does have a Twitter account. It has only 1 follower (me) and he’s tweeted only 4 times. The ONLY reason he has a Twitter account is to watch the tweets of @Fantasy_Guru to get up-to-the-minute injury reports and news.

So, in this weeks projections, one player – Donald Brown of the Indianapolis Colts – was projected to do well on a combined list of running backs and wide receivers. Long story short, the player hardly played at all and ended up with low points.

Because of his passion and the desire to win against his big brother and advance to our league’s championship, he tweets this out to the Fantasy Guru twitter account:

rafe

Keep in mind that this guy (@Fantasy_Guru) has over 25,000 followers. He gets mentioned and/or tweeted to continuously. My brother is square in the middle of his demographic – hyper-competitive people passionate about fantasy football. It’s hard to believe that his analysis isn’t challenged or critiqued by other people via Twitter. The guy isn’t always right but I don’t think anyone really believes he has a crystal ball.

For whatever reason, he took exception to this particular tweet and sent this direct message in response:

guru

My brother only followed him and has only 1 follower. @Fantasy_Guru has 25,009 followers and follows only 266 and (obviously) doesn’t follow my brother. I understand that. He follows sportswriters, teams and players to get information which he then passes along to his subscribers/followers and he does it very well.

First, seeing as this person runs a BUSINESS in which he charges ~$30 per year, you’d think he’d be more careful alienating and lashing out at people. Notice that he chose to direct message my brother rather than reply publicly. This was particularly frustrating to my brother since he couldn’t respond to the message since @Fantasy_Guru doesn’t follow him. That’s certainly not a way to treat paying customers and a poor choice on his part. My guess is he chose to direct message because by replying like that publicly would make him look bad.

Little did he realize that my brother has been a subscriber of his for 11 years and has referred many people to also subscribe to his service. While $330 in income may not mean anything to John Hansen, it is definitely a luxury to my brother. The amount of money doesn’t excuse abusing your customers.

It took him about 10 seconds to destroy a loyal customer. Not a smart business decision.

Now my brother follows nobody.

Social media is a powerful medium. No matter what size your business is, customer service matters. Do you think Southwest Airlines or Ford would ever think about responding to a customer this way?? Imagine this DM coming from Southwest: “You set up a Twitter account just to complain? Go fly another airline.” Not going to happen. Any employee who did that would be fired instantly. Ask Scott Monty or Christi McNeill.

As the old saying goes, “A happy customer tells 10 friends, an unhappy one tells everybody.”

Now thousands of people will know that he apparently doesn’t value his subscribers.

[UPDATE: Apparently Matt Camp read my article. His response was to make fun of a math mistake (which I’ve since edited). I guess he values his audience just as much as John Hansen does.

[UPDATE 2: I guess John Hansen got annoyed with my tweets as he’s decided to block me. Can’t take the heat?]

Target Gets Robbed via Facebook Promotion

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In yet another example of “promotions gone wrong”, Target just got robbed by it’s Facebook fans and a bunch of thieves opportunists.

Target-Fail

Target had a promotion via its Facebook page for a coupon which gave a customer a $10 gift card for spending $50. The coupon could be printed only via coupon printing software and you could only print it a certain number of times, yet the coupons did not have unique barcodes. (Kinkos anyone?) It was a great deal for Christmas shoppers or even grocery shoppers (via a Super Target) but a bunch of people figured out how to game the system and abuse the promotion.

I became aware of it through SlickDeals, a forum for bargain hunters. As people used and experimented with this coupon, they found that they were able to purchase gift cards and get the corresponding free $10 gift card from the promotion even though the coupon stated that gift card purchases were ineligible. Also, seeing as the coupons were not unique, any photocopier skirted the whole printing limitations from the coupon printing software.

As you can see via this 37 page thread with almost 1500 posts, people found that they could effectively rob Target legally (At least I think its legal. I’m not an attorney.) What they found they could do was this:

They would buy a $50 Target gift card, use the coupon and get a $10 Target gift card free. They would then purchase another $50 Target gift card using the FIRST $50 Target gift card to pay for the SECOND Target gift card, use another coupon and get another $10 Target gift card. (Initial purchase: $50. Profit: $20. etc.) Rinse and repeat. (Since you’re not actually purchasing anything, you’ll always have your initial $50 in the form of a gift card and, since you’re using the gift card to buy more gift cards, each transaction just nets you $10.)

There are a number of people who claim to have netted as much as $5,000 in free Target gift cards off their initial $50 investment. This promotion started November 30, 2011 and ended December 3, 2011.

What was surely as a result of the “resounding success” of the first coupon (probably solely judged by redemption quantity), Target decided to bring back this promotion 4 days later (December 7, 2011 through December 10, 2011). I’m sure someone at the corporate office was so impressed by the results, they wanted to start giving people raises and handing out trophies to stores for having the most “loyal” fans in their area.

By re-starting the promotion, you can see via this second thread which is 51 pages long with over 2000 posts, they effectively green lighted all of the original people who abused the promotion to do it again and also allowed those who missed out on the first opportunity to rob Target to join in the looting. This was a concerted effort by people who conspired to abuse this program on a national level. (Gotta love the internet!)

The thread is addicting to read. It’s like watching a train wreck reality show. It’s hard to believe that someone somewhere connected to Target isn’t watching this. In fact, based on statements made by the Slickdeals moderators, Target was aware (however minimally) of the thread since they asked SlickDeals not to post a PDF or image of the coupon. I’m sure they wanted the web traffic to their website versus to SlickDeals.

The dedication, time and effort invested by some of these people is impressive. I’m also astounded by the apparent lack of training or caring shown by the Target employees who allowed this coupon abuse as well as the failure of store management to recognize that it was happening in the first place. This failure and lack of training is obvious due to the inconsistency of success these people report experiencing. When you have to start disguising yourself, visiting multiple cashiers and you get rejected but still keep trying, an intelligent person would know that they are, at the very least, doing something wrong, even if their conscience hadn’t already told them that earlier.

Oh, and to put further emphasis on the failure of this promotion, many of the looters people, once they had collected as many free gift cards as they desired (or the promotion ended), then took all those free $10 gift cards and proceeded to buy Visa and Amex gift cards with them, thus negating them from even having to spend the free money they stole got from Target at Target. I’m sure other retailers appreciate Target’s monetary infusion into the economy and into their store’s Christmas bottom line. (Hey, I got a bunch of free Target gift cards, let’s go spend them at Wal-Mart!)

In my opinion, this tops the absurdity of the “Kindle Fire Deal That Wasn’t Supposed To Be” post I wrote a few weeks ago, and is another reason why social media promotions must be monitored and measured carefully. Just looking in your computer and seeing how many coupons were redeemed, at least in this case, isn’t an indicator of how effective the campaign was. It was an indicator of how screwed over Target got.

Merry Christmas, Target!

Why locking your DMS is not practical

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There is a lot of discussion surrounding TrueCar and how dealers should not use their services and why they are bad for our industry and dealers in specific. I wrote a blog recently titled “In Defense of TrueCar” that many interpreted as my support for their services.

In reality, the main point of my blog post was that everyone is pointing fingers at TrueCar right now saying how evil they are and how they are using a dealer’s data against them, however, nobody is mentioning the fact that, at some point in time, through some avenue, a dealer allowed their customer and financial data to be extracted and used. Dealers need to accept responsibility for this data being available in the first place. No matter how indirect that permission for data use was gained, ultimately, you allowed it.

My opinion of TrueCar is that they are a marketing and lead source for your inventory. I personally liked the pay-per-sale leads vs. the pay-per-lead pricing model. I don’t blame TrueCar for using your data to drive leads to you. There are many companies that use your data, crawl your website or obtain your financial and customer data and use or resell that data and then use it for their own monetary gain. They spend tons of money on SEO to drive consumers to their website where they convert the lead and resell it to you. There was a conversation about this for awhile too. The fact remains is that they spend the money to do it, are better at it than you and dedicate resources to accomplish this. Even OEMs do this and sell the leads to their dealers. If you want to dedicate the budget, time and resources to do this, you can do it also but don’t blame them for doing something you ultimately both aren’t going to and don’t want to do.

One of the suggestions that has been made is to lock everyone out of your DMS. This is really not a practical option. Many website companies do not have the ability to extract inventory data from your DMS so, ultimately, they outsource the data polling to another company whether you know it or not. In most cases, it’s transparent. There were many times when I was with HomeNet Automotive that a dealer had no idea that we were already polling their DMS on behalf of some vendor or another that they were using. In fact, most vendors do not have the ability to directly poll your DMS so unless you use no 3rd party vendors whatsoever, you really can’t lock your DMS. This includes desking software, pricing software, inventory management, etc.

If you lock everyone out of your DMS, you will have no inventory marketing whatsoever, and that includes having your inventory on your website.

Am I saying you shouldn’t be aware of who is getting your data? Not at all. You should know who is getting it, what they’re getting, and, most importantly, what your agreement with them allows them to do with your data.

It is your responsibility to protect your data through aggressive policing and review of your vendor partner contracts. You need your DMS polled to market your inventory and market to your customers (if you use any service to do this), get deals financed, and have any sort of integration with other software you use and your DMS.

When Reynolds and Reynolds took steps to police and protect dealer DMS data, dealers complained that they should have full control over their data and who gets it. Even in the cases of Reynolds implementing stricter and more difficult ways for a non-Reynolds Certified company to poll the DMS, dealers would allow third parties to create and install workarounds to this or they would manually create and upload the reports to their vendors. Now dealers are complaining that the data is being misused and/or used against them. You can’t have it both ways.

Accept responsibility and choose who gets your data, what they get, and what they are allowed to do with it.

Stop pointing fingers at TrueCar.

In Defense of TrueCar

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There’s been a lot of talk about TrueCar lately in automotive industry forums blasting them for their business practices and how “evil” they are. There’s a thread on DealerElite with over 33 PAGES of comments [edit: 50+ pages] in response to Jim Ziegler’s question:

“TRUE CAR and ZAG Cyber Bandits: Parasites or Good for the Car Business?”

..and even a video from Jerry Thibeau of Phone Ninjas who has a very strong opinion:

(Edit: I guess TrueCar didn’t like the video. It appears that they had it removed.)

My experience with HomeNet Automotive (the leading automotive data distribution company now owned by AutoTrader) gave me unique insight from all perspectives: vendors, 3rd party inventory sites and dealers.

Whether you think TrueCar is good or bad for the automotive industry, you have to step back and consider a few things:

(In regards to TrueCar having, and using, a dealer’s sales data) In the early days of inventory marketing, it was the general thought that having your inventory on every 3rd party site possible was a great idea. Most dealers signed up for every 3rd party site they could, especially if it was free. When I was an Internet Director, I signed up for them all also. When I was with HomeNet, I talked to many Dealer Principals that wanted their inventory everywhere. Most never read any “terms and conditions”, they just signed up. Any of these third party sites could have been polling their DMS for not only inventory but sales data and they never would have known. Nothing’s free. It wasn’t until recently that people started questioning the wisdom of shotgunning their data and, even then, it had nothing to do with whether the sites should have it but how it was effecting their SEO efforts and how the sites were using their data to collect leads then selling those leads to the dealer. It had nothing to do with the fact that they HAD the data in the first place.

When HomeNet Automotive integrated TrueCar into their inventory management tool, (IOL Pro), as a rep, I visited many dealers who loved the TrueCar feature and ability to use reports to close deals and research competitor pricing. Only a few even questioned where the data was coming from and in only one case was a dealer actually upset that we (ie. HomeNet) had the sales data at all. The fact remains that this data was given voluntarily by the dealer to hundreds of 3rd party sites, each with their own terms and conditions, and any of which could have been polling their DMS for sales data and, in turn, providing it to TrueCar, Edmonds, AutoTrader, etc. or any of the hundreds of other sites.

(In a now amusing tangent, industry people demonize Reynolds and Reynolds all the time for protecting their data (ie. not allowing unauthorized 3rd party access) and throttling their control over distributing it to just anybody and now these same people are complaining about 3rd parties having the data.)

Now, onto the lead program.. People are complaining that TrueCar leverages the dealer’s data (which the dealers are giving to countless websites already) to provide consumers information on the lowest prices for vehicles, converting the lead and offering it to the dealers on a per sale cost of $300 versus a per lead basis. Why is this so evil?

There are plenty of 3rd party sites that do the same thing with the only difference being that they charge per lead. Hell, even MANUFACTURERS do it. When I was in retail, I used a company with a similar pricing strategy named Autotropolis (since bought by Autobytel for $15 million). I LOVED those leads. I could easily identify a lead from them and factor in the $250 per sale fee into any deal structured or quote given to a consumer. I only paid when I sold a car. It was great. At least on a per sale basis, my cost per sale was fixed. With 3rd party leads, it wasn’t. I hear dealers complain about $900+ costs per sale with their AutoTrader programs yet they still participate. The point is that I was always in control of the sale. If I didn’t want to sell the vehicle at the pricing given to them, I didn’t. It was my choice. The fact is that I would rather have the opportunity to earn the sale than not have it. Why wouldn’t you want a fixed cost per sale on internet leads? 

Dealers have been sending their transactional and inventory data to 3rd parties for YEARS. This isn’t some new phenomenon that’s all of a sudden appearing. Everyone wants to single out TrueCar when, in fact, TrueCar is only ONE OF MANY companies that have their data. Dealers have willingly and happily provided this data to 3rd party sites for YEARS (at least as far back as 2003 to some sites that I personally know of).

To top it all off, dealers and industry professionals have been evangelizing transparency in their sales processes, pricing and interactions with consumers yet it appears that dealers don’t really want transparency, what is wanted is the illusion of transparency.

Bottom line: If you don’t want your data used by a 3rd party, stop giving it to them. I’m not just talking about TrueCar, I’m talking about EVERY 3rd party.

TrueCar is a business that pays for information received from the dealers themselves. Rather than demonizing TrueCar for monetizing the data by providing a service to both consumers (via transparency) and dealers (via sales), don’t participate.

As the saying goes: Don’t hate the player, hate the game.

(Edit: TrueCar is just a scapegoat and convenient target. I don’t necessarily disagree with all of the arguments, just the placing of the blame on TrueCar. Dealers created this, not TrueCar.)

UPDATE 12/1/11: Seems as if my friend Jerry created a new video.

When Dealer Promotions Go Wrong

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In browsing a popular deal website, Slickdeals, I noticed a thread titled “20% off all new Chevrolets (Arizona)”. Out of curiosity, I thought I’d check it out. I was more curious to see if the dealer (or an employee) posted this or if it was something that a forum member posted.

Wow. Talk about negative publicity. Here are some choice comments from the thread from people who TRIED to take advantage of this deal posted on the dealership’s website (which does actually say “20% off All New Chevrolets”) and one local customer who decided to chime in about his buying experience at this dealership.

“Interesting. Called the dealer and he stated that the deals are good for Arizona residents, although this isn’t stated anywhere on the website. Doubt very much that the OP was successful in securing a car from these guys. I was trying to buy a Chevrolet Volt from them. The salesman was very accommodating, suggesting that I falsify my residency to obtain the price. Imagine that, a dealership suggesting that we do something illegal so that we can take advantage of their poor advertising and sales tactic. Unfortunately this is another example of one poorly run dealership proving the stereotype that all dealers are thieves. Sad really.”

“Get ready. My deal went all the way to the owner. Just another car dealer living down to their reputation.”

“I’ll be interested to see if any of you get the deal. I live close to this dealership and recently tried to buy a new truck that was listed in an ad. Went to the dealership that morning and was told that the truck listed in the ad “wasn’t available.” The salesman offered me a truck with the same exact options, color and sticker price as the one listed in the ad, for $2,000 more than the price listed in the newspaper.”

They even included a response e-mail from the Internet Manager at this dealership that they got when inquiring:

“Hi Chris … Thanks for your email 11-27-11 on the New Chevrolet Volt #120126 and choosing Sands Chevrolet in Surprise for your next Chevrolet purchase.

This Volt is available from Inventory here in Arizona. Is that a CRAZY PRICE or what? $7,500 of this Huge Discount will be in the form of a Tax Credit at Year End Tax Time, and you will also need to be a Resident of Arizona to purchase at this Special Price.

There are no Rebates or Special Interest Rates at this time. Please call or email me.

Thanks
XXX XXXXX
Internet Manager”

 

To date, over 5,000 people have viewed this thread.

That’s 5,000 people who were interested enough in buying a new Chevrolet that they clicked on the thread to get the details and found the above types of comments.

Done right, that could’ve been 5,000 leads. This probably led to 5,000 people who aren’t going to buy a car at this dealership.

The Kindle Fire Deal That Wasn’t Supposed to Be

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[UPDATE 12/2 – This phenomenon is still going strong. People are STILL trying to get this deal.]

For many, Black Friday has become more about the “thrill of the hunt” than about a real need for savings. People lined up 9 days early at a Best Buy in Sarasota, FL. In my opinion, there really wasn’t anything worth waiting NINE DAYS IN LINE but, hey, that’s just me.

xlarge_kindle-fire

On to the sale that wasn’t supposed to be.

A Target store in Trumbull, CT didn’t have enough Kindle Keyboard 3G’s in stock for their Black Friday sale so, in an act to make their customers happy, they decided to sell their stock of Kindle Fire’s at the same discount (38%) that was being offered in the ad for the other item. This effectively reduced a very popular, just-released item from $199 to $123.38 plus tax. Kudos to them.

One of the people who managed to get this deal (and it is a good deal) decided to post the deal to a popular deal website, Slickdeals, to inform other bargain shoppers. Many people saw the deal and attempted to get their local Targets to sell it at that price to little success. Then one person attempted to get the item price-matched at a Wal-Mart using the display pictures and receipt images as proof of the price…and succeeded.

This prompted a mad rush on the country’s Wal-Marts. The crowd talking about and trying to get this deal kept each other up-to-date on where they had succeeded and failed posting pictures of receipts and store locations as they went, in real-time. Remember, this started with one store who made a special deal to its customers.

This thread has grown to over 59 pages (2300+ posts) as people scramble around all over the country, sometimes visiting 3-4 Wal-Marts and other retailers in an attempt to get this deal price-matched and save $75. Some people just want a deal. Some are looking to resell these which, by my calculations, would net them AT MOST $50 each.(Check for yourself) Many just bought them because…well.. for no reason other than it was a good deal.

I like a good deal as much as anybody but this is just insanity. The unsuspecting managers at these competing stores are getting hammered. In many cases, these deal seekers report having to “convince” (ie. complain vigorously) the managers to even give them the deal in the first place. I suspect many managers just gave them the deal to save themselves headaches. I’m fairly certain that these deal-seekers aren’t being straight forward when attempting to get this price-matched deal (ie. telling them the circumstances under which only this one Target sold the item at that price and why) which, in my opinion, is fraudulent, or, at the very least, dishonest. To top that off, many people are doing this simply to say they succeeded as, more often than not, they are failing. However, just enough people are succeeding to keep people trying.

What compels people to waste so much time in an effort to get a deal on an item they may not even want under circumstances that take advantage of retailers requiring them to be dishonest because one store made a special deal to their customers?

This started on Black Friday and is still going on today.

What are your thoughts?

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