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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.

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.

Dirty Rotten Scoundrels

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Most consumers hate shopping for cars. They love to BUY cars. They WANT new cars. It’s just like shopping at the mall, just way more expensive, which is why they should enjoy it much more. If you were to go into any retail store and tell them you wanted to spend $20,000+, they would treat you like royalty, yet, when people go into car dealerships, all they get are headaches and wasted time. Many dealers are recognizing this and consciously making changes to their processes that streamline the buying experience and make it easier, and more enjoyable, for people to buy cars but, sadly, many dealers are still playing games.

Has something like this happened to you at a dealership or have you seen this happen at your dealership?

Until dealers can break through the stereotype they earned, consumers will distrust them. That’s why it’s such a refreshing experience to consumers when they find a dealership that doesn’t play games. Until they experience it personally, however, they won’t believe you no matter how hard you try and convince them that your dealership is different. Treat every customer like royalty and you’ll be well on your way to referrals and word-of-mouth marketing that you could never buy.

(P.S. This video was from a series of videos shot by DealerKnows Consulting. It was an honor (and a lot of fun) to be included in these. There are more to come and, in case you missed the first one released, I’ve included it below.)

Inflatable Gorillas vs. Social Media

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The question I hear asked the most by dealers when talking to them about social media is “What’s the ROI? How do I measure that?” The problem with getting a buy-in from them is that they want to see a straight line between a Facebook post or tweet and a sale. Sometimes that’s possible but most of the time, it isn’t.

gorilla

My rebuttal is, “What’s the ROI on the inflatable gorilla on the roof? How do you measure that? Do you have a source in your CRM for “Gorilla” similar to the infamous “Billboard” one you have?”

Inevitably, they can’t answer that question. Funny thing is that even Google got into the “gorilla” game when they posted an ad for PPC advertising stating that Google Adwords would have “tons of customers headed your way” and implying that the gorilla would not (which they were promptly sued for by the makers of inflatable gorillas).

googlegorilla

The most common thought is that the giant inflatable gorilla gets people’s attention (just like the weekend tradition of “ballooning” the cars. Nobody that I ever know of said that they stopped at a dealership and bought a car because they saw a gorilla on the roof. In fact, it’s quite the opposite. I’ve seen many comments by consumers that say inflatable gorillas are insulting to them. Some have even said that they are an indicator of an “old-school” dealership and would avoid these dealers at all cost.

Social media, on the other hand, when done properly, can increase customer loyalty, satisfaction and referrals through engagement with your customers. There are TONS of examples of this result from HUGE companies (Ford, Southwest Airlines, etc.). I’ve NEVER heard a customer say those things about a dealership using social media (with the exception of dealers that spam their customers with inventory).

Let’s assume that you can’t track ROI on social media (which is incorrect) and that you can’t track it on an inflatable gorilla, which end of the spectrum would you rather be on?

There’s only one way I could see an inflatable gorilla actually working and that’s if it can do this:

….jump off the roof and physically drag customers in.

So, if you’re willing to put an inflatable gorilla on your roof, balloon-up your lot every weekend, have a “hot-dog food fest” or any of the other things that surely have people (presumably) slamming on their brakes on the freeway to come to your dealership and buy a car, then why wouldn’t you have a presence on social media whether you can measure it’s ROI or not?

What do you think of giant inflatable gorillas on car dealerships?

Buy Here ‘Cause They Suck

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Most dealerships and businesses in general know that it’s bad practice to bad-mouth your competition. That being said, I know of and have heard plenty of salespeople and managers using their online reviews to help close a deal by comparing them to their competitors online reviews. This practice is similar if not exactly the same. You are leveraging negative comments about your competitor left by other people (who you are representing as real – we all know fake reviews exist) to your positive reviews (you aren’t really showing people any negative reviews about your dealership, are you?) in an effort to “sell” yourself and your dealership. So, while this isn’t talking bad about your competitor directly, it is indirectly, and what you say can now get you in some deep water.

In a precendent setting ruling, an Alabama car dealership has been awarded $7.5 million dollars due to slanderous comments made during a close to consumers by both the salesperson and sales manager. Apparentley, the dealership’s competitor was owned by an Iranian-born but naturalized U.S. citizen. The sales manager told at least one couple while attempting to close a deal that the competitor was “helping fund insurgents there and is also laundering money for them.” The salesperson was also accused of telling the same couple that the dealer was “funneling money back to his family and other terrorists…” and that he has a “brother over there and what you’re doing is helping kill my brother.” It is also reported that the competitor was frequently referred to as “Taliban Toyota”.

The jury awarded the Alabama dealer  $2.5 million in compensatory damages and $5 million in punitive damages after deliberating for 3 hours.

While this is certainly an extreme example, it bears watching where the “line” is. This had more to do with a leveraging of race, stereotypes and bigotry but there’s no telling what future lawsuits outcomes would be utilizing this ruling as precedent.

I find it astonishing that, it appears, the sales manager, at least, is still employed at the dealership based on the statement that neither of them were available for comment per a “dealership spokesman”.

I think there are now 7.5 million reasons to add prohibiting the “bad-mouthing of your competitor” to your employee handbook. 

Consumers Now Have the Ability to Block Your GoogleAds

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Google announced yesterday via its blog, that it had instituted a feature in Google search and GMail ad transparency. This change will give consumers the ability to see why ads are being delivered (ie. what previous searches triggered the ads) as well as the ability to block ads from a particular company/advertiser. This option is available for all Google Ads delivered to a consumer.

Is it a cause for concern? Probably not as I believe a low percentage of people will actually utilize this feature, but it is certainly something you need to be aware of. I would equate this to “hiding” a company from your News Feed on Facebook, in a sense.

Below is an example of what a consumer would see should they choose to go into the “Ads Preferences Manager”.

Do you think this will have any impact on your ability to target consumers or is this a non-factor?

Contact Me