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The Game-Changing Google Program Auto Dealers Can’t Afford to Ignore

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Google’s online ventures are usually anything but under the radar. Yet recently, in what may be a game-changing play, the search engine giant quietly entered the third-party lead provider business for car dealerships.

The beta version of Google Comparison Ads for Autos (which is unofficially being referred to as “Google Cars” within the industry) was launched to very little fanfare a few weeks ago in the San Francisco Bay area. The service invites participating dealers to send their inventory to Google, allowing consumers direct access to inventory, price comparison, and the ability to request quotes from within Google search results. As shown below, the program—and associated inventory—is prominently displayed on page one of a relevant search.

While the program is currently limited to dealers within the San Francisco Bay area, program-specific search results are available throughout the state of California, not just for people located within the Bay area—contrary to what others are reporting. As evidenced by the above screen-grab, I did not have to change my location to get Comparison Ad results, and I live almost 500 miles away, in Southern California.

Google is currently testing a number of similar Comparison Ads programs for other products, including credit cards, CDs, and checking and savings accounts. Results have been controversial, with many advertisers in these industries reporting dissatisfaction, especially since Google is not obligated to play by its own rules and is, in effect, competing with its own advertisers. In November 2011, Google temporarily suspended its Comparison Ads service to the mortgage industry with plans to reboot the program after revamping it.

While specifics of the program for auto dealers have yet to be announced, Google is promoting the new service with the following program highlights:

“Higher-quality leads: Our leads come directly from motivated, purchase-ready consumers who have specifically chosen to contact your dealership. Leads are unique, never resold, and delivered immediately to you.

Free inventory listings: You can have your inventory shown to consumers on Google for free, even if you decide not to receive leads.

More than just inventory: Consumers can choose to connect with you even when you don’t have a specific car in inventory. We know that you can order the car, dealer trade, or find other solutions to help consumers get the cars they want.

Greater control over leads: You choose how much you’re willing to pay for a lead and target consumers based on distance and specific type of car, so you get the leads that are most valuable to you.”

This is all the information that Google currently has publicly available about the program. However, the operational processes used in the suspended Comparison Ads program for mortgages may offer additional insights. Here’s a run-down of how the program functioned:

1. Google looked at maximum bids placed by each competing bidder and then set a reserve price based on those bids. Once set, the reserve price was the minimum fee bidders would have to pay to appear on a desired search results page.

2. Anyone bidding below the reserve price was dropped from the auction. Google also dropped the bottom 10% of bidders who bid at or above the reserve price.

3. Results were then displayed (in this industry’s case) from lowest to highest APR. This leads me to believe automotive results would be displayed with the lowest prices first.

Furthermore, this is how, in an unlisted video, Google described the highlights of the program to the mortgage industry:

• The ads were included in the “Sponsored Listing” section but are not counted in the AdWords auction.

• Pricing was pulled directly from the companies’ “pricing engine product feed,” which would presumably be the equivalent of a dealer’s DMS or pricing tool, and updated multiple times per day.

• Bids could be highly targeted to reach the consumers most likely to convert, and an advertiser could place different bids for each targeted criteria.

Google mentions that they are working on a different ranking system for the mortgage program (one of the reasons provided for its suspension) in which Google will reward high-quality advertisers using factors such as:

• Accuracy of offers as determined by mystery shopping

• Turnaround time on lead follow-up

• Customer satisfaction as measured by surveys

It is probably safe to assume that Google will eventually apply these ranking criteria across all industries serviced by their Google Comparison Ad program.

Google is promoting the Comparison Ads for Autos program as a way for dealers to source fresh leads from consumers’ Google searches, but given the above information I have several concerns regarding how beneficial the program will really prove to be.

First and foremost, Google claims that the leads generated by the program are “unique,” yet in the final step of a lead submission, the program offers the consumer the choice to contact other dealers who may have similar cars available. A single person inputting a lead and requesting contact by multiple dealers would hypothetically generate multiple leads, a complication Google does not currently address.

On a related note, Google is telling consumers that even if they are interested in a particular vehicle that has already been identified by VIN, they may be able to get the same vehicle from another dealer. As Google puts it, “if you see a particular car (specified by a unique VIN) showing in a dealer’s inventory, you may be able to get that car from other dealers as well. Dealers often times trade inventory with each other, so you can buy from the dealer that you prefer.” Thus, Google is negating the edge a dealer may have in winning the consumer’s business simply by having the exact vehicle they are looking for in stock.

In addition, while Google says that dealers can list their inventory on the program free of charge, it is unclear what would happen to any leads generated if the dealer chose not to “pay to play.”

For those who are willing to pay, Google allows dealers to “[choose] what [they’re] willing to pay for a lead.” According to Automotive News, the price-per-lead is determined via a bidding model, with dealers competing for prominent positioning within search results for their inventory.

The final component of the program is that Google emphasizes the protection of consumer privacy. There are three ways in which a consumer can contact you as a participating advertiser:

1. Inbound Phone Lead: This comes via a Google-generated phone number; the consumer’s phone is blocked from the advertiser’s phone system.

2. E-mail Inquiry: The advertiser is given the consumer’s name and the details of the product they are interested in, but the consumer’s e-mail address is masked.

3. Request a Call-Back: The advertiser is given a masked phone number with which to call the consumer.

Google states that lead delivery is compatible with CRMs, but how those leads would actually populate is unclear.

The fact that Google commands such a large percentage of internet searches means that this program is a potential game-changer. Google’s ability to position this program wherever it likes, regardless of its other ad programs, may mean that dealers are forced to participate to remain competitive. Because Comparison Ads currently appear just above the first organic search results, these results will likely divert a portion of traffic that would otherwise have gone directly to dealers’ websites.

Not only will Google’s Comparison Ads for Autos impact many components of your online marketing efforts, including search engine optimization strategy and pay-per-click campaigns, but it may also even affect the lead quantity that your current third-party lead providers are able to offer you. Obviously, dealers would be well-advised to pay close attention to the program as it develops.

via the July 2012 edition of the 3 Birds Marketing newsletter

Ford Says Consumer Privacy Is Impractical

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In a Yahoo! exclusive article published today, it was reported that Ford has initiated a lawsuit against 13 individual eBay sellers who they accuse of selling fake or counterfeit Ford parts. I’m not arguing the merits of Ford’s lawsuit as it is certainly within their rights to protect their trademarks and copyrights as well as take steps to protect dealer’s profits in the part business but rather to question the bigger issue encompassed by this: an individual’s right to privacy.

The subpoenas for the  lawsuits were granted by the court for Ford to obtain the seller’s identities and information. What is unusual about this is not that they requested it, but what they asked for after that request was granted.

As reported in the article, most ISPs and websites have policies in place that notify users when the company gives out their information for any reason except for that involving criminal activity and which is requested by law enforcement agencies.

In this case, Ford not only requested the user’s information but also asked for their bank account information (which was denied) then went a step further and asked for the court to prohibit eBay and Paypal (an eBay company) from notifying the targeted users that their information was requested and given out.

This move flies in the face of all privacy issues. With the public outcry against the recent legislation effectively designed to skirt privacy issues accompanied by Ford’s strong pro-consumer brand and social media presence, you’d think they would want to steer clear of any controversy in regards to consumer privacy.

“Much of the debate in recent months over online privacy has been spurred by bills in Congress, such as the Stop Online Piracy Act and a new bill, the Cyber Intelligence Sharing and Protection Act, which passed the U.S. House in April. CISPA would let companies and law enforcement agencies broadly share users’ personal information to fight potential threats — including accusations of copyright violations and counterfeit goods — without penalty, trumping any company policy.” writes Justin Hyde in the Yahoo! article.

The reason reported by Ford for this request was:

“Ford respectfully suggests this procedure is impractical and would serve to undermine the rationale for the subpoenas. The procedure would impose a substantial burden on [eBay and PayPal] to prepare, serve and enforce subpoenas and would serve to “tip-off” or warn the Doe defendants of Ford’s investigation. Under the procedure as written, the Does would have notice that Ford was seeking their identities and thus ample time to destroy evidence, the counterfeit and infringing goods, and flee to avoid service all before Ford would be entitled to receive their true identities.”

I understand why they asked the court to do this but just because it’s a good reason doesn’t mean it should outweigh the right to privacy that all citizens enjoy. This is a civil matter, not a criminal one.

Now that one court has issued what I feel is an invasion of privacy, what’s to stop other judges from following suit. I can think of plenty of GOOD reasons for a judge to do this but that doesn’t mean they SHOULD. Where does an ISP or website draw a “line in the sand”? Despite Facebook’s own internal privacy issues, they have, and are still, fighting other companies from requiring or being allowed to access their user’s information and accounts including employer’s requesting pre-employment access, schools requiring students to reveal their Facebook walls to administrators and more.

Being an eBay user for over 14 years and a Paypal user for about 12, I would hope that they would challenge and fight for their user’s right to privacy. It’ll be interesting to see how this plays out and whether any of the companies involved will take a stand for their users.

While Ford may feel that their lawsuit against 13 people succeeding is more important than our rights to privacy, I just find that.. well.. impractical.

Facebooks Potential New Feature Could Kill Your Newsfeed

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Facebook has always been experimenting with ways to generate revenue. It’s mostly been focused on businesses through Facebook Ads and Sponsored Stories but now it’s contemplating a revenue stream generated through users.

TechCrunch reported last night that Facebook has began testing a feature it calls “Highlight”. The basic functionality of this feature is that a user can pay a one-time fee to have a single post shared with more of their friends. Facebook’s algorithm is designed to identify and deliver what they believe is the content most interesting to any individual. According to the TechCrunch article, only about 12% of any given person’s friends see any given post. (People that utilize EdgeRank to maximize the potential that their posts are seen probably have a slightly higher average.)

facebook-highlight-status-updates1

In my opinion, there are only a few legitimate uses for for this feature by an individual that wouldn’t annoy the heck out of their friends: “I’m moving”, “having a baby”, “someone died”, “help me raise money for a good cause” etc. would all be legitimate reasons, in my eyes. However, I don’t see too many people actually paying for increased exposure to other legitimate types of status updates even if it were available. (“Legitimate” in my eyes being a valid, non-spammy type of status update.)

More than likely, the people willing to pay for increased exposure for their posts would be people selling something.. whether that’s recruiting for a multi-level marketing “opportunity”, advertising their business or services, and, in the case of the automotive industry, delivering the many different ways of saying “come buy a car from me (or my dealership)”.

With many car dealers still stubbornly clinging to Facebook profiles versus Facebook pages, I think it’s just going to be way too tempting for them to pay the small fee to make sure more of their “friends” see their sale ad, highlighted vehicle, or “come buy a car” message. It will also be tempting for individual vendors to ply their wares on your Facebook newsfeed paying a couple of bucks for increased exposure to all the car dealerships they’ve friended.

The potential for people to newsfeed spam is way too high, in my opinion. I put up with an “occasional” plug from my Facebook friends. I mean, everyone needs to earn a living and rule #1 in sales is to make sure everyone you know is aware of what you sell. There’s nothing more frustrating than being a Toyota salesperson and having someone you know buy a Toyota from somewhere (or someone) else. That being said, I do have a line that a person can cross when the volume of those types of posts by them gets annoying to me.

I’ve never been a huge fan of Facebook choosing who they think I want to see posts from. I would personally like to be able to control that option but, for the most part, it accomplishes its goal. I also think I’m probably in the group of people that actually tells Facebook who and what I want to see by hiding people, creating lists, knowing (and using) my privacy settings, etc. as the more you do this, the more accurate Facebook’s algorithm can be in delivering relevant content. It’s unclear whether “Highlight” would circumvent these settings (ie. delivering messages from people I’ve hidden or normally wouldn’t see status updates from just because they’ve paid for that increased exposure).

Bottom line is that if your newsfeed becomes littered with individual advertising-type posts rather than being filled with relevant content from people you want to interact with, people will either start hiding or unfriending more people or they’ll use Facebook less.

According to TechCrunch, the feature is currently being tested in New Zealand.

Amazon Now Competing With Dealers

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Amazon.com announced the launch today of a new store AmazonSupply.com

The site, as reported by Mashable, is “aimed at buyers in the business, industrial, scientific and commercial spaces”, however, anyone can order from the site.

Being that I buy pretty much everything from Amazon (including my daughter’s loft bed and, most recently, a refrigerator), I was curious as to what this was all about.

To my surprise, they are offering a wide variety of auto parts, car care items and even wheels and tires. (See the Fleet & Vehicle Maintenance category).

As you can see, they have quite a large inventory of items. Unlike Amazon’s Marketplace, it’s unclear whether these items are being sold by Amazon directly or through third-party sellers.

amazon

How, or will, this effect your parts business?

Amazon has typically made sure they are the lowest price in any market. With free 2-day shipping on orders over $50 and no sales tax (in most cases), I’d say they have a distinct advantage from the get-go.

How long before they try their hand at selling cars or listing dealer inventory (at a cost, I’m sure). Amazon is increasingly trying to be a consumer’s one stop shop for everything. I’ve bought everything and anything imaginable on Amazon and have yet to find something NOT on Amazon.

Consumers may always need someone to install and service the vehicles but it just became a little easier and more attractive for them to not spend money in your parts department.

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?

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!

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. 

Award-Winning Houston Area Auto Dealer Passes Away

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(Originally published on Dealer magazine)



Jack Elfman, Dealer Principal of River Oaks Chrysler Jeep Dodge, Helfman Dodge Chrysler Jeep, Helfman Ford and the soon-to-open Helfman Fiat passed away Saturday, May 28 due to heart problems. Mr. Elfman was a well-respected member of the automotive community having won many awards including the 2004 Time Magazine Quality Award. He was an active member of his community involving himself and his dealerships in many community service projects and was well liked by his employees. Jack was 78. You can read about him here.

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