Good article man. I like getting both sides of the story. This seems like a somewhat heated little thread here. 

Jeff
 
"Improve margins"  thats crazy talk. The smart dealerships agree that trucar.com is an issue with the profitability of a dealership.  The next thing that will be coming out will be that Dealerships will offer under invoice prices to consumers if they "dont" go through trucar.com.  I'm sure you all know, that trucar gets paid $300 for every lead that buys a vehicle using trucar website.  This loss, plus below invoice price makes dealerships lose money NOT improve margins.  Many will say that "the dealership will make it up in finance or in service", however most dealerships have these departments as stand alone profit centers within the dealership. In the long run many dealerships sales profitability will suffer if something is not done. A great article in the columbus dispatch in columbus ohio should be read.  It references what Honda thinks about this whole thing.  This might drive traffic, however at what cost.  Informed customers can always get a price below invoice by the good old fashion way.  Private negotiations! 

I appreciate the apology, Joe.

Arnold,

Please let me reach out to you and apologize for my un-professional reply. I was sincerely pursuing details from your blog post because your blog post led me to believe that other vendors had transactional data. This was BIG news to me and I simply wanted to match your list against my vendor list and plug holes. When I didn't get that list my reply was as you said... juvenile.

My apologies to you and the DR community.

You're right Arnold.  I totally missed the "Joe" at the beginning.  Maybe I should start reading these comments on the blog instead of through moderating-optioned emails.

Alex, If you read his comment again, he was addressing the comment to Joe, not to me. Joe is certainly affiliated with DR. He was criticizing how Joe chose to speak to me and his use of the un-professional nicknames he chose for me.

Whoa whoa WHOA there dtg.  Arnold Tijerina is in NO WAY affiliated with DealerRefresh.  In fact, I would go so far to say every single one of the administrators at DealerRefresh have the complete opposite opinion of Arnold on this particular issue.

Joe - "Arnold, you gotta new nick name. Arnold "I guess a lot" Tijerina. You presume to your readers to have inside facts, when "your lack of facts is itself a message"." 
True or False, DealerRefresh has had the lead and technical understanding of this TrueCar / ZAG (past tense) data issue for months. You represent DealerRefresh. Is this the type of post you want to see in the upcoming court transcripts? Note: I am not defending Arnold's posts, he has the right to make his observations without getting bashed. Getting the "list of MANY names of vendors that have dealers transactional data" would likely be better done quietly offline so as not to cause employment or legal issues for one of DealerRefresh's own.Good Selling,dtg

FYI: TrueCar Dealership December Newsletter; Splitting TrueCar Open vs. Member Networks, ZAG name (brand) retired, dealership drawings, and  more... (I apologize if this has already been posted... did not see on quick review) http://dealers.zag.com/id/report/TrueCarUpdate.pdf 

Dealerships are totally screwed up in this way.  The spend thousands on lead but they seem to lose existing customers by poor treatment in sales or service.  They dont seem to understand aquisition costs.  It cost less to keep existing customers than paying for new ones.  They shoot themselves in the foot by hiring people who have no clue about selling cars.  I was at a BMW dealership where the GM hired a massage therapist and then wonders why she doesnt sell any cars.  

AT, I get juvenile when I ask you for details on your blog link, you wrote:

"...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."

This was news to me, so I ask for details,  all I get back is "I don't have time to reply to this".

If you made an assumption that was an error, that's aok,  I make them all the time (including my juvenile replies to you). 

Sorry, you made the bed your lying in.

The horse is dead. I'm done beating it.

Sorry, I was under the impression that you didn't believe that they got data from a lot of sources. They're saying that right there. Oh, dude, I don't get why you fell the need to name call. That's so juvenile.

Dear Anti-Dealer Arnold T, A PR from Zag/TrueCar is RESEARCH?

That PR is HORSE SHIT. 

C'Mon Arnold, read it again.  No where in that PR does it say that TrueCar gets THE PRICE PAID from any source.  

Read it for what it says, not for what you want it to say.

"We get information from dealers and consumer systems; we also buy data from DMS providers. And we’re now seeing it come in from lenders and insurers. It’s also available at state registration tax and title office. Anyone who buys or sells a car leaves a data trail, and understanding this data can be key. This data includes make, model, trim condition, configuration of cars, all down to the ZIP code,” Painter told Auto Remarketing." TrueCar Launches ClearBook 2.0, Signs 3-Year Exclusive Yahoo Autos Deal

Also, what does anyone have now in the way of info on TrueCar and DelerTrack getting in bed together?

I said this over on the forums, but will add it here too! I live in one the, if not the best pro-dealership states in the US, VIRGINIA! Our associations are awesome and work hard with legislators to protect dealers. Why do I say this, here is why. "Bird-dog" fee's are illegal in Va! It is illegal to pay anyone or an company acting as a broker a fee for selling a car in the state of Va that is not lic to sell cars in Va! 

Was at our annual Hampton Roads Auto Dealers Assoc meeting where VADA visits to bring us up to date. There was great discussion about vendors and "bird-dog" fees in Va. It is illegal to pay anyone that is not a lic salesperson in your store in the state of Va a fee for selling a car! Acting as a broker is illegal in Va essentially. Its a $1,000 fine for each case they find, to the dealer! It was said it is starting to be watched more closely and the dealer board is well aware of it! VADA stance - they are anti-broker!Just passing on the info. 

PS im full of typos.
1. "url from youtube"
2. 2nd video music was too loud.

thanks

i read through a few of these comments here, but wanted to watch the 1st video listed there. it is labeled private, however i think if you post the URL or it from yourtube here, i will be able to click and see it. the 1nd video, i couldn't watch because Stephen Tyler and DMC were too loud for me to hear the guy. 

We've always paid for 3rd party "advertising" to sell our cars in almost everything we do to attract customers.... Be it paper, TV, radio, AutoTrader, Edmunds, billboards, mailers, big gorrillas, corporate partnerships, and the list goes on forever - including 3rd party leads... Trust me the newspaper isn't/wasn't there to provide news and our advertising supported that noble cause... It's created to attract viewers/readers so they can sell advertising. No different than a 3rd party site providing "low pricing options" or even "unbiased reviews" in order to attract visitors in order to get dealers to "advertise" by buying the subsequent leads.... Pure Capitalism at its best!

Do we need to fix processes? Yep, automotive is notoriously sloppy there... THAT is how you earn business - because in today's world consumers don't have to put up with only their local dealer and however poorly he wants to treat them. Trust me - 3rd parties aren't killing the profit, it's how poorly we treat our customer via email, phone, and when they show up...

And I'm not a 3rd party marketing vendor - but I have run a few pretty decent eCommerce operations in my days.

I've been scouring the web looking for the site where, in the interest of transparency and "pricing symmetry," Scott Painter has posted the bottom-line best rate that some dealers have actually paid for a TrueCar lead. To be truly informed and build trust in the TrueCar brand, dealers need to know if any other dealers are paying less than TrueCars' MSRP. Is it possible that only a "true yutz" would pay the $300 - $400 asking price for a TrueCar lead? I'm just saying.

TrueCar claims they want transparency.  What they "truly" want is market dominance for their own profit.  They want to leach themselves onto every new vehicle transaction.  They want to become a drain on the already razor tight margins that dealers have.  Shut them out of your business Mr. Dealer.  Because if they are not stopped now, they may not be able to be stopped later.  They are well funded.  This is simple, do not pay for deals that you are missing by not having good people and process.  Generate your own leads through solid online advertising and make sure you convert them!  It's simple, though not easy.

I just read a press release by Scott Painter the CEO of Truecar.com which I pasted below, according to him a customer that pays a dealer a good profit is a True Yuzt.  I have been watching this thing unfold over the last week with Ziegler and Thibeau and was pretty much indifferent until I read Painter’s article.  It is this guys goal to have his TrueCar price posted next to every new car MSRP, and from what I have read, that is well below invoice. 
 
I think at this point we need to really asses the situation and decide if we a need a low life piece of crap like Scott Painter associated with our business, there is no profit in his business model for the dealer and from what Thibeau was pointing out their customers are having problems, which of course will come back to bite the dealers in the ass.

What would happen if every dealer took this threat seriously, banned the companies taking this information from thier DMS, and cut thier ties with Truecar.com and ZAG, how long can this Snake survive without cash flow?
 
See if you can read this excerpt from his article and feel positive about his product from a dealers point of view, (Arnold is excluded since his values no longer align with the dealers best interest.)

“The automotive market has not behaved based on supply and demand,”  Painter told Wired.com, mostly because of information asymmetry. One example of market failure are the useless values of Manufacturer’s Suggested Retail Price (MSRP) and invoice. While they’re supposedly benchmarks of what consumers should pay, those numbers are “irrelevant” in today’s market, Painter said, because “almost all cars are selling under MSRP and invoice.”

According to Painter, that asymmetry of information means that consumers are inherently wary of dealers, even though the average dealer only makes $640 in front-end gross on each car sold. TrueCar research shows that the average consumer would negotiate a dealer profit that is 300 to 400 percent higher if only they knew how much the dealer was really making.

Painter says a TrueCar report is an unbiased source of information — much like Zillow or Consumer Reports — that consumers and dealers can use as a negotiating tool. A buyer who walks into a dealership with a TrueCar report, according to Painter, is ready to buy. “The dealer should embrace the fact they’re educated and not take advantage of them,” he told Wired.com.

Right now, a look at the TrueCar website shows that there are a lot of uneducated buyers out there. Glancing at a report for the Chevrolet Suburban, the TrueCar price report shows that one wheeler-dealer snagged a deal at $36,548, while a true yutz managed to pay just over $41,000 for the same identically-equipped SUV. Painter said TrueCar could eliminate those pricing disparities “almost immediately.”

In order to build trust inthe TrueCar brand, Painter is careful to distance himself from manufacturers or dealers. He envisions a world where dealers print a TrueCar window sticker alongside their own information, and where the process of purchasing an automobile treats a car like a commodity. “We’re transforming the market,” Painter said. Those dealers “not willing to give an upfront price are going to go out of business.”

Mark, I agree that every dealer needs to require adherence to consistent training, sales, CRM and follow-up processes. Those that don't are losing market share and it's only a matter of time before they close their doors or sell out to a more astute dealer.

However, having good processes alone doesn't bring people to your door nor is having those processes in place a reason to not advertise where a significant number of in-market car shoppers are. There is a big difference between BUYING leads (here's a person, go get um) and ADVERTISING your dealership and inventory on 3rd party classified sites (here we are, here is our inventory, you wouldn't be searching on here if you weren't already somewhere in the buying process, come see us if/when you're ready).

Perhaps a more measured analytical approach to figuring out what drives your traffic would be better than a fire-them-all philosophy? Do you consider the company from whom you buy those balloons and that inflatable purple gorilla to be "Third Basemen" too?

Do you not see the real problem here? As Dealers we have become weak and complacent, we write checks to third party vendors in the hopes of selling more cars.  The call to action here is to take back our dealerships.  Stop relying on Autotrader, Tru Car, Zagg and others to get customers for you to talk to. That's all they do, here is a person go get 'um. Let's fire all of them and improve our own process. How many dealerships struggle with their sales force to use the CRM? Change your policy to "If it didn't happen in the CRM it didn't happen". Hold people accountable. Train appointment making on the phone, asking for referral's, building a long term relationship, and the list goes on and on.

If we spent all of the money on "process" instead of lead generation we would sell more cars and we would grow our market. Do any of your doubt this?How many dealerships have a written sales process that covers every step your salespeople need to make? How many hold there salespeople accountable to the process. What about managers, do they have a process? are they held accountable?

FIRE THEM ALL!!!! All of these vendors are "Third Baseman" We hate it when a customer comes in to the dealership and we have to deal with a third baseman. These vendors are the internet version of a third baseman. And the sad thing is we PAID them to be that. 

Take back your dealership and stop being held hostage by these third base vendors.  Send a clear message that "We are fed up and we are not going to take it any more" and throw them out of the dealership.