There has been a lot of buzz surrounding what could possibly be dubbed “The Cars.com Debacle of 2013.” I know, understatement of the year, right? In usual dealer advocate fashion, Jim Ziegler has brought to light a shockingly bad business practice recently instituted by the automotive marketing juggernaut, a practice that could have profound negative effects on all cars.com customers. On the other side of the debate is Brian Pasch, advocating that all should be forgiven because of all the good done for dealers by the cars.com business model. This is quickly developing into a modern day saga of The Good, The Bad and The Ugly (For the sake of this example, we’ll just call cars.com the ugly! After all, they don’t have feelings, right?) But who is in right? Could the answer be none of them?
The Ziegler camp is charged, and the passion exhibited by the Ziegler camp is being misconstrued as an angry mob fueled by emotion and not based on fact. Meanwhile, the Pasch camp is being called a bunch of sell-outs, twisting data to pull the wool over the dealer’s eyes. Dealers are getting in the mix as well in a “tastes great, less filling” taunt. It’s a melee that could rival the TrueCar firestorm that wreaked havoc on the industry last year.
-When a consumer submits a lead on a cars.com dealer client’s vehicle, cars.com has (without notice) taken it upon themselves to automatically send e-mails to the consumer after 3, 5 and 8 days. These e-mails typically offer vehicle alternatives from competing local dealers to the consumers.
-These emails typically contain inventory that is specifically listed at a lower price than the original vehicle of interest.
-This practice is not in the dealer’s best interest and is a violation of trust for a paying customer.
-The lead and customer information belongs to the paying customer (the dealer) and not to cars.com.
-There exists a high probability that the introduction of this material could derail an active negotiation, create distrust and confusion in the consumer’s mind, and reduce or eliminate any chance for dealer profitability.
Cars.com / Brian Pasch Argument:
Some of this information is not entirely straightforward and requires a bit of speculation, although it’s being cited as “data” and thus fact. First the cars.com info which is based on their data:
-Prior to this campaign, 58% of cars shoppers who submitted a lead returned to the cars.com website.
-Cars takes this to mean that shoppers are still engaged in the decision making process.
-They believe this gives them the right to step in and proactively provide the consumer more data in the interest of providing a “better shopping experience.”
The full Q & A can be found here.
-Brian uses data from a study done with AutoTrader and somehow concludes that it validates that cars.com’s move is ok because cars.com probably provides a low or even the lowest cost for a VDP view…?
The “facts” he uses to substantiate his argument can be found in the video below.
Here is the summary:
From 4:10-4:52 the “facts” Brian uses are generalities about other digital marketing aspects:
-Some dealers still don’t show price on their website in spite of research that shows they sell more cars when they show price.
-Some dealers don’t believe in Chat services. Anecdotally, Brian asserts that “Often dealers who use chat claim that it is their top lead source.”
He states that he “believes” that this new strategy is a change that dealers need to accept, akin to pricing inventory and using a chat service. Understand that these are the “facts” he is stating for the argument. This is “data.”
At 6:42 Brian goes on to cite a recent study he did with AutoTrader which shows that 34% of visits to his clients’ websites were first on AutoTrader and KBB. What the heck does that mean? Was 1% from AutoTrader and 33% from KBB? The reverse? Something in the middle? What’s the value of that “data?” He goes on to say that a Cobalt study showed that dealers who got more “VIN” views on their website sold their cars faster.
Um… Duh? What does this have to do with Cars.com sending a dealer’s inventory to a competitor other than helping the competitor get more vin views that another dealer paid for?
He goes on again to mention correlation to views and sales. That dealers need to become “VDP factories.” But again, no mention of specifically how cars.com taking the paid advertised inventory of one dealer and then subverting the process by introducing a competitor into the mix benefits the first paying dealer.
Mr. Pasch then goes on to claim that the cost to generate a VDP view is the lowest among AutoTrader and Cars.com and, though he doesn’t actually say it, I guess this should make it ok for cars.com to take money from one dealer and use it to advertise another dealer in the middle of a potential sales negotiation? No real clarity I can discern.
Next, he lists the general value proposition of cars.com in the form of the features of the website. One thing is for sure, Mr. Pasch is a great salesman. It’s a better pitch than I’ve ever heard from an actual cars.com rep.
Personally, I do not believe there has ever been a statement by a CEO of a technology company serving car dealers that more clearly illustrates his naiveté
Then he mentions that he simply “doesn’t buy” that a consumer sends in a lead, is working with a dealer and then cars.com sends an email that blows up the deal.
That final comment at 11:38 is a massive dagger. Personally, I do not believe there has ever been a statement by a CEO of a technology company serving car dealers that more clearly illustrates his naiveté, or could prove more definitively that this man has never worked a day in his life inside an automotive retail establishment, and clearly has no real world understanding whatsoever of what it is like to work a deal and how even the smallest detail can derail the sales process.
Brian then attempts to ask a “gotcha” question at 13:54, but if you think about it, his conclusion could not be further from the truth. He asks, “What does it do to the consumer if they submit a lead at cars.com and no one responds? What happens if that process is repeated? Will consumers continue to go to cars.com and submit leads? I think you could answer that pretty quickly… Not sure?”
Well the answer doesn’t require a guess! It is unequivocally yes! Think about it, is the process in dealerships today better than it was a year ago? 3 years ago? 5 years ago? Were more or fewer leads being responded to years ago vs today? Look, I’m not suggesting for a second that dealers as a whole have process down across the board or even at all to any great degree. There is no question that the industry as a whole evolves slowly. But to use Brian’s own “facts” in response, I would say that all of the issues he raises when he critiques what happens inside the dealerships are lesser today than in the past. Would anyone honestly disagree with that?
If that is true, then one must ask, is Brian suggesting that AutoTrader and Cars.com have seen a decline in traffic and consumer activity over the last 1, 2, 3, 4 or more years? Because I guarantee more consumers got no response 1, 2, 3 or more years ago than they do now!
He goes on to criticize dealer process and failure again. I can only suppose that Brian’s real argument is that dealers are incompetent and can’t manage their own customer so they need mommy (autotrader) and daddy (cars.com) to come in and take care of them, because they know better.
This sort of “socialist” viewpoint is becoming more and more popular in today’s world paradigm, but I contend that giving up your rights to some “entity” claiming to know better than you is contrary to capitalism and frankly, the american system of values.
I know I’ve been pretty tough on Brian here and I am (like Brian) passionate about my views. Brian has been a great mentor for me and it almost makes me sad to see him so lost on what is best for dealers on this argument (my opinion of course). Before the Brian camp jumps all over me and starts the name calling game to stick up for “their guy,” know that I have always considered Brian a dear friend and an indispensable resource to the industry. I’m sure he believes he’s leading dealers down the right path. He’s just dead wrong.
And yes, it’s fun to stir the pot and get the troops fired up and call for justice, but no dealer should seriously consider canceling cars.com long term unless they don’t significantly modify or eliminate this new campaign. Jim says eliminate, and maybe he’s right, but…
What about making this a win-win?
A lot of mention of “data” has been thrown around in this debate, but very little has been produced by either side or even cars.com. The debate smacks more of politics and spin than a fact based discussion. Much speculation leads to the conclusions on both sides, but data could be the solution.
My idea allows both sides to come away feeling good about a campaign like this: Opt in and use data.
Opt in is straightforward enough, the use of data could ensure preventing the possibility of “blowing up a deal.” Dealers give tremendous amount of access to their data to their vendors. My suggestion would be to give cars a little more. If a dealer opts in for the program, there could be some additional benefit or package that cars.com trades for the opt in. This way the dealer receives a clearly defined benefit.
Next, the dealer would provide access to the dealer’s crm tool and dms. When the dealer sends the first response to the consumer the clock for follow up e-mails from cars.com resets. If the consumer responds to the email, the dealer gets the option to “kill the clock” due to a working deal. If a sale does not happen within 36 hours, the clock resets. If there is more communication from the customer, the clock continues to reset until communication stops or the vehicle is sold.
If the consumer never responds, there is at least data supporting that the presumption cars.com is operating on is substantiated. If there is active communication, or a dealer has the option to “kill the clock” temporarily under the premise of a working deal, the risk of polluting the deal with new information is eliminated.
It’s not a perfect system. Some will argue that dealers will cheat and use kill the clock inappropriately, and surely a minority of dealers will likely abuse the feature, but the opt in nature would eliminate the majority of dealers inclined to cheat the system in the first place. Because the program is new, despite cars.com’s claims of whatever limited preliminary data they have, there is no guarantee this will work the same way in all markets. If cars.com wants dealer support they’ll need to offer a significant carrot to get early adopters. Cars will need the support of these early adopters to collect more significant data and possibly learn of vulnerabilities in the campaign that could negatively affect dealers in certain markets.
In closing, this win-win does make one big assumption: that cars.com is right…that this isn’t merely a ploy to simply address a self serving need that doesn’t ultimately benefit any paid advertiser. If there is real data to support that this campaign is beneficial for the dealer, and they need to do real world R&D as they say, then do the right thing. Ask for permission. Offer something in return for participation, then build a large scale case study and get consent.
Yep. That’s a lot harder than just giving the finger to your customers and forcing them to do something that could arguably hurt their business. TrueCar found out what happens when you condescend and tell the dealers whats best for them. I suspect cars will too if they don’t get out in front of this with more than a “trust us it will be ok.” A lot of people may forget, but AutoTrader had a massive abandonment a few years ago too… They drastically changed their tactics as a result of some nutty blogger who suggested enough was enough.
Do the right thing, cars. Remember what they say about good intentions and the road they pave…