Thursday, December 15, 2011

Scott Painter (CEO of TrueCar) speaks to Stan Sher (President of Dealer eTraining)

It was Monday December 12, 2011 and I had decided to take a nap at 4:00 PM as I had just spent an average of 14 hours per day working from my home office.  I actually spent all weekend working on projects and creating more curriculums.

My nap was rather long and I slept until 8:00 PM.  I woke up and looked at my cell phone only to find a voice message from a random phone number in California.  I listened to the message and saw that it was one of Scott Painter's people trying to contact me because Scott Painter wanted to have a conversation with me. 


My initial thought was, "WOW, the multi billionaire guru with a Wikipedia page wants to talk to me.  I feel special."


I called the gentleman back and set the call up.  I later learned that he was also speaking to Jim Ziegler.  As far as I knew we were the only two people that Scott Painter was talking to.  I had prepared my list of questions and was excited to talk to this person just to see what he has to say.


Fast forward to the next day.  I started to think a few things.  I was thinking that maybe I made Painter so angry that he was trying to get his attorney on the phone with a cease and desist message.  On the other hand, I do think great things of myself and I know that I am a very abstract thinker so I was thinking that maybe Painter would be looking for my help to make his product better and stop hurting dealers.  I had spoken to Jim Ziegler and knew that he had a call at 1:30 PM so I was anxious to find out what happened.  So at 5:30 PM (30 minutes before my call I called Jim again).  I learned from Jim that it was a regular Q&A session and that he was offered a trip to California to explore the TrueCar operations.  Jim had spoken well of Scott Painter as he Scott was very professional and seemed to be an easy going person to talk to.


Moving on...


It is now 6:00 PM and we get on the call.  It was a 55 minute call.  We started the call and Scott had informed me that he might have to get off sooner because his wife was about to have a baby any minute now.  "Congratulations Scott and family!”  I had congratulated Scott.  I also started the conversation by giving him my respect.  I too am a college dropout and I too have visions of doing huge things in the future.  I started the conversation with an upfront from the heart compliment.  Anyone that knows me knows that I have a huge heart.  If I am against what you represent it I will let you know that too.  However, if you are brilliant enough to come up with a huge idea and get to the level that Scott has I have to give credit to where it is due.


I continued to explain who I was and what my background was.  I had explained to him how I got in to the automotive industry and my experience in retail.  In addition, I talked about my roles in dealerships and how I started Dealer eTraining.  From there I moved onto explaining to him why I am completely against his product (TrueCar) and I gave him at least three real scenarios from when I worked in dealerships as a sales person and a manager.


He understood where I was coming from.  Scott was also very professional and knowledgeable with his answers.  He seemed to give me legitimate responses.  I told him about my theory of how I believe he is pricing cars out of the market and how he is hurting the business.  I even compared him to Edmunds where I said, "at least when Edmunds is advertising True Market Value (TMV), the vehicle is priced a few hundred over invoice".  I added to that by saying, "if we were selling cars a few hundred over invoice and you had your pricing fairly structured like that no one would be hurt."


When asking him about where pricing data comes in he started to tell me about how when a car gets sold the data is available to multiple sources and how many of them are partners are TrueCar.  When I asked him where he gets these ridiculous low prices to put on the bell curve under "Best Deal" he told that consumers actually provide them with pdf files of their purchase.  This is where I am still puzzled after everything he said to me.  Something here did not seem to sound right.  Why would a consumer give you a copy of their retail agreement?  It is one thing when you survey the customer and they tell you what they paid for the car (which cannot be a fact sometimes).  It is another to have someone takes the time to send you this information.  I had not asked more questions on this because this was the one thing that made me actually want to go and see the TrueCar operations for myself.  


The majority of the discussion was exactly like the one that Jerry Thibeau had with Scott.  The only difference is that I literally have 30 ideas that can turnaround TrueCar for the better if in fact this beast cannot be defeated.  I had mentioned two ideas right off the bat.  Here they are:


1. Ok if you are going to advertise on the bell curve, "Best Deal".  Can you at least have the decency to omit the sales prices from customers that stole the vehicle?  I mean there comes a moment when a sales manager makes a mistake and we roll a car and lose $2,000 on it and the customer makes out like a lucky bandit.  This is where I assume these figures are coming from.  So I said, "I know Honda does not allow advertising under invoice so why not keep the sales figure legitimate and have some profit in it to keep all things fair".  


-Scott told me that his AutoNation people have brought a similar idea to them.


2. I had mentioned that if they incorporated reviews and partnered up with a review site.  Take the reviews and incorporate them underneath the prices in the bell curve that they can now offer a lot more than just pricing.  I am talking about value added benefits.  Now the customer has a choice if they want to pay more for a better experience or pay less for a worse experience.  Now that is real transparency in my opinion.


-Scott told me that his brother in law is a GM of a Mazda dealer and he was mentioning something similar.


What are my thoughts?  


My thoughts are that Scott has opened up as much as he is willing to open up.  I still disagree with what is being done with TrueCar and why TrueCar is partnered with some of the current partners.  I also believe that there are a lot of ways that the TrueCar model needs to be reworked.  TrueCar has a lot invested and the commercials are there like AutoTrader.  If they are going to grow and advertise to the public they need to fix the problems that they are creating.  TrueCar needs to follow all state regulations and all OEM regulations.  They should also make it so that whatever is being advertised allows for dealers to remain profitable and actually makes automotive dealers look good instead of bad.  If they want to make innovations to the industry they need to help get consumers respecting dealers instead of plotting against them.  I believe that incorporating other transparent strategies and not basing things solely on price can make a difference.


Now the reality is that these things are probably not going to happen if Scott's intentions are really what he made public when he did the videos and presentations.  Perhaps Scott was looking for a way to win me over because I have a lot of influence.  Perhaps Scott did not think before he spoke when he was quoted in the past.  No one will ever really know the truth.  One thing that I do know is that Scott handled the call with me professionally and very humbly and he was great to speak with.  Scott invited me to visit their operations so that he can show me what they do and how they do it.  I know other people have declined.  I am going to accept it.  The reason why I am going to accept it is because I want to see it for myself.  It is an educational experience and it will allow for me to bring back even more thoughts to the industry.


Look we all want to see this fail (including myself).  We need to consider how big it has become.  I mean over 5,000 dealers need to cancel.  If we can get them all to cancel then great.  Otherwise, there is a chance this will continue to grow since the marketing tactics and investments have pushed for the massive growth to happen.  If we cannot defeat this gorilla then we need to help create ways to make this gorilla work for dealers without hurting them.  I am proposing to have an open mind here and have a strategy for what happens is we defeat this as well as a strategy for what happens if we have to live with it.  If we have to live with it let's at least consider the options of making TrueCar make changes that benefit the dealers.


I am not going soft on your guys.  The negative experiences that I had with them at the dealer level will never change what I think of them.  But it is my mission as a member of the industry to give back to the industry that has provided me with skills, opportunity, knowledge, and training to be a better human being.  This is what Dealer eTraining (my company stands for).  Go to my website and look on the home page.  I have a section there where the last sentence states, "Dealer eTraining is about the dealership’s success first and foremost.”  This is my signature motto.  Anyone that has worked with me, been trained by me, or has met me knows that I mean well.


I welcome thoughts and comments.  When you respond I want you to do it with an open mind.  I have done everything with an open mind and you should too.  Thank you.


Stan Sher

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