Is It Okay For Software Providers to Compete with Their Customers?
Is it bad when your software providers compete with you for customers? It’s crazy we even have to ask this question.
We don’t all do it, but there’s a handful of automotive software companies that play both sides. They sell software to dealerships for generating leads and sales enablement. They also market themselves to consumers, offer consumer facing products, conflicting directly the goals of a dealership and that same software they’re selling.
How are those two things in conflict with one another?
The biggest of the books spends an estimated $6M a year on paid search advertising (source: Spyfu.com) to drive traffic to their website to get people to value their car. They do a great job, and spend a lot of money doing it, building their brand.
There’s absolutely nothing wrong with that, until you look at the other side.
Here’s where the conflict happens. Dealers are also spending money to drive people to their website, and the number 2 reason people visit a dealer’s website is to value their trade. You’re now competing against each other for the same trade-in opportunity. Can your dealership compete with a $6M ad budget just for trade-ins?
There’s another rub that unless you ask them not to do these two things, they will do these two things.
- When someone is on a dealer’s website and hits the “value my trade” or get more detailed vehicle information button, they’re taken off your site to their site. They’re reinforcing their brand name and image over yours. You should be building your brand, not theirs, in the minds of your customers.
- Those trade-in leads that started on your site? They will resell them to other dealers in your area. Let’s run that back because of how ludicrous this is. A person comes to your site, completes a form that started on your site, and your software provider will re-sell it to your competition. How would you feel if your CRM started marketing directly to your customers, or sending those leads to your competition? Your head would explode.
You can have the software provider turn this off, but you have to ask. Please ask, or just switch to a software company that has basic principles such as not competing with you for business.