Customer Theft Is Not A Business Model

It takes a lot to genuinely make me angry.

I’ve been in business for a very long time. I’ve made it a personal policy to remain forward-thinking—to focus on the goals and challenges directly in front of me rather than dwelling on what happened yesterday.

Over the years, I’ve let a great deal roll off my back for the sake of moving forward.

But I draw the line when a competitor deliberately attempts to take business it did not earn.

I’m not going to name the company because I have no interest in giving it publicity. For the purposes of this article, we’ll simply call it The Desperate Competitor, or TDC.

Approximately one year ago, Flexxbuy purchased Coach Financing. At the time, Coach Financing was using a customer financing platform that TDC provided on a white-label basis.

White-label arrangements are common in our industry. The customer-facing company develops and markets its own brand, acquires the clients and manages those relationships. The underlying technology provider remains largely invisible. Naturally, the branded company pays for the platform and the privilege of presenting it as its own.

After acquiring Coach Financing, we decided to migrate its customer financing business onto the Flexxbuy platform.

It was an easy decision.

We believed our technology, financing options and support infrastructure offered a significantly better experience. We’ve spent more than a decade developing and refining that ecosystem. The migration also violated no contractual obligation owed to TDC.

In fact, TDC had reportedly stopped paying Coach Financing certain agreed-upon commissions months before the acquisition—but that is a story for another day.

Over the past several months, TDC has been directly approaching clients originally acquired by Coach Financing and attempting to win them away by undercutting our pricing.

Let’s be clear: These were not clients acquired through TDC’s marketing efforts. They were not introduced to the business by TDC. Coach Financing invested the time, money and resources required to acquire and develop those relationships.

TDC simply happened to be the invisible technology provider behind the platform.

I understand that building a business is difficult. I’ve been there, and I’m still there. Growth requires creativity, hard work and, in many cases, significant capital. Sometimes you invest in marketing that works. Sometimes you invest in marketing that produces nothing. That is part of the game.

What is not part of the game is using your position as a behind-the-scenes service provider to pursue the clients your customer paid to acquire.

Would I like to win TDC’s clients? Of course. They would like to win ours as well.

That is competition.

Build a better product. Provide better service. Create a stronger value proposition. Market it effectively. Step onto the battlefield and compete fairly.

But attempting to exploit confidential access to another company’s customer base is not innovation. It is not effective salesmanship, and it is not a legitimate growth strategy.

It is desperation disguised as competition.

A company that lacks the resources or imagination to compete honestly may convince itself that shortcuts are justified. But desperation, laziness and questionable ethics are a dangerous combination—especially in an industry built on trust.

I’ve always had a certain belief in business karma.

Intellectually, I understand that karma does not always work the way we would like. Dishonest people sometimes succeed, while good people sometimes struggle.

Still, I choose to believe that operating with integrity, treating relationships with respect and competing honestly creates lasting value.

We intend to stay that course.

I suppose we’ll find out whether good wins out over evil.