The battle for the CRM (customer relationship management) customer has moved to the courtroom. SAP AG won a ban on a German advertising campaign by rival Siebel Systems Inc. and is contemplating legal action in the U.K.
SAP charges that Siebel is competing unfairly by copying its ad designs. The Siebel ads in question name one or more companies with a “runs Siebel” punch line, according to SAP of Walldorf, Germany. SAP ads had a “runs SAP” punch line.
“Siebel has been running a series of ads in its attempt to get a foothold in the German market. The ads were absolutely identical to the SAP ads. They basically took an ad campaign that we were running since September 2000 and copied it,” said SAP spokesman William Wohl on Wednesday.
“The expression is that imitation is the sincerest form of flattery, but in this case this is not the kind of flattery we want because it creates confusion,” he said, adding that SAP raised its concerns with Siebel, but got no response.
Siebel of San Mateo, California, runs the same ads in the U.K. and SAP might go to court to get a ban there as well, said Wohl.
“We are examining ads that Siebel is running in the U.K. and are evaluating our legal options in that market. We will be aggressive on the point of fair competition anywhere on the globe we do business,” he said.
Siebel said it would comply with the court ruling, but attacked the German legal system. “We find it curious that a German court would take this action without granting a hearing or a discussion of the facts,” Siebel said in a statement Wednesday.
SAP is pleased that Siebel is going stop running the ads, but said Siebel “still doesn’t understand the issue.”
“The accuracy of the ads was never in question. There are customers that run both Siebel and SAP. German law has a very high standard on fair competition and the court found Siebel’s (ads) were misleading and confusing,” said SAP’s Wohl.
Corporate buyers could be turned off by the bitter battle of the rivals, said Bill Clough, research manager with IDC.
“I think SAP and Siebel’s cutthroat marketing tactics will only backfire, corporate buyers are not interested in mudslinging,” he said.
Clough is finalizing IDC’s 2001 European CRM market share numbers, but it is clear that SAP’s share of the market jumped, while Siebel’s share decreased.
“In 2001 Siebel’s share in Europe dropped a couple of percentage points, they are in the high 20s, while SAP will go to about 10 percent from 1 percent compared with 2000. SAP’s German market share will be a bit higher because of the home-market advantage,” Clough said.