How can collaborating with competitors bring success?

An increasing trend in business as service organizations become more and more niche oriented is for businesses to actively seek partnerships with competitors. If you have strong and well understood unique skills and competencies, this does not need to be a “zero sum game”. Instead of the equation being weighted to “they win, I lose”; you’ll find that it is possible for both competitors to win, if you are open to partnering up through referrals, subcontracting, or some type of collaboration. And in an arrangement like this, your customer is much more likely to consider it a win.

Whether you partner or not, it is critical to both marketing and strategic planning to know and understand who your competitors are. Who are your customers choosing to do the work or provide the service? Who do they prefer? Why?

When you start out to make a list of your top competitors, keep three things in mind:

1. Regardless of your knowledge of the community in which you work, your business landscape; if you have not asked this question of your customers, you don’t have an accurate focus on who your competitors are. Find an effective way in your dialogues with customers to make them comfortable sharing with you their ideas about where their options and alternatives lie, and why.
2. Many organizations make the mistake of not including in their list of competitors the most frequent and often strongest option: DIY. In any decision about a service or program that answers a need, your customers will always consider build or buy. They may collaborate with each other to build their own service, or do it on their own – but count on the fact that it is a top candidate. This is especially true in a service industry, and particularly in a tough economy.
3. Finally, if you are thinking strategically and plan to be around a while, always spend some time considering whether there may be the potential for disruptive “indirect” competitors. Are there ways that your customers can meet, avoid, or change the game that are outside the box completely?

The next step is where you will spend time understand what your unique strengths and weaknesses are compared to your top competitors. Whether you are serious about partnering with competitors, or you take a more traditional approach, “know thyself”. Identify the areas where your skills, services and expertise are much stronger than the others on your list – and understand the areas that may be weaknesses for you compared to others. In this way, your
communication with customers and stakeholders about where your value fits will be clearer. Additionally, it takes you a step closer to partnering. One good way to understand this is with a SWOT (strengths, weaknesses, opportunities and threats) analysis; which I’ll cover in another post.

How is all this going to help you to compete more effectively?

If you are not interested in partnering to provide a solution, you’ll come out of this exercise with a much clearer understand of your own positioning. What should your messaging emphasize as a uniquely strong capability?

At this point, you should also start to see where opportunities to work together with competitors are surfacing. Do you excel at professional development and training, but you don’t have the systems to produce and publish the tools developed from your work? Is someone else known for their ability to evaluate a problem and consult on planning and implementation; but they don’t provide the training or staffing that their clients might need for the next steps? This is where subcontracting opportunities can become clear, if you are honest and careful in your appraisal. Remember that in an increasingly specialized world, it is unlikely that any organization can be a one stop shop. Partnering to solve a problem can be better for you, and better for the customer.

How does this work if your customers are doing it themselves, or partnering with each other to do it without you? Take a step back and work on understanding what about the solution they’ve found works for them. What does the DIY option offer? What need does it not meet, and are there gaps that might fit in with your specific expertise? If they are building a service that you already offer, why? Can you provide training to help them do a better job? Can you recommend partners that supply something they will need?

What are the benefits of this approach?

• Better service for your customers and stakeholders.
• A reputation for being a solution to problems rather than part of the noise.
• A very effective potential marketing channel, through co-marketing with your competitors to extend your reach.
• The chance to focus your effort toward building your strengths, rather than struggling to be everything to everybody.