Are you a small business owner who’s eager to expand your business and learn different strategies to successfully grow your small business? If it feels like you’ve tried and failed to scale your business, you’re not alone. Many small business owners find it difficult to expand their businesses once they’ve reached a certain level of success. To remain successful, it’s crucial to find a sustainable way to grow your business so you can continually attract new customers. Take a moment to learn how your competition can grow your business.
Founder and CEO of Succeeding Small, Madeleine Costa, has always been passionate about helping other entrepreneurs reach their small business goals. As a small business owner herself, Madeleine understands that one of the most difficult parts of being successful is strategically and successfully scaling your small business. Keep on reading to find out how collaborating with your competitors can help your business grow! Yes, that’s right; you can partner with your competitors to help benefit your own business.
The Importance Of Competitor Relationships
Recently, Madeleine has been experimenting with referral relationships and competitor partnerships. This strategy has not only proven to help her maximize her time but has also allowed her to gain more leads without actually pitching Succeeding Small to anyone. Before you begin to build relationships with your competitors, it’s important to consider what industry you and your competitors are in.
For example, Succeeding Small is in the service industry. This means that Succeeding Small is going to have a different business model than a product-based business or a brick-and-mortar store. Once you have a solid understanding of your industry and how it operates, you’ll be better equipped to take the tools that you’ll learn throughout this blog and apply it to your business’ unique space.
If you have a list of your competitors running through your mind right now and are thinking to yourself, “There’s no way that I could have a relationship with them,” keep on reading to change your mind! Maybe some of your competitors are unethical or you’re intimated by certain competition in your space. Whatever your hesitation is with building competitor relationships, just remember that many small business owners have the same hesitations as you.
What Is Abundance Versus Scarcity?
When preparing to build relationships with your competitors, it’s important to have a specific mindset. There’s a networking philosophy called Abundance versus Scarcity, which is the idea that there is plenty of business available to go around versus there being so little business that you need to take every business opportunity you can get.
If you’re going to be taking the approach of building relationships with your competitors, you want to make sure to have the mindset of abundance. You also want to make sure the competitors that you’re interested in collaborating with are in the same mindset. If you try to build a relationship with a competitor who has the scarcity mindset, you’ll soon find yourself disappointed. Someone with the scarcity mindset won’t be willing to fully collaborate with another individual because they’ll feel like there isn’t enough business available for the competitor relationship to ever truly work. This will leave them fearful, intimidated, or taking advantage of you and your efforts.
How Can You Benefit From Competitor Relationships?
Keep on reading to find out how your business can benefit from smart and strategic competitor relationships! Forming relationships with your competitors can benefit both of you. This is how your competition can grow your business.
Get More Leads for Your Ideal Client
For example, let’s pretend you’re an HVAC contractor who offers every service imaginable. You offer services such as furnace tune-ups, A/C installations, residential work, and commercial work. However, you prefer large-scale, commercial jobs and aren’t passionate about doing smaller HVAC services anymore. On the other hand, your competitor who offers the same services as you love the smaller jobs and prefers to do HVAC services such as maintenance jobs and small residential repairs.
Now, if the two of you form a relationship, you can send clients to him who need smaller work and he can send clients to you who need bigger work. Without really putting in any extra marketing efforts, you’re now getting your ideal clients and don’t have to complete HVAC jobs that don’t interest you anymore. So, when you approach your competition, make sure to ask them who their ideal clients are and what they’re passionate about. Ask questions like, “How do you want to fill up your books? Who do you want to be working for? Who is your ideal client?” Chances are, even though you both may offer the same services, they’ll have a different ideal client than you. A relationship between competitors with different ideal clientele allows the two companies to pass business back and forth.
Complement Each Other’s Services
Another type of competitor relationship is forming a relationship with someone who offers different services than you. Maybe you offer a specific service that they don’t provide or vice versa. This relationship allows you to offer more comprehensive services to your clients and therefore, provides a better experience that will entice them to keep coming back to your business. Here’s a great example of exactly how your competition can grow your business.
As a digital marketing agency, Succeeding Small offers everything from SEO services to social media marketing services. However, Succeeding Small doesn’t offer professional headshots. So, if a client needs professional headshots for their team, Succeeding Small can say, “We don’t offer that service, but we know a wonderful professional photographer. Here’s their information!”
This type of referral relationship benefits the client because they’re able to have all of their needs met, this benefits Succeeding Small because they weren’t selfish and attempted to do something they don’t do just to hold on to a client, and this benefits the professional photographer who now has a new client and more photos to add to their portfolio.
Get Ideal Referrals Based on Client Budget
Another example of how your competition can grow your business is the ability to partner with others in your industry who have different price points than you. Let’s consider the HVAC example again. If you provide large-scale HVAC services that are out of a certain customer’s budget, you can refer them to your competitor who has more affordable prices for smaller jobs.
Enjoy the Relationship & Exchange Advice
Another benefit of partnering with your competition is simply being able to build relationships with other business owners who are in the same boat as you. It can be extremely refreshing and rewarding to share your struggles with another business owner and have them understand your frustrations because they have gone through the same difficulties. You’ll find that you’re able to ask advice from another business owner who was once in the same stage of business as you. They can tell you what went well and what didn’t and you can learn from them.
Being able to build a network of like-minded business owners can immensely help boost your confidence and help you brainstorm ideas from people who have walked the same path as you.
How to Structure Competitor Relationships for Financial Gain
How do you actually format this partnership with your competitors? There are a few ways that you can structure this relationship to financially benefit from working with your competition.
One of the most common competitor relationships revolves around contracting. This involves you being a contractor for one of your competitors. This is usually done behind the scenes and the customer usually doesn’t know that you’re the one completing the job. This type of relationship is extremely common in the service industry and the trade industry. If you’re in the marketing world, you may have heard this being referred to as white labeling.
For example, let’s say you offer professional snow removal services and become a contractor for a full-service landscaping company. Now, the landscaping company can offer snow removal services to their clients but you’re going to be the one actually doing the work. This benefits you because the landscaping company is the one building the relationship with the client, signing the client, and collecting payment from the client. All you have to do is remove the snow and you get paid.
Direct Compensation for Referrals
Another way to financially benefit from an arrangement like this is to compensate your competitors for bringing you clients. You can either offer a finder’s fee or a deal on the first month of your contractual relationship.
For example, if you offer professional snow removal services to a landscaping company, you can either offer them a $200 finder’s fee or a 10 percent discount off the first month’s contract. Remember, these are just examples, you can obviously tweak these to find an arrangement that works for you and your competitor.
It’s also important to consider how to approach this contractual relationship strategically. Maybe you want to give a referral and not ask anything in return to help build up the relationship. Or, maybe you want to have a discussion right away to set the parameters of the relationship and see how you can both benefit financially. Each situation will be unique, so make sure to consider each competitor when deciding which of these two strategies would be best.
Host a Shared Event
You can also host events, workshops, etc. where you and your competitors come together for the community. So, let’s say you’re holding a seminar for the community on how to properly take care of your HVAC system in the winter. You and your competitor would split the cost of putting on the event, you both sell tickets, you split the profit of ticket sales, and you both will hopefully get some new clientele from the seminar.
Bundle Your Products/Services
Another way to financially benefit your business with a competitor is to create a bundle package. This bundle package would include both your services and your competitor’s services that you would sell to your clients and they would sell to their clients.
This is extremely beneficial because in selling a package that includes both of your services, you both get rewarded with new clients and sales.
Customers appreciate these types of packages because they get multiple things done at once. They don’t have to talk to multiple people to get a bunch of different services. Instead, they talk to you and your competitor, buy one package, and have all of their needs taken care of.
How To Find Competitors to Collaborate With
Now that you know how you can benefit from competitive relationships, you need to know how to find competitors in your industry who are willing to partner with you.
Step One – Choose The Right Words
The first step in forming these relationships is to determine what type of language you’re going to use. You may find that your competitors are not as open to this type of relationship as you are, or they’re intimidated by working with direct competition and are hesitant to speak with you. It’s helpful to come up with a script so you know exactly how to start this type of conversation. Consider using openers such as, “Hey, I’m looking to build relationships with other companies in order to best serve my clients.” Or, you can say something like, “ I would love to sit down with you, learn more about you and your company, and see if there’s room for us to partner together.”
Step Two – Explore Groups
Next, you want to find competitors to build these unique relationships with. In addition to reaching out to competitors that you’re aware of, you can also join Facebook groups. Facebook is a wonderful resource when it comes to finding different community groups, both in your industry and other industries. Once you’re a member of these online groups, you can simply create a post that outlines what you’re looking for, talks a little bit about yourself and your own company, and discusses why you want to partner with people in these spaces. You’ll be surprised at how many responses you’ll get with this technique! You can also use LinkedIn to find potential competitors to work with. You can sort by profession and find people in your area who are also a part of your specific industry.
Step Three – The Introductions
Then, you’re going to want to set up introductory meetings with people who have shown interest in partnering with you. Whether they reach out to you or you reach out to them, an introductory meeting is a great place to start. Consider setting up a virtual 30-minute meeting, that way you can be intentional with your time. Usually, 30 minutes is plenty of time to get a good idea of a person and decide whether or not you’re interested in working with them.
Succeeding Small Is Here To Help You Learn How To Collaborate With Your Competition
Now that you understand how to approach competitors, reach out to these individuals, and create a beneficial partnership, you have all of the tools you need to build relationships with your competition. Building these types of relationships can be transformative for your business. By using these tools, you’ll be able to develop financial relationships where both you and your competitor benefit and are exposed to more clients than before. If you’ve used these tools before, please email our team at Succeeding Small and let us know how you benefitted from these relationships. If you decide to integrate this type of partnership into your business strategy, let us know how you’re navigating it and how it’s working out for you!