"Competition creates better products; alliances create better companies."
Brian Graham

TODAY'S MESSAGE:

In the long run, you'll make more money, build a stronger business, and enjoy your career more if you adopt an open and generous attitude toward your competitors.

This, I know, contradicts much of what is usually said about business.

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IT PAYS TO HELP YOUR COMPETITORS

Most books on the subject treat business as war. Your competitors are your enemy. Beating them out of market share is your goal. If you can get them to go out of business completely, you've triumphed.

I don't share that view. And I'll tell you why.

War is a terrible, painful, and ultimately destructive endeavor. It's what you do when you are too desperate, scared, or stupid to do anything better. Sometimes -- maybe -- war is inevitable. But even then, it's wasteful.

Business shouldn't be wasteful. It should be productive. You begin with a need or desire. You create a product to service that need or satisfy that desire. In place of a void (the need or desire), products, services, and relationships are established. And jobs are created.

You can -- if you like the martial metaphor -- run your business as if you are fighting a war. You can see your market as a battleground. You can hate your competitor. You can try to beat him out of market share and rejoice if he goes out of business.

But if he does, what have you won? A position in a market that has lost one of the agents that was making it grow.

Here's a better idea: Think of the marketplace as a place where you and others in your industry have a common goal: to grow the market itself by creating more value for the customers.

Imagine a market where this idea dominates. How wonderful would that be?

Work first to service your customers. Work second to satisfy yourself and your employees. Work third to help your competitors. All three efforts result in the same good thing: an ever-expanding marketplace of interested, motivated, and satisfied customers.

The next time you have the chance to interact with a competitor, try thinking of him as a sort of colleague -- someone who, though working independently, is trying to do the same thing as you: increase the size of your market.

Try to understand that if he succeeds, the market (your market) will get bigger and you will benefit from that.

Exchange ideas with him. Wish him well. Give him help if you can afford to.

That is how I look at business. And it has worked for me. Making money now -- personally and corporately -- is much, much easier than it was when I started. The reason for that, I think, is that I work in a market where my "competitors" and my "employees" and my "clients" are willing to cooperate with me. And the reason I get cooperation is because they know I'm there for them too.

I was reminded of this issue last night. I decided to have dinner not at 32E, the restaurant my friend BS owns, but at SH, the restaurant next door.

RG, SH's owner, told me that he was selling his business to BS. He had been struggling to make it work but was giving up.

"Why, RG?" I asked him.

"He was there when I needed him," RG said. "I knew he was a good guy. And a fair one. I knew that the price he'd offered would be a fair one."

"So you didn't even bid it out?"

"Nope."

I asked him how BS had helped him out. He said that over the two-year period SH was open, BS would stop by occasionally and chat. RG could see that BS was much more successful than he, and so he'd ask him questions.

"At first, I was timid about asking," said RG. "But BS was so happy to help me. It made it easy to keep asking. He gave me good advice about everything: pricing, advertising, even the menu. He gave me names of vendors that brought down my costs. And he even tried to help me borrow some money once.

"It really helped. I got myself out of the hole I'd dug. But after going through that, I realized I wasn't cut out for the restaurant business. So I called BS and asked him if he wanted to buy me out."

Apparently, they struck some kind of deal that included some cash up front and a back-end payoff for RG. That is obviously just the kind of deal BS would want.

Next month, there will be a new restaurant on the avenue and two businessmen will have profited from it.

Worry about how to make better products and create stronger marketing efforts. My focus is on competing with myself. Can I grow sales by 10% this year? Can I increase profits?

In the short run, fighting with other people in the industry may garner you a few extra sales, but over the long haul you'll do better by trying to be cooperative and helpful.

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MARKETING TIP: MAKE YOUR DIRECT MAIL STAND OUT BY MAKING THE ENVELOPE DIFFERENT

The average American gets 10 direct-mail packages a day. That's the average. The best direct-mail buyers get two or three times that amount.

How do you make your envelope stand out so it gets opened first? There isn't a single answer, but there is a method. Collect 30 direct-mail packages that are currently in the mail. Make sure some of them are from your competitors. Spread them out on a desk -- one messy pile. Now put the envelope your designer came up with (a facsimile will do) in with the rest of the mess. Stand back and take a look. The answer should be obvious.

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Good News! Prices on Good Wines Are Dropping

Vastly increased wine production in the United States, South Africa, Australia, New Zealand, and South America has put a strong downward pressure on prices. After two decades of steadily climbing prices, really good wines are becoming more available and more affordable.

Six years ago, there were just over 300,000 acres of California land devoted to wine cultivation. Today, there is almost twice that number. During the same period, the sale of imported wine went from 17% to 22% of the market, mostly because of cheaper pricing.

According to a recent article in The New York Times, California growers are being hit the hardest -- and among them, the upper-end wines are most affected.

Vineyards are overstocked and the pressure to clear inventory is strong. Between now and the spring, when the new vintages are released, may be a good time to buy.

Some examples of the way this is affecting the cost of a bottle of wine in restaurants: A Raymond Reserve at Keens Steakhouse in New York sold for $75 in 2001. Today, the price is $53. Likewise, a 1998 Chateau Fourcas-Hostensold was $39 at Chanterelle in 2001. Today, it goes for $30.

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WORD TO THE WISE: EBULLIENT

An "ebullient" (ih-BOOL-yunt) guest is an enthusiastic one -- someone who is happy to be alive and bubbling with energy. Ebullient people are good for the spirit … except when you are recovering from too much of the spirits.

MMF

Copyright ETR, LLC, 2003

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