“Can’t we all just get along?” – Rodney King
Most people think of “the competition” as the enemy. In reality, as Michael Masterson has been telling you for years, your competitors can be some of the most important allies you have in business. Plain and simple, your competition has the most access to your prospective customers, and you to theirs.
Conventional wisdom says that if a customer is buying from your competitor, he can’t be buying from you. And vice versa. Yet nothing could be further from the truth.
Perhaps the greatest hurdle is overcoming the idea that the customer has a finite amount of money to spend or a finite need to be filled. But think, for a minute, about yourself as the consumer. How many television sets are in your house? (It’s okay, I won’t tell Michael Masterson.) Are they all the same brand? Did you buy them all from the same store?
Decades ago, there was one television set per house, if you were lucky, and it was considered a luxury. Today, most people consider TV to be a necessity. In the typical middle-class home, there’s a set in almost every room. It’s the same story with computers. I remember getting our first home computer in 1995. Now we have three of them – for two of us!
So forget the idea that the customer can’t buy from – or even be loyal to – you and your competition at the same time.
Now that you’ve wrapped your head around the idea that there are plenty of consumers out there for you and the other guy, you can start thinking of ways to actually work with your competition – ways that will benefit both of you… as well as your customers.
Depending on what business you’re in, how you can work with the competition will differ. In the world of publishing, for example, people frequently subscribe to multiple publications. So we frequently allow competitors to offer subscriptions to our Health Sciences Institute members, and they allow us the same access to their readers. Generally, we do this by “renting” our mailing list to them. (This is only for print subscribers. We never rent any e-mail names.) But we also look for additional ways to capitalize on our shared relationship with the customer.
Health Sciences Institute has done this successfully with the people at Boardroom publishing online. Recognizing that our customers enjoy both companies’ products, we’ve developed a program for swapping advertising space. Each company is guaranteed a certain number of advertising slots a month, and we share the revenue. So we are each rewarded financially by giving a competitor direct, frequent access to our customers.
Another idea we are testing is “trading” people who have canceled their Health Sciences Institute membership with a competitor for their canceled subscribers. Essentially, these are people who want information on natural health but may not have liked something about the product they chose. That could make them an ideal candidate for another health advisory.
You just need to find the opportunities that work for you.
There is one caveat: Make sure you work with a competitor you trust, and whose products and business practices you’re comfortable with. Your customers will associate your company with any products or services they buy through you or because of your recommendation.
How Much Pie Can You Eat?
In my experience, there are a few challenges you will face in trying to work with your competition. I already mentioned that your competitors probably think you’re the enemy, so you need to approach them prepared to show them the benefits of working together.
Trust is another challenge. In the publishing business, working with competitors often means handing them a copy of your subscriber list. That’s a valuable resource that most publishers aren’t comfortable losing control over. However, there are always solutions. In this case, there are independent third parties (list brokers) you can provide with the list. Plus, if you’re drawing up a contract, you can clearly define the ways the information can be used – and the penalties for misuse. (Again, it’s best to do business with people you trust so this will not be an issue.)
What I have found to be the biggest challenge is that most people negotiate a deal expecting that everyone will bring the exact same thing to the table and get a perfectly even share. I’ve found this to be almost impossible. It’s rare that you will find someone with a customer base the exact size as yours, or someone who will respond to an offer with an equal offer.
My philosophy has been that the pie is big enough for everyone to have a nice-sized serving. And even if you end up with a little more pie than I do, I can still enjoy my piece. So rather than spending a lot of time trying to cut perfectly even slices, I tend to go into a negotiation expecting to give a little more than I get. I see it this way: If I get what I want at the end, it’s a good deal for me.
I always know exactly what I hope to get out of a deal and exactly what I’m willing to “give up” to get it. Being focused on your success and not worrying about the other person “getting more” helps you get started working together. And if you find that the other side benefits substantially more than you do, you can renegotiate when the time comes to make another deal. If they did as well as you think they did, they’ll be happy to work with you to help you get what you want.
There’s Always a Gorilla
Even if you’ve been in business just one day, you’ve heard of – and probably encountered – the infamous 800-pound gorilla. It’s the party that holds the majority of the negotiating cards – typically, the larger of the two. But you can be the bigger company without going into a chest-beating routine.
Remember, anyone who feels bullied in a business deal will carry that feeling with them in all future negotiations. And business is a funny thing. It’s hard to be the big gorilla forever. Other businesses will grow and catch up. And they will remember how you acted when you had the power. So if you are the one in control, treat the company on the other side of the table with respect and show that you value the relationship.
And if you feel like you’re being bullied, walk away. If you feel you’re being forced into terms you don’t agree with, it’s a bad deal – even if you would have made money from it.
It’s interesting to see how quickly the other side stops bullying when you’re ready to leave the room. At this point, you’ll get to see something most people never do: a big gorilla cutting you a bigger piece of pie.[Ed. Note: In addition to serving over 300,000 readers every day as the editor of the Health Sciences Institute e-Alert, Jenny Thompson manages the health subsidiaries of the Agora Publishing group of companies, overseeing the day-to-day operations of businesses that generate annual revenues of approximately $40 million and serve almost one million customers in more than 100 countries.]