Co-opetition: Turning Competitors Into Your New Best Friend
By Susan Kuchinksas
There’s a saying that a rising tide floats all boats. That is, when demand for products or services increases, it benefits everyone providing them. If working with your competitors sounds crazy, read on.
Tracy True Dismukes owns three Collage Designer Consignment stores in the Birmingham area. Her business is not only thriving in this down economy, she’s also created two new businesses that help other resale stores sell more.
Two years ago, when the economy was tanking and recycling became fashionable, she realized that resale shops were in a great position. She bought a 30-minute time slot on the local CW affiliate and got 12 other consignment shops to partner on a weekly television show.
“I knew that once people could see what incredible items we all have in beautiful boutiques with tons of customer service and prices below wholesale, they would be hooked,” Dismukes says.
The show was so successful that she decided to take viewers to the stores they saw on TV and also set up bus tours to stores in the broadcast area of 22 Alabama counties, as well as a couple to Atlanta.
“The bottom line of all this is that by joining together with my ‘competitors’ in town, we’ve created more buzz about consignment in our city, and our group of stores can serve the entire city, whereas each of us alone could serve a relatively small area,” she says.
Meanwhile, ConsignmentChic.com, the website she set up with the help of her sister to draw TV viewers, began to take off. It’s now a national resource with more than 100 stores paying for listings or e-commerce.
Last year, Dan Page launched Funding Strategy Partners, a boutique funding company working with entrepreneurs needing expansion funds. As part of his marketing strategy, he reached out to direct competitors, all of them well-established.
Six of his competitors responded, helping him generate $1.7 million in new business within nine months, without advertising beyond the website.
“What we do is unique in our market place,” says Page, who also is a marketing consultant and publisher of Skill Highway, a content site for small business owners and aspiring entrepreneurs. “I knew from experience that we would have clients that came to us that we couldn’t help, and we’d be happy to point to them others and vice versa.”
Here’s how to turn your competitors into your new best marketing friends:
Identify your co-opetition
Co-opetition is a concept that combines cooperation and competition. The idea is, you both may succeed better by cooperating than by trying to kill the other. Look for a competitor that’s not exactly like your company.
“Most of us have competitors with whom we might compete on 50 or 80 percent, but quite often there is one thing that’s a differentiating point. That’s the strategy that works,” Page says.
For example, if you’re a plumbing contractor who doesn’t do repairs, look for one who does. Yes, Page says, there is a risk that the repair customer will contact your competitor again when it’s time for a remodel, so your best co-opetition prospect is someone whose business competes only 50 percent with yours.
Disarm your competitors’ suspicions
The fact that Dismukes was president of the National Association of Resale and Thrift Shops when she launched ConsignmentChic.com and presented the idea at the national conference helped give her credibility among competitors.
When Page made his initial co-marketing contacts, he devised a script explaining how he could generate more business for them.
“What you don’t do is call up and say, ‘I’m a competitor and I’d like to sell my stuff to your customers.’ Natural human defense mechanisms will kick in,” Page says. “Before you reach for the phone, do research to find out whether there is something they do that you don’t, and that you would like to make available to your customers. If you can’t come up with an answer, don’t call.”
Keep focused on providing value to your co-opetition
“This is a marketing alliance, not just, ‘I want you to pay me money to list you on my website,'” says Dismukes. “We are actively marketing as a group, and when you join together, you create something bigger than yourself.”