If you think your competitors are your enemies, think again. Here are 5 strategies to leverage your competitors to help you grow your business.
1. Joint venture with your competitor:
Yes I am serious here!
If your client would be better served with a competitive product or service, arrange to provide that product or service to your client at a profit.
You could do this by licensing your competitor’s product or service and private labeling it as your own.
You could buy your competitor’s product at a steep discount and sell it at a profit to your client.
Or you could refer your client over to a competitor for a referral fee or residual percentage.
You could also arrange to do the reverse, selling your product or service to your competitor’s active clients in a mutually profitable and healthy way.
Finally, you could even leverage your competitors to provide back-up capacity should you get a flood of new business. (Of course you’d need clear agreements in place to protect yourself, but done right, this is an easy way to have back-up capacity without any investment in additional infrastructure.)
2. Buy your competitors dead, stale, or sated leads:
Your competitor surely has leads that said no, or have gone stale, or who have already purchased all your competitor has to offer.
Help your competitor turn these leads into an additional revenue stream(s) by selling them to you.
3. Sell your past client leads or inactive clients to your competitor:
This is just the opposite of strategy 2.
Every business has leads who will just never go on to do business with them, or inactive clients who are highly unlikely to come back and do business with them. These former customers may be a valuable fit for your competitor. Consider offering these leads for sale to them for a fee—which can be a percentage of gross sales or a set dollar payment per lead.
4. Reciprocal lead exchange with competitors:
Mutually trade dead, stale, or sated leads with your competitor. Or, if it makes sense, trade your active clients with each other too.
Catalog companies do this all the time. They create a collective clearinghouse that helps them share names amongst several dozen catalog companies.
How can you work together with your competitors to help each of you get more clients and create more options and value for your clients? A crazy question we know, but one that pays to ask.
5. Model your competitors:
What can you learn from modeling your competitor’s best practices?
How can you avoid the things your competitor does that are bad business?
What do your competitors have to teach you that could immediately boost your cash flow?
What one simple part of your competitor’s business could you model that would immediately boost your sales or lower your expenses in the next 90 days?
Be careful here. Sometimes we assume just because our competitor does it that it is a proven, smart thing to do. That is not always the case. Still, if you see them doing something effective, consider modelling it in your own business.
There you have five ways you can profit from your competitors. Remember, having strong competition can often be a powerful force to help you grow your business.