As a business owner, a large part of your strategy is to outshine competitors but savvy entrepreneurs know that it is also smart to create and maintain relationships with them.
After my co-founder and I raised our first round of outside investment for Luggage Forward – a door-to-door luggage-delivery company -- our newly formed board of directors encouraged us to get to know our competitors. At first we were unsure of the benefits but we dutifully set out to get to know everyone in our industry. Over the course of a month, we picked up the phone and emailed people in our space to introduce ourselves. Without exception, our calls and emails were well received. Not only were we able to begin building relationships with about a dozen companies -- both direct and indirect competitors -- but we were also to work together to determine the best way to satisfy customers. It was a win-win for everyone around.
For those wondering how to approach competitors, here are a few tips.
Make the first move. Don’t be anxious about blindly reaching out to competitors. Remember that you have each started or run a company in the same industry. Therefore you both likely have a shared passion for the service you provide, product you sell or problem you solve. You will probably find that you have a lot more in common than you thought.
When you first reach out, be friendly, open and honest. Explain that you simply want to introduce yourself and begin a dialogue with them. Also, explain why you think having an open line of communication will be beneficial for both of you.
Be prepared to say no. Before you pick up the phone, prepare for the tough questions. There is a line between the information you can and can’t share with a competitor, such as the direction of your company. A competitor may -- intentionally or otherwise -- ask a question that you don’t want to answer. The last thing you want to be is flustered when put on the spot so be ready for this in advance.
Consider the three to five questions that you would not want to answer and have a polite response at the ready. For example, “I’m sorry, but that is not information we share externally” or “our board has asked us not to disclose this information at this point.” This is a courteous way of deflecting a question without creating tension in the relationship.
Continue the relationship. If you are unsure of how to continue the relationship, find topics that won’t put either of you in a vulnerable position or make them feel threatened. Try discussing outside dangers to your business that are on a macro level. Since you are in the same industry, both of you are facing similar threats and by talking to each other about it you can find a common ground.
Along with this, once you begin to feel comfortable, aim to connect with them on a personal level. Since we are in the travel industry we talk with competitors about recent vacations or a city we love. It is a safe topic as we are all knowledgeable on the subject, but it doesn’t directly affect our businesses. Even if it’s small talk, you will start to create a bond over time.
Find a cadence and check in every quarter or every six months. The more you talk to them, the easier this will become.
In the case of Luggage Forward, getting to know our competitors turned out to be great advice. In the two years following our initial phone calls, we acquired seven of the luggage shipping brands that we initially reached out to. Since we had developed relationships, each side felt more comfortable being open during the acquisition process, making it easier for both parties. This rapid consolidation of our space allowed for a sustained period of growth, which can be directly attributed to reaching out to competitors.
Being friendly with competitors comes with many benefits and knowing how to develop the relationship is crucial. If approached properly, you can build a genuine and trusting rapport. In many cases, it will enable you to be the first in line if a competitor is looking to sell, consolidate or partner with another brand.
No comments:
Post a Comment