"David, I'm in a highly competitive market. My competition is breathing down my neck. What advice can you give me to keep my lead in the market?"
What a great question. We had a fast paced brainstorming session about how this business owner could maintain her edge.
But then somewhere in there the conversation went down another channel. This one was about all the ways you could leverage your competition to help you grow faster.
Here is a quick list of the 8 best ideas we came up with to spark your thinking about strategies to help you scale faster.
1. 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.
This is a common practice in many industries and may work well for you.
2. Sell your dead, stale, or sated leads to your competition, providing an additional revenue stream for you.
This can be used to offset your lead cost, or just to add to your bottom line.
3. If you don't want to sell them your leads, and they don't either, explore the possibility of doing a formal reciprocal lead exchange with your competitors.
Mutually trade dead, stale, or sated leads with your competitors. Or, if it makes sense, trade your active clients with each other too.
Direct marketing companies do this all the time. They create a collective clearinghouse that helps them share names amongst several dozen direct marketing 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 I know, but one that could be very profitable to ask yourself.
4. Joint venture with one of your competitors. Perhaps it makes sense to host a joint event? Or to mutually create a product or service line? There is a fancy name for this - coopetition. Essentially what it says is that in some circumstances, cooperating is in all party's interests.
5. License or private label part of your competitor's product or service line. 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.
6. 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?
7. Share excess capacity. If you have production capacity (plant or staff; product or service) and your competition has a temporarily fluctuation and need for your excess capacity, it may be in your interest to sell them that capacity. The same may be true in reverse. This may allow both of you to handle a spike in demand without investing in short term capacity, and at the same time provide additional revenue for the other party.
8. Create an information sharing relationship. For example, one law firm that we coach recently wanted to raise his hourly pricing for his associate attorneys and paralegal staff. He called up two of his competitors whom he works hard to keep a collegial relationship with, and learned that he could raise pricing by $25-100 per hour per billable staff member and still be in line with his competition.
My intention in this article was to spark you to think fresh about your competition. Obviously you won't necessarily have the level of trust and respect with all your competitors to leverage these strategies, but my guess is that you might have it with one or more of them.
If you want to learn more ways to effectively grow your business and get your life back, I encourage you to download a free copy of my newest book, Build a Business, Not a Job. Click here for full details and to get your complimentary copy.