To get through these trying times, companies everywhere are examining their business models and day-to-day operations. They’re taking a keen eye to everything from their ordering processes to their employee onboarding to help identify the best opportunities to weather the COVID storm.
Traditionally, these conversations don’t include partnering with a competing company, but these match-ups can offer benefits that are unattainable any other way. Teaming up with a competitor can bring some much-needed perspective to your organization, and a true leader is willing to extend a hand to identify new opportunities.
I’ve had no issues playing friendly with competitors, but it’s sometimes hard to find others who share that mindset. Here are four reasons that explain why — and when — you should embrace working with a competitor:
1. Customer satisfaction is of the utmost importance.
More often than not, when two competing companies team up, it’s to the consumer’s benefit, which ultimately benefits each company. Customers should always be your first consideration when determining whether to pursue this type of alliance. Recently, Kyle Slager, CEO and co-founder of Raken, got on my radar for working with competing companies in the construction software industry.
Slager says most of his competitive partnerships are the result of direct customer requests. “Customers don’t want to be forced to choose between one solution or the other, so we give them the opportunity to have the best of both.They are thrilled when they hear they have more choices,” he explained. Because 84 percent of companies that work to improve their customer experience report an increase in their revenue, these customer-driven partnerships pay off handsomely.
2. Competitors can help you fill in the gaps.
Many times, businesses choose a niche category to work in to provide specialized services to customers, but this can leave customers feeling like they’re lacking support in other areas. Identifying a competitor who can help fill these gaps can help you provide a more well-rounded product or service.
Slager experienced this when he teamed up with a competitor for the first time and said, “No matter the industry, when you work with your competitors, you’ll have access to more resources to fill any gaps you may have internally. A healthy connection with the competition allows companies to provide significant value to the industry and customers.”
3. Lead generation times two is always better.
You may not instantly think working with a competitor would result in new business leads coming in the door. Executed correctly, however, collaboration can positively impact a company’s sales cycle. As your competitor becomes intimately familiar with your offerings, your partner is able to screen and send qualified leads your way that weren’t necessarily the best fit for its offerings.
Oracle and SAP, for example, band together when customers want to run SAP’s software on top of the infrastructure provided by Oracle. It results in a better experience for the customer, and it allows each company to benefit via its strong suit. Partner-referred leads reflect true collaboration, and they demonstrate to customers that you have their best interests at heart. If you’re willing to introduce customers to the solutions that best suit their needs — even when they’re not your own — you not only trigger more referrals from your partners, but you also gain loyalty from possible future customers.
4. The competition can increase your brand awareness.
Collaborating with competitors also opens up new opportunities for marketing. Whether you’re looking to co-host an event at a tradeshow or work together on a co-branded webinar, there’s power in increasing your brand awareness. Your competitors have likely tapped a demographic or a use case you haven’t, bringing you a new audience.
These collaborations complement any marketing strategy. Even better, they frequently result in increased brand awareness and inbound marketing leads, which are a top priority for marketers and companies hoping to keep their sales funnels full without spending a huge amount to acquire each new customer.
As companies continue to look for innovative ways to help their business thrive in the COVID era, more entrepreneurs should look within their industries for help. When competing companies focus on maintaining their market share and view each other through a cutthroat lens, great possibilities are overlooked.
This fear-based mindset leaves customers feeling like they’re forced to choose one company over another, resulting in a disjointed feeling across the entire industry. However, there can be hidden benefits to teaming up with a competitor, no matter what industry you’re in. Be willing to look beyond your immediate circle and reach out to others who, believe it or not, can bring something new to the table.