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Turn Your Competitors Into Allies

Five ways to increase sales by forging competitive alliances.

Some marketing pundits will tell you that your competitors are "the enemy." But those who think you have to "kill or be killed" to excel in business are on the entirely wrong track. Marketing never needs to be a blood sport. Studies bear out what most of us already know--that entrepreneurs who focus on maximizing profits or increasing sales are more successful in the long run than those who fixate on stomping the competition.

The truth is, your competitors can be a great source of revenue, and forging competitive alliances can help you grow your business more quickly and easily. Need some ideas? Here are five ways to transform your competitors from adversaries to friends to increase sales:

1. Form a National Network
It can be a challenge to market a solitary, small business when facing down national chains. One solution is to forge alliances with businesses like yours in other cities or nearby towns that might otherwise compete with you in order to create a network with a bigger image and scope. Say, for example, you owned a financial consulting firm in Seattle. You might join with other consultants in Portland, Chicago, Los Angeles, Miami, Atlanta, Omaha and Boston and create an umbrella marketing campaign. You'd benefit by agreeing not to encroach on each other's territories, and gain a stronger, more marketable image by having a national network behind you.

2. Create Events and Promotions
Competitive alliances can give you access to a whole new set of customers. When the owners of three quilting shops in Connecticut joined forces to create weekend "Shop Hops," the retailers promoted the events in their marketing newsletters, sending hundreds of new customers through each other's stores. Since each of the shops had a strong point of differentiation--offering different types of fabrics, patterns and classes--they were confident they would retain their own customers while gaining new ones from the joint promotion. One shop owner reported doing a month's worth of sales in a single weekend as a result.

3. Build a Stronger Image
Imagine you owned a small technology company in an area not typically thought of as a high-tech corridor. You could slug it out alone, trying to convince local prospects not to go outside the area to better-known high-tech meccas for services and products, or you could form alliances with other tech companies in your geographic market and create a campaign to transform the area's image. This would result in increased contracts for your company from businesses that might otherwise have looked to out-of-town companies for technology solutions.

Forming competitive alliances with other businesses like yours in your local area can give you the combined spending power you need to market jointly. By joining forces you can fund larger multimedia campaigns either to change opinions close to home, or win business from outside the area by marketing regionally or nationally.

4. Win More Referrals
Friends send you business; enemies don't. No matter what kind of company you own, chances are it differs in many ways from even its closest competitors. Some clients or customers will be right for you and others will find a better fit by choosing to buy from or work with someone else. Get to know your competitors through networking at business or association events and earn their trust and mutual respect. You can formalize your referral relationships by offering referral fees in industries where it's appropriate to do so, or simply keep your arrangements informal and professional.

5. Offer a Joint Product or Service
Are you struggling to win contracts from large corporate clients, but losing out because you lack a big-company image or the right expertise? Consider forming a marketing partnership with a competitor to pitch and win larger contracts by working together to provide a product or service.

In a competitive bid situation, marketing to a mid-level manager in a major corporation can be tough for a small-business owner. Put yourself in the prospect's position; she must make "safe" decisions in order to protect her job. So even when a small and relatively unknown company appears to provide the best solutions, a corporate manager may shy away from it and make a safer choice by going with a larger or better-known company. If you face this challenge, forming an alliance with the right competitor can allow your small business to come on strong and market itself as a safe, more powerful solution.

Kim Gordon

Kim T. Gordon is the "Marketing" coach at Entrepreneur.com and a multifaceted marketing expert, speaker, author and media spokesperson. Over the past 26 years, she's helped millions of small-business owners increase their success through her company, National Marketing Federation Inc.. Her latest book, Maximum Marketing, Minimum Dollars, is now available.