Synergy can be a powerful force to grow your business. Think about the 'hot' neighborhoods in your city - the chances are, there's an up-and-coming district somewhere that was little more than an ignored a few years ago.
This doesn't happen because one hip eatery moving into town. When a few more restaurants, art galleries or yoga studios open in the neighborhood, suddenly everyone's business is booming.
Even though two high-quality pizza places on the same block may be competing for the same customers, they're both likely to experience more business than if they were there all alone, because the block becomes known as 'the place' for good pizza.
Here are five reasons to embrace your rivals while improving your bottom line:
1. Honesty builds trust, and trust creates loyalty
Have you ever visited a retail store or service provider, only to discover that they didn't carry or offer what you were looking for? If you are simply sent away empty-handed, you'll be unlikely to ever return to that business for a future need.
"Imagine Macy's Santa Claus sending customers to Gimbels. Ho ho. But, gentlemen, you cannot argue with success. Look at this. Telegrams, messages, telephone calls. The governor's wife, the mayor's wife, over-thankful parents, expressing undying gratitude to Macy's. Never in my entire career... have I seen such a tremendous and immediate response... to a merchandising policy." -- Miracle on 34th Street
Recommending another business, though a seemingly bad idea, may prove your honesty and integrity, which goes a long way for trust.
2. Competitors encourage innovation
Oftentimes, the businesses that become most disgruntled about competition are those that were the first to the market in their field. For example, you might take advantage of your area's beautiful lake or river by opening a kayak tour company.
Think: What can make your company stand out? Could you offer specialized bird watching tour or yoga classes on stand-up paddleboards? Let competition be an excuse to branch out and make your business more well-rounded.
3. More options for customers builds overall demand
Utilizing the example from above, a lake with multiple options for tours will quickly grow as a tourist destination. Locals taking advantage of your services, and guests returning home will begin to think of kayaking as a 'must-do' activity on a visit to your town. That could, in turn, lead to even more competition, but it will ultimately lead to more business for you than if you had retained your monopoly.
4. Overall demand allows you to charge more for quality
Once a business has established itself in a community, the competition can turn one of two ways: Rivals either compete to offer the lowest cost for the same product, or they compete to offer the highest quality version of the product, surrounded by the best possible customer service experience.
Oftentimes, charging more for a better product or service can be more profitable than selling low quality stock in bulk.
5. Creating a team mentality can help with marketing
Would the New York Yankees exist without the Red Sox, Mets and Cardinals? Just as sports leagues need an entire collection of teams for any individual team to have a purpose, consider how a 'league' of businesses similar to yours may be able to collectively influence consumer culture in your area. For example:
- Are you a tech start-up? By joining a local group of similar companies, you'll be better positioned to lobby your municipality or state for tax incentives and a favorable business culture to encourage growth and expansion.
Try to instill a local culture of 'we're all in this together' amongst your field and see customer loyalty flourish in your business.
Bio: Erin Schwartz drives the marketing programs at123Print.com, a leading provider of high quality customizable items like business cards, address labels, banners, and over 100 different products for small businesses and solo practitioners.