Time and again I can observe that dealings with competitors are often reserved and sometimes even dogged. This is unfortunate, for one has much to learn in dealing openly with the competition – especially about oneself.
A question of culture
The manner in which one thinks and speaks about your competitors is first and foremost a question of culture. For the longest time, the accepted paradigm was that of the aggressive salesman who begrudges his competitors anything, who wins the battles for customers. And who takes no prisoners.
I think these times are over. Many companies have realized that the primary business driver is to find a specific space in an ecosystem and to distinguish oneself accordingly. In my opinion, positioning and focusing have never been more important than they are today.
Contrary to popular opinion, focusing is not about exclusively concentrating on one thing, but first and foremost to consistently forego doing things that are not in the company’s focus. At first glance this is a fine but nevertheless significant difference.
For, when I as company no longer do certain things, new opportunities arise. Here at AOE we have plenty of excellent examples. One of them being that we no longer do CMS projects under a project volume of 200,000 Euros.
Just because we don’t do these projects anymore, doesn’t mean that we don’t receive inquiries about them. What then do we do with these requests? Instead of simply declining, we try to help the client in such a way that the customer can include another suitable service provider in his selection. In other words, we refer him to a supposed competitor.
For this to work one must know one’s competition. Personally. I must know in which area people are really good, what they like to do, which services they can provide and where their weaknesses are. In this way, I’m in a position to refer an inquiry that isn’t a good fit for us to a competitor according to the situation. And everybody wins.
From opponent to partner
What happens then is that the competitor becomes a partner. I’m happy to refer a few such leads and then talk to the competitor later – trying to find out if he can’t refer unsuitable leads (in our case, projects that are too large and complex) to us. In most cases this works quite well.
Of course we don’t keep score here. But it’s enough to know each other and to benefit from each other. It’s in the nature of things that sometimes one party benefits a little more, sometimes the other. Live and let live.
Conversations with competitors
When I began these exchanges with competitors 15 years ago, everyone in the company thought the idea pretty outlandish. Even though I was managing director, it was repeatedly drummed into me to please not reveal which vendors we did business with and what our price conditions were.
I could never comprehend this sort of fear of loss. On the contrary, this exchange with the competition was and remains the only possible way to set a realistic benchmark and assess oneself.
Experiences with this are typical: For a long time one thinks that, as a company, one is rather weak in a certain area – just to later find out in conversations with competitors that the company has solved a problem or has organized itself quite successfully in exactly that area. The reverse can also be true, of course. Not to good, then – but you can learn a lot from both. And improve.
What is often neglected is the image you project to the outside. Those who strut around reservedly at events like provoked bulls and don’t talk to anyone project a poor image. Such people are perceived as uncongenial and are subsequently treated accordingly by the competition. They aren’t given any leads, aren’t invited to cooperations and, should their company commit a project blunder, this fact is hashed over with relish by industry players and in front of customers. To be popular in the industry is a huge asset for any player – something that is underrated by many companies.
Exceptions: Oversaturated markets and heterogeneous products
Naturally, an open exchange becomes increasingly easier depending on the quality of the market. In a market that is growing rapidly, such as the market for digital solutions, there is room for everyone and the vibes are correspondingly good. Logically, this is more difficult in an oversaturated market – when competitor XYZ regularly steals customers. And it becomes even more problematic if he does this using unfair means. However, this is not the reality in most industries. But even in such a scenario one cannot benefit from retreating into one’s own shell.
I view competition as a tough, friendly and positive challenge. Just like a tennis match, where you want to win at all costs and give the opponent no quarter. But, once the game is over or during changeovers you interact in a friendly manner. One should also structure fruitful competition along these lines. And, to reiterate, if you’ve done your homework regarding positioning, then the service market is much more about vendors complementing each other rather than substituting. For, the services are much to heterogeneous.
We noticed something that can serve as a good example of how differently competitors can deal with each other during the past month. Using Magento, we implemented one of the largest omnichannel projects for the Frankfurt Airport – a project for which we won several awards and that received extensive media coverage. As with the Angry Bird project a few years ago, the project is a milestone not only for AOE and our clients, but it is also enormously important for Magento and thus for their implementation partners.
Among other, two of our competitors posted appropriate news articles. One, Vaimo, explained the project in a lengthy article that contained a lot of content, including a friendly and humorous gibe in our direction.
The other, TWT, positioned a small derivative of the official press release in such a way that the impression was conveyed that Magento implemented the project. And AOE wasn’t mentioned in a single word.
Now, we naturally won’t hold this against TWT. And we don’t think this approach is dead wrong. They surely had valid reasons to handle this in the way they did. But yes, we would have probably done things differently. No big deal.
One always has an impact
Far more interesting, though, are the reactions from others. For example, a handful of customers and competitor send me the link to the TWT article with the words, “Look, they’re giving the impression that you weren’t even involved.” I answered promptly that this was probably a mistake or a misunderstanding. And I actually think that this is the case. After all, TWT is one of the leading agencies in the German E-Commerce industry.
But, these thinks do echo in daily business. I base this statement on experience. The more open and benevolent you are toward your competitors, the better. I can therefore only recommend that you increase your informal conversations with competitors, to expand personal relationships and maintain a lively exchange. It pays off. As openness and exchange inevitably do.