Guy Kawasaki once said: You have to start with the basic premise that you need to know what your competition is doing.
And he is exactly right. If you don’t know what your competition is doing, you’re missing foundational data that will help you shape your business.
Why is this so important?
As a business owner, you need to have better appeal to your prospective customers than your competitors. You need to develop a relationship with them as they go through their decision making process, in hopes that what you share with them will make you look the most appealing choice when it comes time to make their decision.
You hear about business owners who keep the blinders on about their competition and simply plot their own course according to what they think. But you probably don’t hear about them for very long, because operating with that strategy will not get you anywhere.
Then there are the smart business owners [https://www.entrepreneur.com/video/235187] who gain an understanding about competitors by befriending them.
‘What!’ you say?
Yes.
Gaining an understanding of your competitors gives you the information you need to differentiate yourself from them. You have the details that enable you to create unique offerings and to give yourself a competitive advantage.
Competition doesn’t mean warfare.
Just because you have competitors in your marketplace doesn’t mean you have to lay the hate on them. In fact, befriending your competitors works to your advantage.
You may have established your competitive advantage by creating unique classes or class times. Perhaps you brought in a noted hip hop teacher or a former Olympic gymnast as a coach. Or you may have set your pricing to attract siblings or military kids, or offer packages that match up to the median income of the area.
There are plenty of examples of friend-petitor wins, but I haven’t heard any wins that have resulted from ignoring and even dissing competitors.
In fact, I have it on good authority that it is quite the advantage to band together with your market competitors to improve all businesses. If you find it financially difficult to hire a business consultant, consider asking fellow children’s activity center owners for strategic advice.
Don’t feel threatened. Fellow business owners are a source of ideas, lessons learned, support, and mentorship that can help you become more successful. There is a common thread binding you – the types of businesses you’re in. Coming together to share ideas, challenges, wins, and losses is efficient, effective and inspiring.
Let’s look at an example.
Say you have been a gymnastics gym owner for 11 years. You are struggling to reach your growth goals and your ideas for making that happen are drying up. You are discouraged and frustrated. You decide to meet with the group of gym owners that have invited you to their monthly ‘coffees’ – thinking you’re going to commensurate with other area owners who have a similar attitude as you.
The atmosphere isn’t as you assumed. There are owners of all ages and experience levels, coming from every background you could imagine – even those who owned other types of businesses before purchasing their gym.
Driving away from this ‘coffee’ you can feel two things; 1) disappointed that you didn’t learn anything; 2) a renewed spirit ready to put new business strategies in place. Chances are you will feel the latter. You will be inspired by the fresh ideas and creative approaches that your peers shared.
What details should you share?
If thinking of sharing particular details regarding your business makes you uncomfortable, don’t do it. I’m talking about the things that only your spouse and accountant are privy to. You’re likely to have a built-in barometer for this, so stick to it.
On the other hand, there is plenty of helpful information that you can share as a business owner.
- How do you maintain your website?
- Did you like the theme and content at a specific convention this year?
- Have you had any recent issues with apparel vendors?
- How are you finding time to go to seminars and trade shows?
Give your opinion freely. Don’t isolate yourself because you’re afraid someone will know too much about your business. It’s important to your growth and your business growth to get to know your competitors.
Friend-petitors with benefits.
Here are two big areas where businesses can really help each other:
- Recommendations
You will run into situations where your own school is not the best fit for a student or family. You know that a program at another school in your area would work perfectly for this family, so you make the recommendation to send them to a competitor knowing it’s a better fit for everyone involved.
They may not become your customer, but will respect you for your honest opinion, and may be a good reference for you in the future.
Your existing customers will also see that you have the best interests of families and students at heart. This is the perfect foundation for
- Branding
Chances are you want your brand portrayed in a positive light. So when it comes to how you interact with competitors, don’t abandon taking the high road.
There is nothing positive about being known as the school that throws shade on others. Don’t tarnish your braiding by stooping to it.
Don’t tarnish your branding by failing at friend-positive relationships.
How do you become a friend-petitor?
When establishing relationships with a competitive business owner, keep theses three tips from Entrepreneur.com in mind.
- Make the first move. You don’t have to be anxious about reaching out to competitors. Be friendly, open and honest. You own similar companies so you are likely to have some things in common. Learning about what they’ve learned in their process will help you.
- Be prepared to say no. Before you ask for an introduction, know where your line is between information you will and won’t share. You also want to have 3-5 questions of your own to ask them.
- Continue the relationship. Find topics that won’t make either of you feel threatened if you reach a point of uncertainty about how to continue the relationship – maybe checking in quarterly or something like that. Connect with them on a personal level and you’re likely to create a bond over time.
There are huge benefits to being friend-petitors and knowing how to develop the relationship is crucial. If approached properly, you can build a genuine and trusting rapport. In many cases, it will enable you to be the first in line if a competitor is looking to sell, consolidate or partner with another brand.
It’s about more than singular success.
With some effort, you can ensure that everyone – including students and families – is happy and successful. Jon Aardema at Gymnastics Academy of Atlanta is a proponent of befriending competitors. He believes that it is in everyone’s best interest to share resources that will benefit their businesses, the sport and their students.
In fact Jon talks to people about the friend-petitive advantage quite often. Jon’s gymnastics business is in a heavily populated area of Georgia with plenty of toddler to school-aged children. That sounds great, right?
Take Jon’s competitive landscape into consideration before you choose your answer.
There are several other gyms where kids can take gymnastics classes vying for the same students that Jon wants. But the competition doesn’t stop there. Since most parents just want their children active, and will look at all types of activities and facilities for their children, Jon finds that his competitive landscape also includes other children’s activity centers like dance studios and swim schools.
“Working together is an important thing for us as gyms in the Atlanta area. We talk on the phone regularly to share ideas and thoughts,” notes Jon. “It’s a tough business. There isn’t a lot of money for hiring consultants and advisers. It’s to our advantage to work together, sharing our successes and our discoveries, so that we all have the potential for success.”
Like an owner therapy group.
Instead of hoarding their knowledge, Jon enjoys the opportunities he has to help his peers succeed.
“It’s not like we’re pulling out our P&L statements and nosing into the finances of other owners” adds Jon. “We discuss lots of things that are of common interest like challenges in the industry and changes in area demographics.”
It’s obvious that the benefits of being a friend-petitor far outweigh any fear that exists about someone stealing curriculum secrets or luring away students.
By bringing together great ideas, friend-petitors can grow faster, overcome challenges more quickly and innovate within their industry.
Sources:
https://www.entrepreneur.com/article/236550
