The case for conspiring with your competition
In February 2012, Rand Fishkin and Dharmesh Shah came together for what some believed to be an unlikely partnership. Together, they launched Inbound.org, a community for marketers to “stay current and connected.” For years, Fishkin, the founder of Moz, and Shah, the founder of HubSpot, were considered rivals, despite actually being friends. Though both run competing inbound marketing platforms, each believed in the importance of hosting a community of likeminded marketers wherein members exchange experiences and teach each other new skills.
So far, the partnership has been a success. In August, Inbound.org reached 100,000 members and, today, Inbound.org serves as an extension of the Moz and HubSpot brands. In business, competitors may be an asset more than a threat. Like in the case of Moz and HubSpot, companies can leverage strategic alliances with rivals for their mutual benefit.
To foster collaborative relationships with your competitors, here are three tips from firms that set aside their differences to create win-win scenarios.
Exchange insider information
Every organization has unique insights into its industry and hidden talents that make it special. Though most competing companies believe it best to withhold trade secrets, some are convinced that a bare-all strategy actually helps business.
Eric Samson, managing director of marketing agency Group 8A shares, “The only competitors I keep at arm’s length are agencies that directly poach my clients. I consider everyone else an ally. I spend a lot of time connecting with and helping other marketers who, in turn, always teach me something I didn’t know earlier.” And while sharing expertise and knowledge can help companies grow, Samson also realized how the strategy leads to new business. Friendly agencies regularly refer Group 8A work because they can vouch for Samson’s character and competence.
In industries where demand is limitless, firms do not need to be cagey about how they work. Many times, this creates good karma and raises the standard of excellence for yourself and others in your industry.
Generate buzz together
When likeminded businesses get together, they can start a trend. Gina Dobson, founder of children’s online retailer Sunrise Girl, partnered with nine other companies that create clothes for young girls to promote apparel that sends kids a positive message. Their campaign, #ClothesWithoutLimits, became a runaway success.
“We garnered national publicity, approximately 8,000 campaign followers through social media, and increased sales that none of our businesses would have achieved alone,” says Dobson. We appeared on a daytime talk show (Home & Family on the Hallmark Channel) and will be speaking at a college event because of our campaign.”
Operating independently, their shared mission would not have been as interesting or newsworthy. But because 10 small businesses partnered on the initiative, audiences took notice. In order for a partnership between competitors to be successful, Dobson suggests, “It needs to start with genuine, mutual respect. The participating parties must subscribe to a theory of abundance not scarcity. They need to truly believe there’s enough to go around (enough customers, enough sales, enough publicity, etc.) and resist the urge to believe that the other’s benefit means their loss. There needs to be trust and a similar idea of fairness.”
Share costs and resources
When Marc Prosser, now the co-founder of Fit Small Business, worked in forex trading, he had an idea to produce a show on subject. But there was one issue: “The show would have cost millions of dollars to produce, and the network wanted to guarantee that they would receive enough money to cover the cost of the program,” says Prosser. To mitigate his company’s risk, he decided to turn to another forex trading company. “It made a lot of sense to partner with a competitor to take on this cost—and opportunity.”
The pitch was simple. “This show had the potential to grow the industry as a whole,” adds Prosser. “It would make more people comfortable and familiar with our type of business and would give us a huge boost in credibility. So it was important to our industry that the show exist.”
Thankfully, a competitor agreed to co-sponsor the program and everyone benefited. “The show attracted a weekly audience of 100,000 to 200,000 viewers, and was enormously successful in getting brand recognition for both our companies,” says Prosser.
To succeed, businesses need to reimagine the meaning of “competitor.” Contentious rivalries are bad for business. Strategic partnerships, on the other hand, can significantly increase brand awareness and sales.