Sometimes the best strategy for catapulting sales is the most counterintuitive. Downright foolish if you ask some folks. But simply brilliant if done right.
Would you like to create new sales out of thin air, without spending a penny on Advertising?
Would you like a new sales force that you don’t have to pay?
Would you like to add additional products and profits to your arsenal, without the expense of creating and stocking them?
If you answered “Yes” to any of the above, read on…because it’s easier than you think.
Where can you find these mysterious new customers and profits?
Before you scoff, let me tell you a story.
One of my clients owns a large tenant screening company. His customers are landlords and property managers that run background checks on tenants before they move in. Tenant screening is a cutthroat business, with little differentiation between competitors.
My task was to find new areas for growth and development.
So I set about studying not only my client’s business, but also that of his direct competition, since experience has proven this process often unveils opportunity.
In addition to tenant screening, my client offers additional services, such as tenant debt collection. So one of my first suggestions was to approach other tenant screening companies (his direct competitors) and offer to let them sell his debt collection service to their customers.
We could even take it further, showing these “competitors” how they can grow their business by using debt collection as a “hook” to acquire new customers. Heck, they could even brand it, if they wanted!
My client was extremely dubious, at best. But he was willing to let me give it a try. So I cold-called on a half dozen competitors. This is some of the most fun I have in business, calling up a company owner and saying “Hi, I’m one of your direct competitors and I want to work with you, so we can both make more money together”. It’s typically not a boring phone call.
Lo and behold, one brave soul took me up on my proposal! We agreed that…
- He would make our debt collection service available to his customers.
- I’d draft all the marketing copy for him, so it was painless to initiate.
- We would do all of the client management and send him a check for each new customer.
- I would show him how to use debt collection as a hook to attract new customers.
- We’d draft a non-compete/non circumvent agreement, so we could not approach these new customers and pitch them on our screening services. In short, we’d be invisible.
That was three years ago, and the relationship has been on autopilot ever since.
Oh, the results? $1.2 Million in new business generated.
Chances are, you can do the same thing for your business.
Here’s How to Start:
Study Your Competitors: Do they sell products/services that you do not? On the flip side, do you have unique products/services they do not possess? Do you serve some different market(s) than they do? Or vice versa? Is it possible they’re turning away customers that are in your sweet spot? Or the reverse? Are there opportunities to partner and attack a market or vertical industry that neither of you could do on your own?
You’re searching for the obvious compliment in your business models. But don’t stop there. Stretch a little and look for the hidden opportunities.
Craft Your Offer: If you find what you believe to be a potential fit, do your homework. Run the numbers to determine what your cost savings would be if someone were to simply drop a customer in your lap. Savings on marketing costs, advertising, etc. Determine what you could give up to acquire this new customer. Brainstorm with colleagues to identify objections, so you’re prepared to address them.
Now Make the Call: Don’t worry. This is the fun part. Call your competitor. Tell them who you are and make it clear that you compete with them. But you have a really ingenious idea about how you can both help each other to earn more profits and grow your business. Wear your integrity on your sleeve. Tell them right up front that if you both choose to work together, you will draft an iron-clad agreement that you cannot steal each other’s business.
Be Prepared to Walk Away: Any partnership can be dicey. And those with competitors are certainly no exception. My approach is to lay it right out in the first meeting, and listen intently for cues to their receptivity and interest. If I hear a stodgy attitude, fraught with suspicion and condemnation, I thank them for their time and suggest that it is perhaps not the best fit. Then move on. If, on the other hand, I encounter an open and intrigued response, the conversation continues.
Done right, these strategic alliances with competitors can add a healthy chunk of incremental sales to your bottom line. Happy hunting!
A seasoned Business Development Specialist, Dan Page helps Venture Capitalists, Private Equity Investors and business owners maximize their sales and ROI.