Question

Topic: Strategy

How To Increase Sales By Working With Competitors?

Posted by Anonymous on 12/2/2008 at 7:07 AM ET 125 Points
Hi all,

We're in a position where we have a range of products that our direct competitors don't. Effectively these are business mapping services. Our competitors offer maps, i.e. travel maps and wall maps (as do we) but we are hoping (and have had some proof) that these competitors will be interested in generating more revenue by offering our business services and splitting the profits, or offering a kick back on sale.

So currently I'm thinking we can do it two ways.

1. we have an independant website all companies interested link to and it works somehow like a whitelabel site, i.e. when the company links there, their brand appears etc.

Problems with this - we really don't want to be promoting our competitors brand. But then if I were the competitor I wouldn't want to link to us where we just promote our brand.

I don't really know how to go about this, is a white label site really a good idea? Especially as it's a service, effectively all orders will be processed through our team here.

I'm not sure I've explained myself anywhere near well enough so ask questions please.

Cheers
Liz
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RESPONSES

  • Posted on 12/2/2008 at 9:16 AM Accepted
    Hi Liz,

    Hats down for thinking out of the box. I don't quite understand what kind of service/product you provide that your competitors do not have. Also, who visits this whitelabel website? your competitors, or customers?

    Eitherway, bear in mind the laws of competition. If it is something that you, and you only can provide, then go all the way in promoting it to your competitors. One way can be having their logo on the products and a little caption below like 'Provided/produced/copyrights by [name of your company].

    If it is something that your competitors can replicate easily, eventually even making it a better or cheaper product, than do not promote it with them unless you have an agreement that strictly forbids them from copying your product or ceasing the cooperation before X years.

    If you can maintain the competitive edge then use it.

    Hope it helps.
    Davide Pasini
  • Posted by michael on 12/2/2008 at 9:19 AM Accepted
    Liz,
    You've explained very well. Some resistance could come from your competitors if you track visitors and use that for your own marketing campaign. That's an ethical issue in my mind and you need to determine that in advance.

    Think about American Express. Many of the competing travel companies promote their card. They are rewarded for doing so, but the lines get very blurry in tough economic times.

    Michael
  • Posted on 12/2/2008 at 9:44 AM Author
    thanks for the responses, basically the products we have to offer are more service led, i.e. we have a team here working on customised products. Whereas, our competitors are very product led, I don't think with their markets and plans that they would want to go into our niche service business, set up costs would be far too much.

    I think I'm going to develop a dummy site and tout it around, they can only say no I guess!

    Cheers
    Liz
  • Posted by Frank Hurtte on 12/2/2008 at 9:49 AM Accepted
    You need to always make your product offering through the competition too cheap and profitable for the competitors to think about developing their own. At the same time, always off one feature more on your own version of the product offering for about the same price.

    I have seen this strategy work in automation technology products, software products and asset tracking products.
  • Posted by telemoxie on 12/4/2008 at 2:33 PM Accepted
    What would happen if you turn the situation around?

    Instead of offering your products to your competitors, why couldn't you start by creating a company which would promote your maps as well as resell maps from others?

    This would of course force you to focus on marketing rather than on creating unique maps, but maybe that is where your focus should be anyway.

    If this venture fails, you have not put your firm in danger. However, if it succeeds, you will have more information to plan your next step.

    Good luck.
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