“It’s a war out there Mark,” I often hear people say. “Business is war. Eat or be eaten. Kill or be killed. Fight the good fight. And may the best man or women WIN!”
Some think that business IS war. Under this scenario there are victors and vanquished. As Gore Vidal said: “It is not enough to succeed, others must fail.” But does that philosophy really work? Does this really get us more business and loyal customers? Do we have to defeat our competitors to become more important to our customers? Let’s look at the flip side. There is also plenty of talk about relationship marketing, listening to customers, working with suppliers, creating teams, empowerment, strategic partnerships and so on. Aren’t these precepts mutually exclusive? Should we strive for competition or cooperation?The truth is that there are few victors when business is conducted as war. Sure there are those players with whom we are in direct competition. But there are far more that we can cooperate with to benefit the market as a whole. We can do both… co-opetition.
Price Wars
Just look at what happens in price wars. Nobody wins. The price leaders drive the market price down squeezing out competition but in the long run these victors lose their profitability and value in the mix. A good example of this was the airline price wars. Between 1990 and 1993 they lost more money collectively than they made in all the time since Orville and Wilbur Wright!
The Solution
Business is cooperation when it comes to creating a pie and competition when it comes to dividing it up. In other words, business is War and Peace. You have to compete and cooperate at the same time. Your success does not require others to fail. You can compete without having to kill the competition.
Collaboration is the process of working with others. More and more marketers are finding that their customers are demanding bundled solutions. By partnering with others we can become far more important to prospects and customers. We can also create a stream of referrals from credible partners. These type of referrals tend to be a higher quality and are more qualified.Think Compliments
Seek out those that compliment your business. A compliment is a product or service that makes any other product or service more attractive. The classic example of compliments is computer hardware and software. Faster hardware prompts people to upgrade. Powerful software motivates people to buy more faster hardware. Just look at Windows and Pentium chips. Discovering “Complimentors” is about finding a way to make the pie BIGGER rather than fighting over how to slice up a tiny Scooter Pie. So how do we identify competitors and complementors?Complementors
A player is a complementor if customers value your product MORE when they have the other player’s product than when they have your product alone.
Example: Oscar Meyer Hot Dogs and Guldens Mustard
Competitors
A player is a competitor if customers value your product LESS when they have the other player’s product than when they have your product alone.
Example: Coca-Cola and Pepsi -Cola
Typical partners in success have been:
- Disney and McDonalds
- Universal and Burger King
- Sears and Allstate
- Visa and American Airlines
- Perfume Makers and Department Stores
Who are good complimentors for your business? As a business advisor, good complimentors for me are attorneys, CPA’s, designers, Internet professionals, computer consultants, training companies, TV and radio stations, magazines, newspapers, printers, and more. I challenge you to brainstorm a list of 5 to 10 complimentory businesses. Then make a list of specific contacts within those categories that could currently be utilized. First see what you can do to help them. Then watch the magic of co-opetition unfold!