August 14, 2025
Sometimes working with your competition can pay off for both of you. Try it. You might just like it.
We often write about creating value for the prospect within the sales process. Can you also create and receive value from your competition? Here are a few stories from my own experience.
In some industries competitors feel a bond with each other. They know how difficult it is to be in that business, especially when selling to large original equipment manufacturers (OEMs) that put a lot of pressure on suppliers to get the best price. For years I ran a manufacturing company that was in just such an industry.
When one of our competitor’s factories burned down, several competitors stepped forward and offered to produce the company’s products until their factory was rebuilt. Another option for the unlucky owner would have been to send the tooling to their customers and let them sort through the procurement issues involved in moving the tooling. The owner also faced the risk of the tooling not coming back in the condition it was sent —or not getting it back at all.
A few of them suggested he send the tooling (which does not burn in a fire) to them. They promised to run the parts and ship them to his customers in unmarked boxes: “Just tell us what to charge you so that you are still making money on the orders.” When the factory was rebuilt all of the tooling was returned to the original producer. A strong relationship with competition can create as much value as an insurance policy.
Another practice I’ve seen is companies hiring the next generation of their competition: “Why don’t you hire my son and I’ll hire your daughter? They can both benefit from knowing how someone else does things before they work in their family’s business.”
One of the big threats to the metals business for years had been losing business to plastics. Besides being able to charge less than metals providers in many applications, the plastics industry outspends metals by a lot. I suggested at an industry meeting that we pool resources and educate the market about why, in many instances, metals were a better choice than plastics. My message? “Let’s make the pie bigger. We can then all fight over who gets which—larger—piece”.
The reaction to my idea was at first negative. I heard objections like “We don’t want to pay higher dues to the trade association and have it all spent on overhead” and “We don’t think it’s legal.” I couldn’t imagine it being illegal. Other producers in other industries, such as citrus and pork, were doing the exact same thing to tell their story and promote growth for their industry.
I suggested that instead of increasing dues to our trade association that we start a new association that would spend 100 percent of its funding on lead generation. Everyone would get the leads, and then we would compete fairly to see who would win the business. Then I took the additional step of flying to Washington D.C. and meeting with the Commerce Department to see what they thought of the idea, as well as to get an answer to the legality question.
The person I met with agreed that there were no legal issues and even promised to send us some seed money to get the program going. With that endorsement and funding in hand, I asked to speak about the concept at an upcoming national trade association meeting. The idea now got a very positive response and one of our metal-producer members promised to provide a major contribution in addition to the government’s to get the program launched.
Here is a story I heard from Harvey MacKay, who is well known as the author of several best-selling business books, beginning in 1988 with How to Swim with the Sharks without Being Eaten Alive. He was speaking at an event I was facilitating at Northwestern University’s Kellogg Graduate School of Management. Before he wrote a successful book, however, he learned firsthand how to run a successful business.
When Harvey first got into the envelope business, he found the price competition on selling envelopes to be brutal. At a trade association meeting he was having a drink with a competitor. “I never would have imagined how difficult it is to be profitable in this industry,” he said. “We are working very hard and just breaking even.” The competitor asked, “How much are you selling the scrap paper for?” Harvey replied that his company didn’t sell the scrap paper but just disposed of it. The competitor told him the average profit margin in the envelope was the size of the revenue that comes from selling the scrap.
There is no end to how you and your competitors can help each other.
For example, compare what your company does best with what a competitor’s company does best. Is there an opportunity there for referring business to each other? Let’s say that you make large parts and a rival makes miniatures. If you are a custom piece part manufacturer, why not send your competitor inquiries for small parts and in return you get his inquiries for large parts?
My daughter Tory heads up a psychotherapy practice. She noticed that she and her competitors shared a common problem. They didn't have good access to data that would help them manage their practices more effectively. She created a new software product that solved the problem for her own practice and began selling that product to her competition. She now has two businesses, and the new software business is larger than the therapy practice.
If you’d like to discuss this topic more, please call me at 847-446-0008 Ext. 1 or email me at pkrone@productivestrategies.com. We would love to continue the conversation.
Even more practical, productive sales and marketing ideas and advice can be found in Phil’s new book: B2B Selling by Phil Krone Available on Amazon.
