The title is obvious, right? You don’t sell in a vacuum. You have to pay attention to what your customers want, what’s going on in society right now, and what the trends are. Of course you must pay attention to seasonal changes, holiday schedules, and change accordingly. You must watch your competition, and make sure that if they are offering a sale or discount, you know what they are doing, so you can remain competitive. All of this is common sense.
The point of this article is to watch your third parties. Often times, we get so wrapped up in what we are doing versus our direct competition, that we forget that there are other businesses that are related to us, that are not really our direct competition, that can either adversely or positively affect our business.
My wife wants to “re-do” our dining room. Maybe I will get lucky, and it means she simply wants to paint it a different color. I like the idea of us spending only $30 on paint and rollers to “re-do” it ourselves… However, there’s a better chance that she wants to do some more expensive upgrades. Where to start? There’s two major changes she could want us to start with: the floor, or the furniture.
Does a furniture store consider a flooring business to be competition? Perhaps they should. They are both competing for the same dollar. As a customer, if I am on a limited budget, I must decide what to start with first. If I find a couch in my price range, that matches my existing carpet, the furniture store wins. If I find a carpet that accentuates my existing furniture, and changes the dynamic of the room, then maybe I’m done with just the floor…
We’ll leave my old dining room alone for a minute, and return back to the overall discussion. If businesses start to look not at who their direct competition is, but rather what businesses could have a positive or negative effect on the company income, there may be a way of creating relationships that would benefit both businesses. Those third party businesses, that don’t directly compete against you product for product, or service for service, could possibly be costing you business. Rather than trying to compete with them, if you had a symbiotic relationship, and could do some cross promotion, there’s a strong possibility of increasing your customer base, and being mutually beneficial.
Thinking about my dining room again, if we were to find out that we could save an additional 25% on the furniture from Merchant X if we buys the new flooring from Merchant Y, there’s a strong chance that we are going to spend more money overall. The two businesses win, and the customers win.
This type of marketing strategy can be hard to start. Networking may not be your thing. Work with your marketing team to figure out how to best begin these commensal business relationships.
Written by Chris Gregoire