How do you treat your competitors?

I notice time and again that dealings with competitors are restrained and sometimes acrimonious. That’s a shame. Because you can learn a lot from dealing openly with competitors. Especially about yourself.

(Reading time: 5 minutes)

A question of culture

How you think about your competitors and how you talk about them is first and foremost a cultural issue. For a long time, the paradigm was that of the aggressive salesperson who doesn’t begrudge his competitors anything, who wins the battles for customers. And takes no prisoners.

Open exchange

I think those days are over. Many companies have realized that it is primarily about finding their specific place in an ecosystem and distinguishing themselves accordingly. In my opinion, positioning and focus have never been as important as they are today.

Contrary to popular belief, you do not focus by concentrating madly on a single thing, but above all by consistently not doing things that are not in focus. This is a subtle but huge difference at first glance.

Because if I no longer do certain things as a company, new opportunities arise. There are many good examples of this at AOE. One of them is that we no longer do CMS projects with a project volume of less than EUR 200k.

Just because we no longer do them doesn’t mean that we no longer receive requests for them. So what do we do with these requests? Instead of just turning them down, we try to help the customer so that they can include another ideal service provider in their selection. In other words, we refer them to a supposed competitor.

For this to work well, I need to know the competitor. On a personal level. I need to know which areas people are good at, what they like to do, what they can achieve and what their weaknesses are. This puts me in a position to direct a request to a competitor that doesn’t suit us. And everyone wins.

From opponent to partner

What happens is that a competitor becomes a partner. I’m happy to pass on a few such leads and later talk to the competitor and try to find out whether they can pass on leads that are not ideal for them, in our case for projects that are too large and too complex. In the vast majority of cases, this works quite well.

Now we don’t keep any accounts. It’s enough to know each other and benefit from each other. It’s in the nature of things that sometimes one benefits more than the other. Live and let live.

Talks with competitors

When I started talking to competitors 15 years ago, everyone in the company thought it was pretty absurd. Although I was managing director, I was repeatedly told not to reveal which suppliers we were buying from and what price conditions we had.

I could never understand this kind of fear of loss. On the contrary. It was and still is only possible to get a real benchmark and assess yourself by exchanging ideas with the competition.

The experiences with this are typical: You think for a long time that you are rather weak in one area as a company, only to find out later in discussions with competitors that you have actually solved/organized this area quite well. Of course, there are also reverse examples. Not so great then. But you can learn a lot from both and ultimately improve.

Popularity

What is also usually neglected a little is the external image. Anyone who struts around at industry events like a provoked bull and doesn’t talk to anyone doesn’t present a good image. Such people come across as unsympathetic and are treated accordingly by competitors later on. You won’t get any leads, won’t be approached for collaborations and if your company messes up a project, this will be gleefully publicized in the industry and to customers. Being a popular player in an industry is a major asset that many companies underestimate.

Exceptions: Oversaturated markets and heterogeneous products

Of course, the better the market is, the easier it is to have an open exchange. In a market that is growing extremely fast, like the market for digital solutions, there is room for everyone and the atmosphere is correspondingly good. In an oversaturated market, this is logically more difficult if competitor XY regularly takes customers away from you. It becomes all the more difficult if they do this using unfair methods. However, this is not the case in most sectors. But even in such a scenario, you can’t really profit from it if you just stay in your own quiet little room.

Positive challenge

I like to see competition as a tough, friendly and positive challenge. It’s like a tennis match where you want to win at all costs and don’t give your opponent anything. But when the game is over or there is a break, you treat each other like friends. This is also how fruitful competition should be. And once again: if you have done your homework in terms of positioning, there is much more complementarity than substitution between providers in the service market. The services are too heterogeneous.

Example

Last month, we noticed a good example of how to deal with competitors in different ways. We realized one of the biggest omni-channel projects with Magento for Frankfurt Airport, won prizes for it and got a lot of media coverage. As with the project for Angry Birds a few years ago, the project is not only a milestone for AOE and our client, but also hugely important for Magento and its implementation partners.

Two of our competitors have published corresponding news articles on their websites. One of them, Vaimo, explained the project in a longer article and included a lot of content. There was also a funny little dig at us.

The other, TWT, positioned a short derivative of the official press release in such a way that it made it appear that Magento had implemented the project. And didn’t mention us at all.

Of course, we are not angry with TWT. Nor do we think the procedure was wrong. They will certainly have had their good reasons for doing it this way. But yes, we would probably have done it differently. No big deal.

You always appear

Much more interesting, however, are the reactions from third parties. A handful of customers and competitors sent me the link to the TWT article with the comment “Look, they’re presenting it as if you weren’t involved”. I immediately replied that this was probably a mistake or a misunderstanding. And I do indeed think so. After all, TWT is one of the leading agencies in the German eCommerce business.

In day-to-day business life, however, such things do have an impact. I say this from experience. The more open and benevolent you are towards your competitors, the better. So I can only advise you to seek more informal discussions with your competitors, build up personal relationships and maintain a lively exchange. It pays off. Just as openness and exchange always pay off.