One of the things a service business will have to contend with is competition. As the theory goes, there is only a limited amount of resources, so you need to worry about what the competitors are doing, especially if they undersell you, right?
Let’s look more closely at that.
One of our clients made sixteen referral fees last year. Sixteen! He owns one of the most successful small service businesses we represent. When it comes to bidding jobs, sometimes he wins the bid, and other times, his competitors win the bid. But, he keeps it on a friendly level with all of them, because when it comes right down to it, he sees the bigger picture, the one that benefits the industry as a whole.
Promote the industry
While partnering with competitors may seem counterproductive, it can be beneficial in a number of ways. To be clear, here, we aren’t talking about price-fixing or any of the other illegal stuff some industries do which makes our whole society suffer.
But general partnering strengthens the industry as a whole. Trade associations are an example. Trade associations use the ‘power of many’ to work toward needed legislation, promote trade shows, and share other services which empower the trade as a whole. All trades need leaders who can help competitors come together to improve the industry.
Some trades have the opportunity to work with their competitors, for example, if a company wants to bid on a big job but doesn’t have the workforce or resources to do it. If they partner with a competitor to do the job, the work gets done, and everybody will make some money. It can be a temporary arrangement, and after the job, everyone goes their own ways. If a company doesn’t want to be a part of a bigger project, they can refer them to a competitor they know and trust, which might promote goodwill between the two businesses, and some reciprocal work down the line.
Being the best
We knew a salesman for a large landscape parts supplier. He worked for them for many years, and then, as it happened, he went to work for the competition. When he started the job, his new bosses were understandably nervous, since he’d wiped the floor with them on many occasions when he worked for the competition.
So, to see how he did it, they sent another salesman with him when he started calling on customers. One of the new employee’s first customers was a man who was in charge of an extensive municipal grounds. The customer promptly asked for a large order of parts. The salesman who had been sent by the company to watch the new employee was astonished.
“I bet you wonder why I bought from you guys instead of sticking with the company Bob used to work for, don’t you?” the customer asked, chuckling.
The watcher nodded.
“The thing is,” the customer told him, “Bob here never bagged on you guys or your products when he worked for the other guys. He learned what I needed and always recommended products to me that would solve my immediate problems. He’s helped me so many times in the past that when he tells me your stuff will work, I want it.”
In this case, competence and the willingness to help the customer solve his problems as they came was more important than the company name or even the product.
If a company continually wins bids, it may be because they perpetually put the needs of the customer and industry ahead of their pride or product, instead of worrying about the competition.