Friends and Foes

It sounds crazy, but your toughest competitor can be your greatest ally when you're vying for a sale.
Magazine Contributor
3 min read

This story appears in the March 2003 issue of Entrepreneur. Subscribe »

If you're tempted to view your closest competitors as "the enemy," take a second look. In today's highly competitive marketing environment, quality competitors can be an asset to your company. They are the businesses that stand behind their products and services, charge a fair price and enhance the reputation of your industry. Yes, they can help you reduce marketing costs, spur innovation and lead to new marketing opportunities. Here's how your company can get a leg up:

Reduce Marketing Costs
The best thing about having active competitors is that they can lower your marketing costs by shortening the learning curve for your prospects. When an innovative product or service is introduced-say, the first fax machine-customers go through an information-gathering period before making a purchase. By the time a second company markets a similar device, customers have passed through the educational period, shortening the sales cycle and reducing marketing costs, putting you in a better position to win them over by offering additional value.

That is why having high-quality competition is an asset. Inferior competition can be a problem if you're the lone high-priced provider surrounded by companies with lower prices. In that case, competition based on price will remain a big issue for your company. But among quality competitors, the most effective tactic is to market based on a value proposition, not a price-cutting strategy. That way, you preserve your ability to offer more costly benefits, such as in-depth customer service, which help you win and keep more customers.

In many industries, businesses have become niche marketers by attacking a particular market segment or by taking on a specialty. Strategic partnerships are a viable option for entrepreneurs who feel limited by their existing niche markets. Often, business owners partner to target a broader base without having to bear the full marketing cost. You can unite to promote your industry, region or companies as a group, enhancing the image of your group as a whole and increasing sales for all.

Avoid Costly Mistakes
No matter how you view your competition, become a student of their marketing by conducting reviews of their materials. That will help you pinpoint opportunities and avoid marketing mistakes. You'll be able to track your competitors' successes and failures, such as campaigns that yield poor results.

What do you bring to the table in terms of insight, expertise, manufacturing ability or service innovations that your competition doesn't? The key is to focus less on what you market and more on the skills you possess. That will help you discover the newest wrinkle-and build on that value-added proposition-to win more sales.


Customers don't have time to wait for your video e-mail marketing message to open-and they certainly won't want to download additional software just to view it. Talkway Communications' VMailTalk software solves both problems. The videos you create are stored on Talkway's servers, eliminating the need for local storage requirements by the end user and resulting in faster delivery. Recipients can view the videos by clicking "play"-although those with incompatible systems will get a link to view them on a Web page. You won't need a state-of-the-art PC to get started, but you will need a Webcam, a microphone, Microsoft Outlook and a few other requirements if you're sending a message.
Price: $4.99 per month.

-Steve Cooper

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