Aaron Hoos

Real estate and financial advisors are under a lot of pressure to lower their fees for clients.

The pressure is sometimes audibly heard from clients who blatantly ask: “Would you consider lowering your fee for me?“. And sometimes it’s not heard at all because the prospective client doesn’t bother using your service and decides to go a “do-it-themselves” route.

How can real estate and financial professionals overcome this pricing pressure and charge what they deserve to earn for their services? And, how can you attract and retain clients who happily pay this rate instead of trying to grind you down or try to do it themselves without your help?

LOOKING ELSEWHERE FOR INSIGHT

We can find the answer by looking at businesses (in other industries) that get clients to pay higher fees:

• Movie theatres charge higher-than-average prices for a ticket to a movie… and then they charge even more for popcorn and drinks.
• Apple charges higher-than-average fees for their iPhones and iPads and yet they enjoy massive growth and marketshare retention.
• Visa and MasterCard charge controversially high interest rates (19% on the low-end) but that doesn’t stop people from running their expenses through their cards and even maxing them out sometimes.

What do all of these businesses have in common? They offer something that the customer cannot get anywhere else.

That’s the secret.

Although there are cheaper alternatives (such as renting a movie, buying a non-Apple mobile device or tablet, or paying with cash or debit), the businesses listed above offer products and services that make the cheaper alternatives pale in comparison.

Customers perceive that the theater experience or the Apple brand or the own-it-now-instead-of-later convenience of credit cards are so valuable that the extra cost is worthwhile.

For many years, the financial and real estate industries enjoyed a similar “exclusive” reputation but…

FINANCIAL AND REAL ESTATE HAVE CHANGED

Clients used to put a lot of trust into their financial advisors and real estate agents because these professionals provided exclusive high-value service that the client could not get anywhere else. But the internet transformed these industries and levelled the playing field between professionals and their clients.

Clients could perform far more of their own research and gain easier access to information and services that were difficult to access.

Although financial and real estate professionals still provide an invaluable service, clients don’t perceive the value that they used to perceive so they want to try doing the same thing on their own. Unlike the businesses we listed earlier, the difference between the higher-priced offering and the lower-priced alternative does not seem different enough (in the clients’ eyes).

Therefore, professionals need offer even more services and demonstrate even greater value than they ever have before.

It’s time to put your innovation hat on and do the following:

• List all of the services you perform (both free and paid). Then find ways to ramp them up and make them even more valuable for your client. Consider adding more information, new technology, and go-the-extra-mile service.
• Think about the information you currently provide. Chances are, quite a bit of it is available online for free. So dig deep and find additional insight you can give to your clients that they can’t get anywhere else.
• Brainstorm activities that your clients do, which are related to your service but not something you currently provide. Figure out how you can extend your services to include those related activities. For real estate professionals: Once a client buys a home, they have to make arrangements to move in. Can you extend your services to include managing those end-to-end moving details for them? For financial professionals: Clients who buy investments and insurance from you might also need accounting done. Can you bring an accountant into your office to provide a full net worth management service?
• A big part of the value difference is simply perception. People who go for the do-it-themselves approach instead of hiring you are doing so because they don’t see a difference between your services and the cheaper alternative. Revisit your marketing to see how it positions you. If your marketing isn’t positioning you as the ONLY professional for your prospective clients’ needs, find out how you can be different and rework that marketing content. If you’re not sure where to start, try listing all of the things that clients would miss out by choosing a do-it-themselves approach instead of using your approach. List as many items as you can. Then brainstorm further to create a larger list (and develop new services of your own, if possible). The larger the list, the better.

One of the most important things a financial or real estate professional can do to grow their business is identify what makes them unique in the marketplace.

It’s so important because the market is saturated with financial and real estate professionals and many (dare I say “most”?) offer almost exactly the same service at exactly the same price.

Financial advisors offer guidance that isn’t too different from other financial advisors. Real estate agents help to list or buy a home in a way that isn’t too different from other real estate agents. (There might be some differences, but often it’s not enough for the clients to spot them easily).

CLIENTS DON’T SEE THE DIFFERENCE

There’s no motivation or loyalty among clients because they do not perceive a significant difference between service providers – one financial provider looks very similar to another and one real estate professional looks very similar to another.

When customers don’t perceive a difference, they don’t care who they call and they’ll go with whatever is most convenient for them – whoever happens to have an office closer to their home or whoever happens to be at the top of their mind when they pick up the phone to call.

Take control of your brand and your reputation. Be different than the rest and you’ll glue your name in your customers’ minds for the next time they need your services.

So how DO you demonstrate your difference? How DO you prove to prospects that they should sign with you right now because they’ll never find anyone like you again? How DO you prove to customers that it’s worth driving across town to do business with you even when there are other professionals who are located closer to them?

A USP — “Unique Selling Proposition” — is a way to understand that difference.

INTRODUCING THE USP

There’s a good chance that you’ve heard of a USP even if you haven’t identified one for yourself.

A USP is a comprehensive statement about what makes you different than anyone else in your industry. When you state your USP, it should describe you and only you, and it shouldn’t describe anyone else.

A USP is not a slogan or tagline. You might never actually say your USP to people. But the message of your USP should be loud and clear in everything you do. Most importantly (and this is the part that many financial and real estate professionals miss), a USP should describe only you.

When I say it should describe only you, here’s what I mean: Let’s say that you work with a customer once and then years later that customer needs your services again. The problem is that customers might not be able to remember your actual name. But if you have a strong, dynamic USP, there’s a better chance they’ll remember that and it might be enough for them to find you.

So if your USP currently is something like “I care about my customers and wouldn’t recommend that they invest in anything that I wouldn’t invest in myself” or “I’ll sell my client’s homes with the same care and attention that I’d sell my own home” then you don’t have a Unique Selling Proposition. Sorry. All you have is a half-baked statement that doesn’t stand up and call attention to you. It calls attention to just about every professional out there.

A USP should work like this: It should be able to describe you to the point where it excludes almost everyone else who could be a direct competitor. (Sure, there might be a financial advisor in Arkansas who has a similar USP or there might be a real estate agent in Alaska who has exactly the same USP as you, but if you’re doing business anywhere else, they’re not direct competitors).

To borrow USPs from other industries, consider how Apple products are extremely user friendly and owning an Apple product gives users a sense of community. Or, consider how Google “owns” the idea of being the first choice in search, even though there are lots of other search engines out there.

WHEN DO YOU USE YOUR USP?

You may or may not ever state your USP in your marketing. However, you will use your USP as the foundation for everything else in your business – your brand and all of its elements (like your slogan, your logo, your brand colors, your brand attitude, your brand concept, your brand promise, etc.), as well as your marketing and deliverables.

Your USP, therefore is one of the building blocks on which you will create your business and it will enable you to sell more: When your clients are asked by their friends why they chose you to help them, your USP will probably be a key reason.

Think of your USP not as a tagline but as a framework on which you’ll build your brand.

STEP 1: FIGURE OUT WHO YOU ARE

To write create a USP, you need to figure out who you are. Yeah, we’re really going back to basics here but you’ll thank me for it.

Go get a big pile of 3×5 cards. Using the list below, write down at least one thing that describes you in that area. (Preferably, write down several things – one on each card).

• Education
• Experience
• Expertise
• Skills/Talent
• Interests
• Credentials
• Methodology
• Deliverables
• Target market
• Personality

If possible, write several cards for each topic. I’ve done that, below for myself.

Write down as many descriptions as you can think of for each of the areas listed above. (Note that I’ve included two interests of mine — “beer” and “poker” — along with several other more professional elements like my education and experience).

Spend some time doing this. Don’t try to squeeze the entire exercise into a half hour. Force yourself to go deeper. Education and experience might be easy but the other stuff may prove to be slightly more challenging. When I did this very exercise, I uncovered some compelling ideas I hadn’t considered but it took some digging.

STEP 2: MIX TO DISCOVER POTENTIAL USP’S

Now that you’ve written down who you are on several 3×5 cards, it’s time to figure out how you can be different. In this step, you’re going to select just a few of the elements to highlight in your USP. Just because you highlight a few elements doesn’t eliminate the others. However, it’s good to highlight just a few – it will make your brand development and marketing easier, and it will make you more memorable.

So, shuffle the cards together and select a few at once, laying them out in front of you. Try dealing out 2-5 in a batch and seeing what sticks. You should see one of the following combinations:

• Groups of cards that don’t make sense together. That’s okay. It happens. Creativity requires a lot of failures.
• Groups of cards that don’t really make sense but are maybe the start of something. Good! Write down that combination for later!
• Groups of cards that nicely capture something about what you do in a unique way. Excellent!

On a separate sheet of paper, write down the combination if it seems good or great then reshuffle the cards and deal out another 2-5 cards.

At the end of this part of the exercise you should have dealt out dozens of combinations and you should have a few (hopefully a handful of at least 4-7 card-groups) that you can work with. These are the starting points and you’ll work with them and narrow them down into just one great USP.

Here are some examples:

This is an example of a jazz-loving real estate professional in the Dallas/Fort Worth area:

And here’s an example of a financial advisor who has a combination of interests that seem related:

The examples above show a few “starting points” that a financial advisor and a real estate agent might build from to create their USP.

STEP 3: TAKE IT UP A NOTCH

Now you’re just getting warmed up! The next step is to give these some zing. Turn them into something special by tightening them up a little. You don’t have to polish them perfectly (because you’re only going to choose one from the group you have), but this process helps you to think a little further about them.
To make each one better, try doing some of the following:

• Try making it more specific rather than just a few words strung together: “I’m the jazz saxophone real estate agent”.
• Dust off your copywriting skills and compress the group of words down to a tight sentence that nicely summarizes how you are different.
• Tie your USP in with something familiar. The James-Bond-style USP (pictured as an example earlier) is familiar enough but there might be other things you can use – a famous character or landmark are handy. Just be careful of trademarks.
• Start your sentence with declaration. For example, “I am the only real estate agent who…” or “I am the only financial advisor who…”. (Hat tip to Marty Neumeier, author of The Brand Gap for this great technique).
• Identify a group of words that you can “own”. Think of this group of words as a keyword set in Google. So when someone types in those keywords, your name (and ONLY your name) appears in the Google search. (Hat tip to Al Ries and Jack Trout for this technique).
• Give it an edge. If “real estate agent” is too blasé, see if you can find something that means the same thing but says it in a different way. Will “Home Sale Expert” help to separate you by clearly identify a specific area of expertise? The “Jazz-loving Home Sale Expert” sounds much more dynamic and memorable than “real estate agent”.

You can also add some other elements to help you narrow your USP in different ways. For example, try narrowing your USP by geography…

or try combining one focus with another, like I’ve shown below…

or try narrowing your USP by some other specialty…

Now it’s time to rate each potential USP on a quick-and-dirty scale of “I don’t like it”, “It’s a decent starting point”, and “I really like this”. Get rid of the ones you don’t like. See if you can’t tweak the decent batch. Try to end up with 2-4 USPs that you can move forward with.

Then it’s time to figure out what other people think.

STEP 4: VALIDATE YOUR FINDINGS

Validating your potential USPs will help you to narrow the field even further. The two easiest ways to validate your findings is to validate against competitors and validate with customers.

Validate against competitors: Using a list of local professionals who compete directly with you, compare each of your potential USPs to each competitor. Are they actually Unique (to you) Selling Propositions? If you used them as your USP, would they only describe you or could they describe someone else?

For example, if your USP was something like: “I’m the real estate professional who loves the art of the deal” – well that sounds great but we can make the safe assumption that most of your real estate agent competitors love the art of the deal (or would at least tell their clients that they do). Or, if your USP is “I’m the only financial advisor who acts professionally by wearing a suit to the office” – well that sounds great but probably many financial advisors do that. Those USPs aren’t really “U” so they’ll need to be scrapped.

Compare each of your potential USPs to each of your competitors. This might sound like a long step but it will probably go faster than you realize.

Validate with clients: Validating with customers is a little trickier but not impossible. For example, you can write articles around the specific USP and post them on your website then measure traffic. Or if you have the time and/or financial budget, you can easily test this with Google AdWords. Create one AdWords ad for each USP and run them for a short period of time. Then measure click-through rates to see how people respond.

Or, if you don’t mind just asking your clients then just ask them! That’s easy enough. Say something like: “I’m designing some marketing for the upcoming season and I wondered which of these 5 descriptions really jumps out at you?“, and, “if you had to describe me to your friends, which of these 5 descriptions would most describe me?“. It’s good to ask both questions because the first question separates you from the USP to ask about marketability and memorability, while the second question asks them to identify how congruent you are with the USP.

If you ask your clients, you should ask a few. Don’t base your decision on just one or two clients. And, just because they pick one doesn’t mean you have to choose that one. But their input will be informative. Perhaps they’ll give good advice about one USP that you eventually weave into a different USP.

STEP 5: GUT CHECK. WILL IT WORK FOR YOU?

Now that you’ve done some leg-work in creating and then validating your potential USPs, you should have narrowed your USPs down to just a couple of really strong ones.

Your next question needs to be: Can you support this USP? By that I mean: Will you be able to build a brand and marketing content around this USP? And, can you live with this USP?

In most cases, creating brand and marketing content around a USP should be possible… but you might find a potential USP you really like that doesn’t lend itself well to a brand.

The great challenge, though, will be “can you live with this USP?” In other words, what will your response be if someone calls you up out of the blue and just quotes your USP back to you? For example, “Are you the real estate agent who wears the chicken costume?” What happens if your friends or family find out what your USP is. Can you live with that? I’ve found this question to be quite challenging at times and have scrapped several potential USPs because I realized that I didn’t want to be known as that 5 or 10 years down the road.

STEP 6: NARROW IT DOWN

At this point, you should only have a couple of potential USPs that are really compelling, have been validated against competitors and with clients, and are USPs that you can get excited about. Now it’s time to pick one. If you’re really unsure, it might be worth doing some more testing (maybe using Google AdWords or asking more clients). Do this until you have one. Just one. One big, shiny, happy, awesome, compelling USP that describes you and only you.

WANT AN EXAMPLE?

I wasn’t going to use my own USP as an example because I don’t want it to seem like I’m overly promoting myself here. I don’t want my blog to seem like an ego trip. But I think it’s a good example of a rough-around-the-edges USP that works nicely. So, if you’ll forgive me for talking about myself for a moment, I’ll demonstrate with my own USP.

For the past several years, my USP has remained the same (even though my brand has been tweaked and improved). In general, my USP is this: I’m a (formerly) licensed stockbroker/insurance agent with an MBA who has spent over a decade writing online content for financial and real estate businesses.

It’s not pretty but it’s not supposed to be. It’s an “internal” summary of what makes me unique among freelance writers. And, if you click around my site and other marketing channels, you’ll see that I’ve incorporated elements of it in just about everything – from my tagline to my bios to my About Me page to the stuff I write about.

And it works. That’s why I’ve stuck with it. It gets me business and it is continually validated by clients who say something like “I hired you because you worked in the industry” or “I hired you because your MBA provides you with a bigger picture.”

Okay, enough about me. I’m not here to stroke my ego. I just wanted to show you an example of one that has worked. It’s a framework that I build my entire business off of.

HERE’S WHAT TO DO NEXT

Now that you have your USP, you’re ready to start building your brand and your marketing. Here’s how:

• Create a slogan or tagline that hints at your USP
• Revisit your professional photographs to make sure that they reflect your USP
• Rewrite your bio content and About Me pages to reflect your USP.
• Make it a point to weave elements of your USP into all of your marketing content, no matter what the channel
• Identify a keyword or keyphrase that you can “own” in Google that relates to your USP.

From there, continue to incorporate your USP into everything. Make sure that all content that leaves your office communicates at least some aspect of your USP in some way.

If you’ve read this far, congratulations! It’s possibly the world’s longest blog post. Hey, do me a favor and put your USP into the comments. I’d love to read it!

In my recent blog post 99 ways to optimize your sales funnel and grow your business, one of my tips was to do a competitive analysis to see what your competitors are offering that you aren’t. Explore how you might offer similar benefits in a superior way.

In this blog, I want to show you how to do that.

COMPETITION: IT’S GOOD AND BAD

Competitors make us better. But it means that we can’t let down our guard even for an instant. We need to innovate relentlessly and we need to differentiate ourselves from our competitors. (Check out this blog post on the 6 reasons that you WANT to have competitors in your marketplace).

If you provide value to your Customers, and if you have effectively differentiated yourself, there is room in the marketplace for you. Competitive analysis is the in-depth review of your competition (individually and from a big-picture industry perspective) to identify their strengths and weaknesses (and to highlight your own strengths and weaknesses in light of your competitors) and to mitigate threats while you extend opportunities.

HOW TO PERFORM A COMPETITIVE ANALYSIS

You can use a variety of competitive analysis tools and I’ll give you a couple of ways to analyze your competition.

The first thing you need to do is decide who you are going to analyze. You have more competitors than you think:

• There are your direct competitors who sell almost exactly the same thing as you. However, not all of them sell the same product to the same market. You need to decide whether you want to study only those who sell to your current target market or you want to study those who sell to other markets.
• You also might want to study those products or services that are not like yours at all but which your target market uses instead of your product or service. (A simple example might be a car dealership — they could study other car dealerships but they might want to also study public transportation).

Even that list will be pretty big so you might need to cut it down further… perhaps by proximity to you or size or where their company is headed compared to yours.

Now it’s time for some competitive analysis. I like to look at three things during competitive analysis. You can go much deeper, but these three things will be an easy place to start and will allow you to make big, competitive changes in your business:

Step 1: Get a basic handle on your competitor’s company. Get a simple overview of who they are and what they do. You can use my Business Diamond Framework for this or you can use well-known Waterman/Phillips/Peters 7S Model and list elements for each of the seven S’s.

Step 2: Figure out how you and your competitors are positioned in the marketplace. Map out your marketplace to determine how your competitors are positioning themselves. Use a simple 2-axis chart comparing two different aspects of the marketplace or of the product your sell, then place you and your competitors on that chart. For an example of how to do this, check out a blog post about a beer market study that showed how Dos Equis positioned itself in the marketplace).

Step 3: Compare sales funnels to highlight differences in marketing and sales techniques and in Customer relationships. Use the Sales Funnel Worksheet to map out your competitor’s sales funnel to help you identify how they are building relationships with Audiences, Leads, Prospects, Customers, and Evangelists.

By using these three simple steps –a brief business analysis, a marketplace analysis, and a sales funnel analysis, you will end up with a very good idea of how your competition works. You can go much deeper — to the point of being able to write the equivalent of a business plan for your competitor. If you really want to know the competition well and win a lot of marketshare from them then this is necessary. (This is akin to the often-told business story of the photocopy repair person who could take apart and put together the competitor’s photocopiers blindfolded). You can go that deep, and if your competitors are really aggressive, you might have to. However, the three steps I’ve listed above are a good first start.

WHAT NEXT?

After your competitive analysis, you can use the information gleaned from the above steps to make your business better. In general, I would say that the best ways to make your business better are by mitigating weaknesses, leveraging strengths, pursuing new markets, building stronger relationships in current markets, and innovating.

Here are some ideas to do that.

• Blue Ocean Strategy is (in my opinion) one of the three best books on the topic of gaining a advantage over competitors. (The others are Michael Porter’s Competitive Advantage and Competitive Strategy).
• Growing your business doesn’t necessarily mean getting more of your target market to buy your product or service. It can mean: Getting a different target market to buy your product or service, or, getting your existing target market to buy different products.
• Innovate in your sales funnel to change how you sell your product or service.
• If your products are nearly identical to your competition’s products, and you can’t easily change them, then build highly valuable relationships with your Customers.

When I was in high school, my friend’s family owned the very first computer store in town. I was always sort of impressed that they had a lock on that market. I imagined a business without competition to be the highest level of business achievement – a sort of entrepreneurial nirvana.

Then, to my surprise, I learned that they were helping someone else start a computer store in the same town. In other words, they were helping to create their own competition! I didn’t understand it at all. When I asked my friend’s dad about it, he said that competition is good for business. Although he didn’t go into detail, it was a lesson I never forgot (I even remember the exact moment when he told me – it was in the kitchen of their house – it was a watershed moment for me).

It took me years to learn why competition is a good thing, but I now realize that it is essential to a strong, prosperous business. Here are my top 6 reasons why I embrace competition:

REASON #1: COMPETITORS DEFINE YOUR BUSINESS

Competitors help you to figure out what you do. If you are starting a business and you examine how your competitors define themselves, you can identify a point of difference that they are not addressing.

It’s like being lost and using a couple of fixed objects to help you figure out where you are. Your competitors are those fixed objects and you can easily find your way in the marketplace when you compare yourself to your competition.

Creating a business that has too much identical competition (everyone sells exactly the same thing at exactly the same price – real estate agents are a good example) will eventually result in a price war with your competitors. But if you look at your competitors as a starting point and then you define yourself carefully, strategically, and in a different way from the rest of the pack, you’ll help to attract the right people to your business (people who might not be attracted to your competitor). You won’t have to compete on price because your competitors are different from you.

For more information about differentiation and competition, read my blog posts: Equal is not good enough and Mine is bigger than yours — competitiveness and marketing content.

REASON #2: COMPETITORS KEEP YOU HUNGRY

A couple of years ago, I met someone who owned a business that was in-demand and the only kind like it in the entire state. The guy charged insanely high prices and 100% interest on unpaid debts. He could make his own schedule and he didn’t need to provide good customer service. Sounds awesome, at first – you can do what you want and you basically have a licence to print money. But eventually, some other entrepreneur will spot the opportunity in that market and see that he or she could make a financial killing while charging less AND providing exemplary service… and suddenly the first guy’s business is in trouble.

When I was a freelance writer, I would sometimes get frustrated at the low-priced freelancer writers who would charge next-to-nothing, undercutting my prices. On more than one occasion, it caused me to look at my prices and sometimes consider lowering them. (Fortunately, I never did). I realize now that those low-priced competitors kept me hungry and I worked harder to out-work and out-earn those competitors. I’m glad for them now.

REASON #3: COMPETITORS COMPEL INNOVATION

In economics, inflation is kind of like a swarm of termites. You don’t see them but they eat away at the stuff you own. Inflation causes upward pressure on prices so that $1.00 tomorrow is worth less than $1.00 today. In other words, if you’re standing still in your finances, you’re actually going backwards.

It’s the same in business. If you want to create a product or service, build a sales funnel, automate it, and then go sip margaritas on a beach, think again. Your business is “standing still” (not innovating) and your competition will outpace you with newer, faster, shinier products and services. While you’re asking the lifeguard to put sunscreen on the places where you can’t reach, your competitors will be inventing a better mousetrap. Before you know it, your business will sputter and die because no one wants your clumsy old offering.

Your competitors are innovating, so you need to as well. Their very existence forces you to get creative, invest in your business, and reach for more. That’s great for your customers and for your business’ longevity. Read more about innovation at my blog post: My best advice on innovation. And this blog post provides an interesting take on innovation: Want a competitive advantage? Offer the same products as everyone else!

REASON #4: COMPETITORS BECOME CASE STUDIES

In your own business, every interaction in your sales funnel is a piece of data that you can analyze to make your business better. You watch for patterns, for sudden changes, and for opportunities. You put all of these pieces together, you compare it with your metrics, and you can make huge, positive changes in your business.

But if you raise your head out of your sales funnel for a moment and glance across the street at your competition, you’ll learn quite a bit, too. Yes, you won’t have all of the facts or metrics, but you can put together an awful lot just by looking in their windows, browsing their website, mystery shopping them, and listening to both happy and disaffected customers.

Watch for competitors’ marketing campaigns that have a huge impact. Analyze the types of people going through your competitors’ doors. Find patterns among the disaffected customers who decide to switch providers and buy from you instead. By simply watching your competitor, you can learn so much from them to benefit your own business. They become a living, breathing MBA case study to make you a smarter entrepreneur.

Want a place to start? Why not do some really simple competitive research to figure out how to price your products or services. Learn more about it at this blog post: How to easily discover the best price for your product or service.

REASON #5: COMPETITORS RAISE MARKET AWARENESS

Imagine a town in which there are only two companies providing window cleaning services. They both market their services aggressively and have their own point of difference. Simply by advertising the benefit of cleaner windows, they highlight the problem of dirty windows in the market’s mind and the market will search for a window cleaning company – even if it’s not the one whose advertising initially prompted their awareness.

It’s the principle of 1+1=3. Competitors’ marketing will attract new Leads (and sometimes YOUR Leads) to the competitor, but it will also alert the general marketplace to the general problem or need. People from the marketplace will look for a solution or fulfillment and may end up in your sales funnel as a result (all because they became aware of the problem or need from your competitor’s ad). Note: I’m not suggesting that you don’t leave all of the marketing to your competition. However, I think that competitors who advertise in the same market will have a greater cumulative effect than if they each advertised in their own market).

REASON #6: COMPETITORS CAN BECOME COOPERATORS

I love motorsports, especially NASCAR. One of the things that makes the sport great is when two competitors will work together to push ahead of everyone else. Overall, they are still ruthless competitors, but for a brief moment they can put aside their differences to eliminate the rest of the competition.

The same thing can happen in business, too. You can work together with a few carefully chosen competitors to win more customers and outpace other competitors. Now, please note: There are laws about collusion and I’m not suggesting you circumvent those laws – you’re not doing this to raise prices across the board or to destroy a few competitors. There are ways to legally cooperate with your competitors for mutual benefit. For example, you can share the costs of joint advertising to reach different markets through the same channels. Or, you can send each other potential customers who may be a better fit for the other than for you. When I was a freelance writer, I competed against other freelance writers, of course. But when a Prospect wanted to buy from me and I discovered that they were not a good fit (perhaps I didn’t have the bandwidth to help them, or maybe they were in an industry I knew nothing about), I had a few carefully chosen competitors who I felt comfortable recommending them to. And the relationship worked both ways – those competitors knew who I was interested in working with and they would send people to me.

WHAT THIS MEANS FOR YOU

First, welcome competition. If there are no competitors in your marketplace, be wary. Dare to invite competitors to your marketplace! Get to know your competition as individuals, but also get to know their businesses. Use competitive analysis to learn as much as you can about them. Find out how you can help them (and take the first step to do so) and you may see some reciprocation. And always keep an eye on your competition to motivate you to stay hungry and stay innovative!

Hey, this blog post gives another reason to love competitors: 4 ways to insert yourself into your competitor’s sales funnel and steal their customers.

Thanks to my friend Ken Symes for letting me know about this great sales funnel story.

Okay, before I can tell you about this story, I need to give you a bit of context because many of you are from around the world. Here’s something you need to know about Canada:

Tim Hortons is a coffee shop but it might as well be Canada’s religion. There are other coffee shops in Canada, of course (there are at least 3 Starbucks within a five minute drive from my house). There are also regional coffee shops like a company called Country Style, who are building a presence in Ontario and trying to win out against the Canadian’s default choice: Tim Hortons.

Think of it this way: Tim Hortons is the McDonalds of Canadian coffee. And Country Style is like Wisconsin Burger — serving the good people of just one state and battling against the juggernaut.

Now on to my blog post…

On a regular basis (annually? Maybe more frequently), Tim Hortons has a promotion called “Roll Up the Rim to Win”. You buy a coffee, drink it, and then roll up the rim to reveal if you’ve won a prize. You might win a car, a donut, or all kinds of other stuff. Of course there are lots and lots of “try again” rims. Tim Hortons is already INSANELY popular when they’re not running the promotion but they become even crazier during their Roll Up the Rim contest.

So how do smaller companies like Country Style win out against Tim Hortons? They aren’t national so they don’t have the the same reach as Tim Hortons. They don’t have the same fanatical consumer base as Tim Hortons. As a result of those two things, they don’t have nearly the budget to market a similar promotion or offer prizes on the scale of Tim Hortons.

But they don’t have to. Instead, Country Style did something quite clever: They are creating their own buzz and stealing customers from Tim Hortons’ sales funnel.

They’re doing this with a promotion called “Sorry Try Again” and basically it works like this: If you bring a Tim Hortons rim to a Country Style location, you get a free coffee.

This can, at first, sound like a backwards promotion: Customers are paying Tim Hortons and then they’re getting a free coffee at Country Style. However, if Country Style wants to win marketshare away from Tim Hortons, this is a good way to do it: That first free coffee becomes a loss leader with the hopes that the customer will taste it and say “oh, this is as good as Tim Hortons coffee… maybe I’ll avoid the crazy lineups every morning and stop at Country Style instead.”

As well, Country Style knows that few people buy ONLY a coffee. They probably buy a coffee for themselves and their friend. Or they buy a coffee and a donut. Which makes this promotion a good way to increase non-coffee sales or to mitigate losses from their loss leader.

It is a risky move: They could give away tons of free coffee and not gain anything from it. And they currently don’t have a chance of gaining significant marketshare from Tim Hortons. However, they should be able to at least present themselves to some people as a viable alternative… and that could be the foot in the door they need.

WHAT THIS MEANS FOR YOU
If you are the scrappy underdog who is competing against a juggernaut of a competitor (who has a seemingly unending marketing budget), it’s time to steal their customers. If they run a promotion, don’t bother running a similar promotion. Instead, find a way to get into their promotion!