It may sound counterintuitive, but the best way to grow your business may be through collaboration, rather than competition.
Americans are brought up to believe that we can’t collaborate with our competitors. There are even laws against price fixing, when competitors get together to agree on pricing. Yet, in many cases, being a collaborator rather than a competitor may be key to your success.
Expanding the Pie
Competitors often treat each other as enemies, yet often, the most effective way to grow is to increase the overall size of the market, rather than trying to take market share from someone else. If you’re already the market leader, you’ll benefit the most if the size of the pie increases, but everyone benefits when the market grows.
Members of professional associations and chambers of commerce are often in direct competition with one another, yet jointly serve on committees working to educate the market or change public policies. This type of collaboration creates a bigger or better market for all. And many newer business organizations are specifically designed to encourage collaboration and joint marketing, such as the entrepreneurs roundtables and local first networks springing up all over the US, and, in my own state, the Sustainable Business Network of Massachusetts (of which I’m a board member).
Collaboration can be an effective marketing tool for all kinds of businesses. For example, the owners of The Neighborhood Farm, a collection of market gardens in and around Needham, Mass., are deeply committed to collaboration. As a new business in 2008, The Neighborhood Farm consciously chose to team up with other local growers to promote CSAs and local food, rather than trying to steal market share from other farms.
“We have a significant partnership with Powisset Farm,” Neighborhood co-owner Kate Canney says. “When we started our CSA in year two, we publicized both our CSA and theirs. We don’t care if they join our CSA or someone else’s. We just want people to support local farmers.”
The Neighborhood Farm also sells surplus for other farms and promotes other farms’ events through its eNewsletter and social media. Their collaborative approach is working for them; they’re in the enviable position of selling out of everything they grow.
Power in Numbers
By banding together, small competitors can often achieve more than trying to do business on their own. For example, Jim Buckle, a farmer who was based In Dighton, Mass., recently decided to relocate The Buckle Farm to Unity, Maine because the cost of land in Massachusetts was prohibitive. Buckle, who has spent many years in Boston, plans to aggregate produce from local Maine farms to his many wholesale and direct customers in Boston. By aggregating product, Buckle will be able to reduce his shipping costs, and the Maine farmers will gain a new market for what they grow.
Putting the “Coop” in Cooperation
Valley Green Feast is a local food CSA delivery service based in Northampton, Mass. It’s a worker owned cooperative, so when the opportunity to expand to Boston arose, they created a partnership with another worker cooperative, Boston Collective Delivery, to provide bicycle-based delivery for Valley Green’s Boston customers. Both businesses are winning from this collaboration.
Realistically, companies and organizations usually do compete for the same customers, so collaboration with direct competitors isn’t always possible. It’s often more feasible (and lucrative) to collaborate with a business or organization that serves the same target market as you, but provides a different product or service.I frequently advise clients to look for compatible businesses to partner or co-market with. For example, acupuncturists and massage therapists often share offices (and clients). Lawyers and accountants often offer cross-referrals. And high-end bakers frequently partner with upscale florists or photographers to market wedding and event packages.
Ultimately, marketplaces thrive when consumers have more than one choice. Farmers markets are far more delightful when you can compare the varieties of apples at one farmer to the apples in the next stall. And where’s the best place to site your donut shop? Across from the most popular donut shop in town!
So if you want to grow your business, look for ways to collaborate, rather than compete. Check to see if there is a local first or entrepreneurs roundtable in your community, and if there isn’t, start one!