Megan Totka — January 17, 2019 — January 17, 2019
Free markets and startups have always been associated with competition – often fierce competition. However, cooperation can also be an important element of success and I think current trends are making cooperation between businesses and organizations an even more powerful tool for “competitive” success.
See if any of these four cooperative strategies can work for you.
Cooperate with a charity
The sense of social responsibility is stronger with younger consumers and is influencing their buying decisions. One of the pioneers in this is online shoe retailer TOMS. As you may know, they donate a pair of shoes to needy children in developing nations with each sale. They extended that when they launched TOMS Eyewear, so they now work to restore sight to a person in need with each pair of eyeglasses sold.
Kidbox, a monthly subscription-based online children’s clothing retailer, is doing something similar by donating clothing to children in need with each box of clothing purchased.
Because price comparison is so easy today, it creates a flood of buyers to the businesses with the lowest prices. Getting caught up in that crazy competition can result in a quick trip to bankruptcy court. Not only does price competition squeeze the lifeblood out of margins, low-price shoppers are also low-loyalty shoppers. This dramatically inflates the cost of customer acquisition.
With this background, businesses need to develop attributes that create or enhance loyalty. Incredible customer service, speedy delivery, pleasant and helpful staff, convenience, and other qualities can help. I would add this sense of social responsibility to that list. If the plight of shoeless kids around the world is top-of-mind, buying from a retailer other than TOMS could be seen as taking shoes off the feet of impoverished children.
Large corporations often create their own organizations to promote social justice and the ones I’ve highlighted here are web based. Smaller or non-web-based enterprises can team up with local charities to have the same impact with concerned consumers. You can also get the added benefit of cross-promotions; it’s likely that local charities would be willing to publicize your partnership with them.
Cooperate with startup suppliers
It’s always great to have several qualified suppliers for any item used in your business. It helps assure price competitiveness among suppliers and for critical components, it helps guarantee availability. There are few things worse than being dependent on a single supplier for an item that is central to keeping the doors of your business open.
But the general cycle of any business sector always moves from the many to the few(er). In other words, you may find that while you had three qualified widget suppliers, one morning you wake up and see that Supplier X bought out Supplier Y and their new market sector strength is causing Supplier Z to pivot to a new product line, leaving you at the mercy of a single supplier.
To lessen the danger of this, be proactive in identifying and developing new suppliers. Stay alert to possible new players in the field. Having endured the pains of startup, you know how difficult those early days can be. Watch for startups who could become productive members of your supply chain and lend a helping hand.
In a recent report, market intelligence company Mercaris noted how Chipotle and General Mills were helping startup organic farmers get through the “transitional years” required before obtaining their “certified organic” rating. They agreed to pay the premium certified organic price before the rating was actually secured in order to “incentivize farmers to transition, and…lock down future, long-term organic grain supplies.”
Make 2019 a year when you take a strategic look at your supply chain, identify weaknesses, and get busy identifying the players who could provide you with added strength and assurance. Work with them to develop relationships that will benefit both companies.
Cooperate on marketing
I know a musician who provides a lot of music for wedding ceremonies. He meets wedding planners, photographers, and caterers in his area and decided to create a page on his website that delivers references to professionals in those – and other – categories.
He tracked down email addresses for a wide range of businesses and offered to list their business it they would do the same for him in turn.
That’s a simple and easy way to extend the reach of your online publicity and it costs nothing more than a little of your time. However, you can go much further than this.
For example, a local yoga studio might organize a “fitness fair” and reach out to gyms, trainers, and even local colleges and universities. The combined reach of all the participating parties would introduce the yoga studio to many more prospects than it could reach on its own.
Cooperate on offers
If you’re in a service-based industry, cooperating on offers might be one of your best strategies. There are services related to yours that you don’t offer. For example, a home cleaning service takes care of everything inside the walls of the home, but doesn’t touch the garden. Why not find a good and trusted landscape business to recommend?
After all, a family that wants to lessen their home chores and engages a home cleaning service might also want to lessen the time they spend doing routine yard care. Of course, that works both ways. The yard care service would also recommend the home cleaning service.
In my example, the referred business would offer the homeowner a special introductory rate and a small referral payment to the partnered company.
I mentioned above how the internet has made consumers super-savvy by facilitating easy price comparisons. It is also making networking and cooperation easier between businesses, so use this aspect of the web to boost your cooperative advantage.
Business & Finance Articles on Business 2 Community
(66)
