Competitor Relationships – Why You Should Be Developing Them, PART TWO

By: John Erickson – CEO of Credit Service Intl. – Content Editor of R.O. Hammer Companies

In this three-part blog series, we are discussing 1) Why you should be devoting time and energy to developing competitor relationships, 2) the direct benefits of these relationships, and 3) how to develop and bring value to important competitor relationships.

In our first blog post, we discussed the origins of networking, what we can learn from our professional predecessors, and why developing competitor relationships is important. Now, let’s dive into the details of our second blog post: The direct benefits of competitor relationships.

If you are running a licensed professional services organization, especially if your industry has significant compliance challenges, the chances are that your business has lots of moving parts. (I often hear them called spinning plates). No matter how finely tuned your machine or how organized your workflows are, more moving parts mean more opportunity for issues to arise. This leads to our first benefit of competitor relationships.

Problem Solving

One of the most significant advantages of competitor relationships is the opportunity to tap into a broader pool of knowledge and experience. Problem-solving is one of the best examples. There is a pretty good chance that almost any problem, issue, or headache you are facing has been faced and solved by a competitor in your industry. Not only can gaining this experience fast-track resolutions, but from my experience, it almost certainly also leads to cost savings for problem-solving efforts, both in the form of time and money. Gaining insight into problem-solving resources, research, and solution development from someone who has been there before is invaluable. Combining diverse perspectives often leads to more effective solutions as well.

Let’s dive into more of the direct benefits of competitor relationships.

Networking & Industry Insights

Another significant benefit of building relationships with competitors is the opportunity to open doors to valuable networking opportunities and industry insights. By engaging with competitors in your field, you gain access to a wealth of knowledge about market trends, customer needs, and industry challenges. This information can help you stay ahead of the curve and make informed decisions for your business.

Vendor Referrals & References

As I mentioned in part one of this blog series, I seek the opinion of other operators nearly anytime I am looking at making a vendor change or bringing on a new vendor or service. There are significant time- and cost-saving components to this approach, and I also appreciate the value in obtaining diverse perspectives from outside of my own organization.

Vendor referrals from competitors can also help you to navigate the complexities of the regulatory landscape more effectively, and sharing vendors with competitors also helps to drive solution-oriented improvements and compliance components for vendors themselves.

Industry Advancement & Navigating Regulatory Challenges

The bottom line is that for many professional service industries, participants are facing more complex and ever-changing compliance challenges. When industry participants work together, it benefits the industry as a whole. Sharing best practices, collaborating on research and development, and promoting industry standards can lead to overall market growth and increased professionalism. This collective effort can result in a larger market for all participants.

These relationships strengthen professional industries by collectively addressing common threats and challenges. Working together to solve problems creates a more resilient ecosystem that can better withstand external pressures and adapt to changing market conditions. Pooling collective knowledge and resources to better understand and comply with regulatory changes also helps to reduce risks and improve overall compliance for the industry as a whole.

Enhancing Technological Solutions

Competitor relationships can drive innovation in professional services technology. By sharing insights and potentially co-developing new tools, organizations can create more efficient and effective tools and processes.

Collaboration and Partnerships

Competitor relationships can lead to mutually beneficial collaborations and partnerships. It’s true! There are many benefits to strategic partnerships, and oftentimes the best potential partners are your direct competitors. Many company mergers are formed this way.

With the increasing cost of compliance, as well as the rising costs associated with many professional services vendors, I expect to see many organizations exploring vertical integration of their vendors to meet their service needs. This area creates enormous opportunities for potential collaborations or partnerships in ways such as vendor acquisition and tool or software development.

What’s Next?

Be sure to check out the first installment of this blog post series to learn more about the value of competitor relationships, and also our third and final installment, where we will look at steps for building valuable competitor relationships and how to bring value to your side of the table.