Should you partner with a competitor?
If your gut reaction was an immediate “NO!,” I can honestly say you aren’t too far off from my original thoughts on the subject.
However, I have learned it's not as straightforward of an answer as I once thought.
Why would I want to help out the competition?
If you are struggling with that immediate, and adamant, "NO" response, I challenge you to remain open for only the next 5 minutes as I share my thoughts on the benefits and challenges of partnering with competitors.
If you hang with me, I will also share some practical tips for making these "risky" partnerships succeed.
Why consider partnering with a competitor? Let’s focus on the benefits first!
Access to new markets
By pooling resources and expertise, competitors can collaborate to enter new markets or reach new customers they might not have been able to reach on their own.
When competitors work together, they can combine their knowledge and resources to create better products that meet the needs of their shared customers. This can give both companies a competitive edge in the market.
Increased brand visibility
Partnering with a competitor can help raise your brand's profile, especially if you're tackling a common challenge.
An obvious one! By sharing resources and knowledge, competitors can reduce costs and improve efficiencies. This can help both parties improve their bottom line.
For the pessimists out there, I SEE YOU!
There are absolutely things to be cautious about when pursuing this kind of relationship. I have outlined a few major ones below:
Protecting intellectual property
When you work with a rival, you need to be careful about protecting your intellectual property and proprietary information. AN MNDA IS A MUST! No ifs, ands, or buts.
Managing conflicting interests
Two competitors working together may have different interests or goals that need to be carefully balanced. To make the partnership work, it's crucial to establish clear goals and expectations upfront and communicate regularly to ensure everyone is on the same page.
Trust is essential in any partnership, not only for partnerships with competitors. However, when you're working with a competitor it's important to be transparent and honest about your intentions and goals to build trust. Sharing information and data can also help build a stronger relationship if done wisely.
So, how do you get around these issues and focus on the benefits?
Here are some practical tips to help make it a success:
Identify shared goals
Before entering into a partnership, make sure you identify what both parties hope to achieve. This will help you stay aligned and focused on what matters most. Transparency is key here!
Communication is the foundation of any successful partnership. Make sure to communicate regularly and openly to build trust and ensure everyone is on the same page.
Set clear guidelines
To avoid any potential conflicts over intellectual property, establish clear guidelines for how it will be protected and shared. This will help you avoid any misunderstandings down the road. I repeat - MNDA is a MUST!
Focus on shared value
Instead of focusing on what you can gain from the partnership, focus on creating shared value for both parties and your shared customers. This will help you build a strong foundation for the partnership and set you up for long-term success.
Partnering with a competitor may seem counterintuitive, but it can be a smart move for mutual success if you approach it with the right mindset and strategy.
By focusing on shared goals, communicating regularly, setting clear guidelines, and prioritizing shared value, you can build a successful partnership with a competitor.
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