Cultivating Mutually Beneficial Relationships with Competitors

There are so many benefits to being in a friendly, mutually beneficial relationship with your competitors, but there are some competitors who prefer to go it alone. Some rental companies seem to even enjoy being difficult to work with. 

Some of the benefits of establishing a friendly, mutually beneficial relationship include: group buying to get quantity discounts as well as reduced shipping charges from suppliers; re-renting (sub-renting) equipment opportunities; sharing of some information regarding dishonest customers; combining training session opportunities; and sharing ways to alleviate common problems.

If you believe developing a mutually beneficial relationship with competitors would be worth the risk and effort, here are a few things to consider:

• Make an effort to reach out. Perhaps one or more of your competitors have been considering reaching out to you to start a mutually beneficial relationship with your company. Why not make the first move.

• Consider hosting a seminar for your local competitors. I have presented seminars like this and it does help to begin the relationship building process.

• Create a united front on a political cause. Perhaps a common goal dealing with a local regulation or candidate would bring you together.

• Remember to stay positive and never say anything negative about your competitors. Certainly, rental business owners and operators will have their own ways of conducting their businesses, so don’t expect that they are cut from the same cloth as you.

• Keep in mind there are laws that regulate what can be done or discussed with competitors. Be certain to avoid crossing the line leading into anti-trust problems. It's wise to to discuss this with your attorney to be certain.

• Be aware of the pitfalls and avoid actions that could doom the relationship. For example, there should be no “stealing” employees from your friendly competitor. With the increasingly challenging nature of retaining employees, this would definitely put a strain on the relationship. Discuss these pitfalls (as well as opportunities) with your management team members to ensure they understand.  

• Set some ground rules with competitors to avoid some of the most likely pitfalls that could jeopardize the relationship.

• Remember, you are still competitors and you are competing for the same customers. Sometimes you will get the business and other times, your competition will get the business. Sending customers to competitors for equipment that you don’t stock, for example, helps customers as well as your reputation for being a great resource to your customers. In that case, customers are more likely to remember your company the next time that they have a rental need.

Remember, not all competitors desire a mutually beneficial relationship. Some rental business owners view competition as a war and competitors are considered the enemy. If the view is that a competitor is attempting to steal your customers and take food off your dinner table, then doing anything that could even remotely benefit the competitor will likely not even be considered.

Complicating any effort to work more closely with a competitor can be something that has happened or been said in the past that soured the relationship – perhaps permanently. In that scenario, it's understandable that some of you might have no interest in initiating a relationship with a competitor, however, it's a shame if the level of trust is not high enough for some competitors to attempt to repair a damaged relationship.

After all of my years working in the rental industry, I have found the vast majority of rental business owners and operators to be friendly, caring and just plain nice folks. Most are open to the concept of a mutually beneficial relationship. Certainly, attempting to cultivate a network of friendly competitors can be a wise move for all businesses involved.