Is my timing good or what? NYC got hit with a major snow storm today. I left 24 hours ago.
Have you ever wondered why a business opens up in the center of lots of direct competition. Are they crazy or smart? I think they are smart if they play their cards right. Brick and mortar ventures understand that physically locating your business surrounded by like businesses has many advantages – it makes it easy for customers to find your category (restaurants, art galleries etc.) and they can easily stumble upon you, you can jointly promote the area with a common theme of offerings and you can network and refer business to each other.
That’s what I experienced in NYC last week. I was in the market for a new coat. I had two old ones that I enjoyed for years, but was ready to trade up. I headed to 29th and Broadway, the fur district in the city. I started with the place I purchased the older coats, since I had done business with them in the past. They suggested I go to Madison Avenue Furs, sell my old coats and then come back and shop. Apparently, this shop they were referring was known for paying a fair price for coats. I headed to the cash opportunity store, stopped in four other stores to do a little more research and see if they would give me any thing for my old coats. Two of them also suggested selling my old ones and coming back. It was really cold and windy in New York and I was ready to get a warmer, new coat and couldn’t find the place that everyone was speaking about. Yikes, so I popped back in one of the stores and asked for more directions. They were so nice and walked me down to the store; knowing that they could potentially lose a sale to this store they were taking me to.
I entered the store and was greeted by a friendly sales associate. I explained what I was looking to do. She said no problem. I needed to see the owner and in the mean time, was I interest their collection? I said “sure”. She showed me all kinds, price points and different styles. I never felt pressure to select one or did I feel intimidated, which I have felt when I was making a purchase of this magnitude in the past.
Larry the owner of the store came over and introduced himself. He toured me through the store explaining that he was a third generation furrier. Most of the merchants in this cluster of retailers were all family businesses that have been around for decades. Again, no pressure from Larry, he was knowledgeable and helpful. After finding a coat that I really loved, Larry gave me the options, the amount of straight cash I could get and go, and what the trade in amount was that he would take off the coat that I liked. I thought about it, consulted with my shopping buddy, Jill and decided to take the money off and buy the coat from Larry’s store.
After a morning of shopping, Larry had a new customer. Why? I really loved the coat, I trusted him, we had chemistry, I related to him as he was my age, not my grandfather’s, I believed the price was fair for the purchase and I was buying what I wanted and was not being hard sold.
So how can this swarm of competition theory work for your business?
1) Be confident in your business and embrace an attitude that there is plenty of business for all.
2) Develop relationship with your competitors, let them know of any special services or products that you offer that can help them look good in the eyes of their customers.
3) When you can’t help a customer, send them the referral to your network of competitors.
This concept is not limited to retail or brick and mortar businesses. If you have an online business and write a blog, compliment your competition, share links and even consider bundling an offer with some of your competition. And if you have a strong feeling of trust with one of your competitors explore a joint venture opportunity. I realize this will not work for every business model, but it will for many.
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