"You should re-think what you call a competitor." That’s what Arlo Luke, CEO of Varsity Contractors of Pocatello, Idaho said at a recent Janitor University class discussion. Luke points out that one of the unique strategic opportunities available to cleaning companies is to re-define the concept of competitor. Who and what are competitors?

The discussion centered around this question. Most people broadly define a competitor as everyone in the same business. What’s your share of that pie? And how are you going to effectively compete against them?

Teaming with your competitors may be able to help your business. This idea comes from the old cliché that two heads are better than one. The concept centers around the fact that many individual customers want nationwide contracts, that local and regional companies cannot fulfill. Rather than forgo the business, or gamble with expensive start-ups in multiple locations lacking volume to sustain a business, competing companies can join together to see if they can grow each other’s company by offering national service that they couldn’t provide individually. It also means expansion is possible with less risk.

One of the prime contractors Luke has worked with is Wayne Simmonds of FBG Service Corporation of Omaha. These two competitors have worked to make each other’s companies grow.

The question you want to ask is what’s in it for you? And are you going to be giving more than you are getting? In any metropolitan area, there are numerous building service contractors. What are the criteria for seeking out a competition partner?
The first issue is trust. "It’s almost more like a marriage than business at times, so trust and fidelity are fundamental,” Luke says.

By joining forces, you may be able to complete jobs that individually you cannot manage. The combined resources of both companies may help you stand up against larger competition or competition that’s coming in from the outside. You also can pass on work that you’re not interested in, and use this opportunity to bolster the reputation of your competition partner while you’re satisfying your customer’s needs.

It’s important to remember that there are strict laws concerning competitor activity, particularly in the area of anti-trust. You must be very sensitive to any kind of conflict of interest; avoid any activities related to, or appearing to be, price fixing or collusion. Make sure you understand the laws governing unfair competition and do not cross the line.

Also, be sure to establish some ground rules with your partner, and agree on limits of information that you are willing to share.

If you start teaming with your competitor, work together to educate your customers on issues that impact the cleaning industry. Explain the concept of teaming and how it works. Also, be willing to compete with each other for accounts that are similar. It’s a concept that might provide benefits in this huge market with thousands of competitors nationwide.




POSTED ON: 7/1/2004