In the real world of business competition, do the expected marketing rules really work?

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To say the least, the last few months have been “interesting” for my business. As I noted previously, the launch of our daily construction trade newspaper, Ontario Construction News, has consumed so much energy and mental bandwidth that I haven’t maintained this blog’s former daily schedule.

The relatively new (we launched May 1) monopoly-busting business is going well, but there are so many twists and turns here — many of which I can discuss in public to only a limited extent — that my head is starting to spin.

Consider some of these oddities and contradictions:

  • I’ve long believed that effective association membership is often the best way to build relationships, connections and business development opportunities. But what do you do when associations (including one where you have long been a member) turn into your direct competitors?
  • It can be fun (and is a rare business opportunity) to bust a monopoly. But what do you do when the former monopoly describes your business in positive terms, saying you are following the rules, when it aggressively and publicly disses the second competitor (you guessed it, the one run by the associations referenced above) and we suddenly find ourselves as “frenemies” with the organization we have been knocking off the pedestal.
  • How do you deal with this problem . . . The former monopoly issues a strongly worded “threat” broadcast email to thousands of people, describing the newest competitor’s business as “non-compliant” with the rules, meaning serious potential legal risks for their customers. The competitor responds with an equally broadly distributed email slamming the former monopoly (while taking a dig at us) with a number of true and misleading assertions. If you were to believe the most misleading assertion, the former monopoly never complied with the law and every single construction project for more than three decades in Ontario didn’t close out properly.
  • Finally, where is the regulator through all of this mayhem? What is the law? Who is really right? Does it really matter?

Yes, it is head-spinning. Compared to the confusion here, the market data is visible and can be confirmed in real-time. This is because the specific legal notice advertisements under provisions of the Ontario Construction Act must be placed after most projects are completed. Since all three competitors post detailed legal notices publicly on our websites, we can see the numbers.

November and early December are peak months in this specialized business, because of the number of projects that are closed out and completed before Christmas. The slowest time is early spring, when we launched, because not too many projects conclude in April, May and June.

We started in May and didn’t have the advantage of a massive database of potential clients, though we enjoyed (and continue to benefit from) a strategic alliance with DataBid.com, which provides a competing leads and bidding service to our other two competitors.

Despite a slower start (the newest competitor launched in early October), we’ve achieved about 10 per cent market share. The new competitor has to the best of our knowledge also reached the 10 per cent share rate — much more quickly than us — leaving the former monopoly with the remaining 80 per cent.

And with our 10 per cent market share, we are right on budget and target according to our original business plan. In other words, if we didn’t have all this noise around us, we’d be very happy.

I’m not sure how the various pieces in this confusing story will play out in the months ahead. I will outline some of the lessons learned and policies we’ve followed.

  • There’s an old adage not to speak negatively about your competition in public, and we’ve followed that rule. When the former monopoly slagged the newest competitor in an inflammatory email, we received some concerned response from clients thinking the email referred to us. We clarified the point. Most significantly, we’ve since confirmed that the former monopoly thinks we are playing fair and are following the rules. Their anger is with the newest competitor.
  • Competition can teach us lessons and help us to improve our product. We’re doing just that, implementing new back-end IT systems and public-facing tools to make our service friendlier, more efficient, and provide even more public information than before to benefit our advertisers and the community-at-large.
  • It is important to be aware that rules have exceptions, and stories are more complex than they seem. I don’t really want to be competitors with trade associations we’ve long supported — but if I need to do that, I will. But even if things get messy, we’ll try to treat everyone with respect.

The months ahead, indeed, will be truly interesting.

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