Friends and foes: it sounds crazy, but your toughest competitor can be your greatest ally when you're vying for a sale.(Tactics)

IF YOU'RE TEMPTED TO VIEW YOUR closest competitors as "the enemy," take a second look. In today's highly competitive marketing environment, quality competitors can be an asset to your company. They are the businesses that stand behind their products and services, charge a fair price and enhance the reputation of your industry. Yes, they can help you reduce marketing costs, spur innovation and lead to new marketing opportunities. Here's how your company can get a leg up:

Reduce Marketing Costs

The best thing about having active competitors is that they can lower your marketing costs by shortening the learning curve for your prospects. When an innovative product or service is introduced--say, the first fax machine--customers go through an information-gathering period before making a purchase. By the time a second company markets a similar device, customers have passed through the educational period, shortening the sales cycle and reducing marketing costs, putting you in a better position to win them over by offering additional value.

That is why having high-quality competition is an asset. Inferior competition can be a problem if you're the lone high-priced provider surrounded by companies with lower prices. In that case, competition based on price will remain a big issue for your company. But among quality competitors, the most effective tactic is to market based on a value proposition, not a price-cutting strategy. That way, you preserve your ...