Co-opetition might just be one of the most important concepts of this millennium, although many will argue it’s all about artificial intelligence.
But setting the potential and unknowns of AI aside for a moment, let's explore the idea of growing your business through a series of partnerships that expand your reach and vastly improve your ability to serve your customers.
According to Investopedia, the idea of co-opetition originated in game theory, where competitors seek to create strategies with competitors to improve their chances.
Investopedia explains the approach in business as such: “The model is initially drafted using a diamond shape, with customers, suppliers, competitors, and complementors in each corner. The aim of coopetition, and the model itself, is to move the market from a zero-sum game, where a single winner takes all, to an environment in which the end result benefits the whole and makes everyone more profitable.”
In the real estate industry, where so many partners are dependent on each other for a host of services, the title insurance industry – more than most – seems perfectly positioned to exploit the growth of technology and AI by crafting well-thought-out relationships with competitors through coopetition.
There are many benefits to be gleaned in a co-opetition arrangement, but let’s consider some key advantages in the title insurance industry, including shared resources, competitor alliances, and complementary skills and knowledge.
Shared resources
Sharing resources can be a natural and easily achievable cost-cutting venture between competitors in the title industry. One simple example is sharing closing room space. If each competitor operates five closing rooms across their market area, they can easily double their access to a wider range of communities by partnering with a competitor who also operates five closing rooms. Marketing and advertising resources can also be shared if the two competitors offer diverse services where the two are not going directly head-to-head in the marketplace.
Competitors can form alliances that help them gain a competitive edge against larger players in the market or allow them to share resources. Florida Agency Network (FAN) is a conglomerate of independent title agencies that share back-office services, pooled resources, access to technology, and the ability to offer their clients greater geographic coverage throughout Florida.
Partnering with agencies that offer a particular skill set is a natural fit for the title insurance industry. For instance, an agency focusing on residential services can partner with another focusing on commercial transactions or apartment or condo developments to strengthen its brand in the marketplace.
Not to be too pie-in-the-sky, there are potential drawbacks to partnering, including conflicts when setting strategies or between each partner's mission or value system. There is also the potential for sharing too much information with a competitor that poses a risk for the future, for instance, access to customer information or trade secrets that may be exploited by your competitor in the future.
Because of the risks, partnering with competitors requires serious due diligence, thoughtful planning, and a commitment to navigating the challenges. But the benefits can be huge.
Stay tuned for part 2 on partnering with competitors, where we examine various models and options for creating a variety of strong partnerships in the title insurance industry.
As you begin crafting your coopetition plan, we can provide enhanced tools and resources to you and your chosen partners to help you meet your shared aspirations. Contact us today to learn how we can help you optimize your agency with back-office support, improved technology and sophisticated transaction solutions.
Please fill out form below