How can I handle a web designer working for our competitors?
June 27, 2013 1:18 PM   Subscribe

I'd like to hire a web design and marketing company that is specialized in my industry. They provide the best product out there -- great sites, great logos, great marketing with super industry knowledge. I noticed that our #1 competitor in the local area has a website "under construction" and a new site coming soon from this same marketing company. How can I handle this situation?

There is no non-compete clause in the contract, which I have not yet signed.

Is it reasonable to ask for a non-compete agreement? I wouldn't want them to reject working our business because they are already working with our competitor, if I mention it. At the same time, I am concerned about them not working with only our two local hospitals, but expanding to the other hospitals in the area.

How can a company do the best job possible on our local marketing if they are also marketing our direct competitors?

How can I phrase this when negotiating our contract? I'd like to go with this company because they do a great job. I think they could potentially provide a distinct enough service to us and one competitor, if they have already started working with the other guys. Our competitor apparently got in the game first. However, I would be concerned about signing on and then for them to work with other local firms in the next few years.

Can anyone help me negotiate or better understand this? Thanks.
posted by htid to Work & Money (22 answers total) 2 users marked this as a favorite
How big is the company? If they're big enough, it's likely that they have many teams within the corporation, and your team would have no interaction with the other hospital's team. Design agencies care about money before anything else.
posted by sonic meat machine at 1:23 PM on June 27, 2013

There's an opportunity cost the design business loses out on by agreeing to your non-compete clause, so you must pay this difference, and it should likely be a massive multiplier (3-5 times). Otherwise, to me it seems the design company is the one with all the power in this situation - they have the skills, the market, and eager clients such as yourself wanting their services - I don't see why they would agree to not work with other local firms unless you make it worth their while.
posted by Meagan at 1:31 PM on June 27, 2013 [2 favorites]

Response by poster: The company works with about 100 hospitals of our type nationwide, though none in our local area except for this other hospital's site "under construction."

Their design team consists of two full time developers, one SEO person, a couple of copywriters, and maybe one other designer.
posted by htid at 1:31 PM on June 27, 2013

Best answer: A marketing/web design company only really cares about developing a good relationship with their clients and profiting from it. These people have no interest in your relationship with your competitors. You're hiring someone to make your business look good. That they're being hired to make your competitor look good too is neither here nor there. They know that their reputation rests on doing a consistently good job for all their clients.

Try not to think of this as 'How can I hire them to make me look better than my competitors when they're trying to make my competitors look better than me?' Try to think of it as 'These people are the best, and I need to hire them to make me look as good as my peers'.

In other words, ditch the non-compete clause. They'd be foolish to accept it if they're as good as you say. Their work won't dry up without you.
posted by pipeski at 1:45 PM on June 27, 2013 [6 favorites]

Best answer: Is this marketing company directly responsible for both of your SEO campaigns? (For you and your competitor.) Or are they just doing their website?

Are they your competitor because of size?
Or are you going to be battling for the same online/search engine keywords?

If it's the size, they may be targeting different keywords than you online. If you are concerned that they will be battling against their own SEO on this competitor website, then it may be an issue.

However I assume they would be positioning you in a way that gets you ranked and found. I also assume they will do marketing that will work specifically for your company.

Ask them for a specific marketing plan/proposal that includes the SEO/Keywords they will be applying. Ask for the proposal to contain a competitive analysis of the other competitors in the area, and be specific that you are concerned about this number one competitor in the area.

Do they have guarantees for ranking? Can you get the website and take the marketing elsewhere?

I work as an internet marketing director, applying SEO, marketing, and doing websites for people/doctors/clinics specifically in the medical field. We are a small company with guarantees for traffic and keywords. Therefore we would not take on two clients with the same speciality in the same city, simply because we would be battling against our own SEO. Their marketing plan may differ between you and this competitor.
posted by Crystalinne at 1:48 PM on June 27, 2013

If you want to hire a company that specializes in hospitals you really can't expect them to not work with other hospitals. If they are good their design concepts for you are going to be driven by what you tell them you want, and what they pull out of you during the discovery process up front before they design anything. I work in web design. We've done work for a bunch of hotels, some of whom have properties in the same cities. We've done work for a few local tourism boards that compete in the sense that if you visit city A on vacation, you didn't go city B.

I don't think you have anything to worry about. However, if you do decide to pass on them feel free to call me. I'm pretty sure we haven't worked with any hospitals in your neighborhood ;)

On preview - I agree with Crystalinne that the SEO could be an issue if they are managing keyword campaigns for direct competitors. If it's just design and development it's no big deal.
posted by COD at 1:50 PM on June 27, 2013

How can a company do the best job possible on our local marketing if they are also marketing our direct competitors?

If you feel that way, you can hire someone else, but would your marketing be improved by hiring a worse web design company? I don't see how that follows.

If they are a design company that specializes in a specific industry I think the chances that they'd agree to not work for any businesses that might compete with you would be about zero. If they can't ethically work for two competitors due to SEO reasons (like Crystalinne says) they presumably won't take you as a client in the first place, since they are already working with your competitor.
posted by phoenixy at 1:52 PM on June 27, 2013

Response by poster: To clarify:

1. The other hospital is our direct competitor for the same clients. They are two miles away, and both are small animal veterinarians. I discovered that their site was being developed by the same firm after I started negotiating with the design firm.

2. I'm concerned about SEO, yes battling against their own SEO for the same local keywords.

3. My other concern is that their websites have a very distinct style. They use a lot of the same design elements on their landing pages. The colors and logos etc are different, and the sites are obviously custom designed. But there are definite similarities across sites. I really like the style, which is why I chose the firm. I believe that they would develop sufficiently distinct websites for ourselves and the other doctor, especially if we work closely with the design firm on our distinct design. However, if they took on numerous other local vets, that distinct style that we're paying for would become generic. It's a very nice style, with large print, a certain style of stock photos in frames, similar content categories, etc.

4. I'm interested in something like a 30 mile, 3 year non-compete clause. It would be ridiculous to not ask them to work with other veterinarians, but I'd like them to not work with our direct competitors, who are competing for the same local clients in our local area within a reasonable/small radius of our hospital.
posted by htid at 2:00 PM on June 27, 2013

They already have a signed contract with your competitor, apparently... are you expecting them to break this contract if they sign your non-compete? If so, are you planning on paying them out on the contract, plus the value of any other contract that they might reasonably get in the next few years? Like Meagan said, you should expect to pay them 3-5x as much if you want them to sign your non-compete.
posted by brainmouse at 2:05 PM on June 27, 2013

Response by poster: Clarification again: I'd like to negotiate a non-compete for no ~new~ clients in our local area. Not to break their existing contracts.

And in exchange, we'd develop a relationship with them over a period of several years to do numerous aspects of our marketing. We have good relationships with vets, kennels, etc both near and far, as we've been in the business for several decades. Doing a good job on our site might increase their business even if they didn't work with our direct local competitors within a small radius.

I can see from this thread that it might be a tough negotiation, and that I'll need to make the case very positively and demonstrate the benefits to them, and consider my other options also.
posted by htid at 2:21 PM on June 27, 2013

Aren't they already working for the competition. I think this ship has already sailed. They are already working for the other hospital. I think you are too late for what you want.
posted by saradarlin at 2:23 PM on June 27, 2013

On preview. Yes you can ask for a non compete but are you prepared to pay for it? This is a huge material change to the contract so expect a corresponding increase in fees.
posted by saradarlin at 2:26 PM on June 27, 2013

And in exchange, we'd develop a relationship with them over a period of several years to do numerous aspects of our marketing.

This is amorphous negotiating fluff and would be promptly rejected by a the designer firm. They are not looking for "relationships" (which generate no money), they are looking for money. Unless the web designer firm is really hurting for work, the only thing they will listen to is "and in exchange, we'll pay you $xx,xxx per year", where $xx,xxx is at least the amount of money they receive from your company times something between 2-5 (assuming there are somewhere in the region of 2-5 possible clients in your region that are the size of your hospital). This is fundamentally a difficult negotiation to make, and you should prepare for it by monetizing the benefits to them.
posted by saeculorum at 2:33 PM on June 27, 2013 [3 favorites]

Best answer: a 30 mile, 3 year non-compete clause...

I'm not sure where you are located, but as far as SEO and internet marketing, and a local business, 30 miles is a HUGE distance. For example, I live in Sandy, UT - below Salt Lake. Within 30 miles there are probably 10 to 15 different cities. That means that someone in Sandy has basically no competition with someone in Lindon because they are 25 miles apart and a 30 minute drive.

At the same time, a business in Sandy may not compete with someone in Murray because that's a 15 minute drive, and 8 miles away.

Basically that would mean that if you were in the Salt Lake area, and asked for 30 miles, they couldn't work with a direct competitor in the almost the entire city/metro area! The SEO for someone in downtown Salt Lake is going to traget people in a specific area, and is going to be different than for someone in Draper which is 20/25 miles away.

Can you ask for it? Sure. Will you get it? Probably not.

Honestly if someone asked that of our internet marketing company, we would not do it or even consider it. The company defines their own standards for what is "too close" for competition. If you don't like how they define that then get a website and take your marketing elsewhere.
posted by Crystalinne at 2:45 PM on June 27, 2013

Best answer: Your vendor is the standard; if you want a certain level of work, they provide it. What you want is an ally (someone who fights for you against your competitors) as well as the standard; i.e., you want to monopolize the standard going forward so your competitors are uniformly in a worse position than you. Unfortunately, they, being in the standards business and all, are not set up to do that so it's not going to happen. I recommend going outside of your city to find someone who does no work in your area.
posted by michaelh at 3:27 PM on June 27, 2013

P.S. I say that as an employee of an agency that does not take competing work and the former employee of an agency that did. I'm not making up the standards and ally thing; it's really two different ways of looking at the work and the relationship. Each can be better or worse for a client depending on what the client needs to do and how much money they have to spend on it.
posted by michaelh at 3:35 PM on June 27, 2013

Will the clients you really want be choosing a vet based solely on who's first in the Google listings? Find the core truth about what's special about you, and focus on that.

Eventually, all successful vets will or should have web sites that give people the info the need and want without too many big pictures that push the content below the first screen. Give your customers what they want, not what you want.

All this is to say that I wouldn't stress too much about whether other vets will have awesome web sites. Even if you did have this company in a non-compete agreement, eventually another web developer will have a similar template and will sell to the other vets. Most vets seem to have cookie-cutter sites nowadays, with features that are irrelevant and probably expensive.

Something that looks great to you could look totally different to a customer who just wants to know your hours or your boarding policies or your philosophy as a human who takes care of animals.
posted by amtho at 6:55 PM on June 27, 2013

"I'm interested in something like a 30 mile, 3 year non-compete clause"

Whoa, no sane web firm is going to sign up for anything resembling that without a massive pay-off. 3 years is a long time, many web sites don't even stay online for that long.

Also, don't get too hung up on this one firm. It might be that they seem ideal largely because their work feels familiar to you as someone who's browsing a lot of related sites, or because you're focusing so intently on this competitor. Sometimes it pays to bring in fresh eyes, a good web firm will make the most of your expertise in your industry to help apply their skills the right way.

(In my experience, many firms that focus on one industry get very lazy & end up churning out the same stuff for everyone. Which is often perfectly competent but tends not to stand out from the crowd)
posted by malevolent at 11:08 PM on June 27, 2013

Clarification again: I'd like to negotiate a non-compete for no ~new~ clients in our local area.

No design firm is going to agree to this. No way no how. You're just one job; they have to be able to stay in business after your job is done.

Doing a good job on our site might increase their business even if they didn't work with our direct local competitors within a small radius. [...] I'll need to make the case very positively and demonstrate the benefits to them

The only way this could be true is if your budget is more than double what it needs to be. Otherwise if they have to turn down even just one single other client because of your desired noncompete, they lose.

Trying to spin it as "we've been around for a while, working for us will give them more exposure" or something is.... Well, put it this way: they're a marketing firm, you're a vet. If they need your help to market themselves then you're both in the wrong line of work.

Don't ask for this. Seriously, just don't. If you're already concerned that the style is going to be too similar to your competitor's, that's all the more reason to hire a different firm anyway.
posted by ook at 11:12 PM on June 27, 2013

I work for an agency that designs and develops sites for businesses that are direct competitors with each other--locally, regionally, and nationally.

Doing a good job on our site might increase their business even if they didn't work with our direct local competitors within a small radius.

"Might" does not equal money. Our firm does not sign non-competes like this, not even for double the original budget. There is a near zero chance this firm would agree not to take on new clients based on the promise of future work from you. A promise is not a check.

Based on your SEO fears and your noticing that the firm uses similar design elements for multiple clients, I strongly recommend you find another design firm. These people are not the only good designers. You want to look different from your competitors, not the same.
posted by ImproviseOrDie at 5:21 AM on June 28, 2013

Best answer: I do web development (programming moreso than design) on a contract basis. I've done this solo as well as part of a firm where I was a founder and sometimes I would do work for two businesses in the same market. In my experience, what they needed was often quite different even though they compete in the same market. The only thing I wouldn't do, and fortunately no one asked me, is to rebuild or repackage custom functionality from one client a new client's web site when they are direct competitors.

Someone mentioned above SEO campaign management and that is another area where you need some boundaries. In most cases there is nothing to worry about here.
posted by dgran at 8:21 AM on June 28, 2013

Since the web developers already have a contract with your competitor, making them sign a non-compete clause as part of a contract with you isn't going to happen --- basically, you're saying that as a condition of gaining YOUR business, the web developer must drop a CURRENT client.

Even if they didn't have that current contract with your competitor, requiring a company ***with a specialty in your industry*** to sign such a non-compete clause would mean they would have to greatly limit their pool of possible customers: that would risk reducing their business so much that they'd probably just refuse to accept work under such a contract.
posted by easily confused at 11:04 AM on June 28, 2013

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