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Ethics.. Working On A Competitors Website?


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14 replies to this topic

#1 adibranch

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Posted 26 January 2010 - 08:18 AM

not sure if this is a commone scenario smile.gif

I've been working on a site for five years, this one site gives me 20% of my monthly income now. Its the leading online supplier of its product type, and placed in position 1 for nearly all competitive terms. Its doing VERY well. I have a good relationship with the owners and they trust me to steer their site in the right direction, both in terms of visitor numbers and improving conversions.
Now, one of their competitors rang me having seen what i've done with the other site, and asked if i'd do the same for theirs.

Do i do it? what do other people do in this situation?

#2 Jill

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Posted 26 January 2010 - 08:28 AM

Since the client is still a client of yours, I'd say that you probably shouldn't.

If it was a past client, then that's another story.

This is not to say that you couldn't do it anyway, assuming you don't have an exclusive arrangement, but it's a bit of a sticky situation.

#3 adibranch

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Posted 26 January 2010 - 08:38 AM

i havent got an exlusive agreement with them, but i'm sure they'd kick off a bit if they found out that i was doing work for competitors. But then again, how would they find out? i certainly wouldnt tell them...
In all honesty i dont think i'd be able to compete with the positions or traffic of the first site, its simply too far ahead now. So, maybe there wont be much harm done overall? I think i'll mull it over a bit more..

OR, i could play it sneaky, and ask for exclusivity , for a price .. or os that being too cheeky?

#4 Randy

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Posted 26 January 2010 - 10:14 AM

It's sneaky at best. But it probably comes down to what your contract says. You do have a written contract, correct? And it does specifically address exclusivity, correct?

Because if you don't have a written contract or your written contract fails to address the exclusivity question at all you may view this failure to address it one way, while the current customer and the courts may in fact view it another. Typically the seller is going to be held to a higher standard if there is no written contract or the contract avoids dealing with such subject matter when it might rightfully be implied by a normal person.

Personally I wouldn't do it anyway. Think of this future conversation...

Client 1 invites you to a nice public watering hole for a free lunch and makes a comment about how this competitor has apparently been gaining on them the last several months. Perhaps even going to far as to wonder aloud if the competitor has hired someone new to do their SEO.

How do you then answer such a question in such a public place. Do you tell them the truth? Or do you lie. (Lies by omission are still lies.)

Sticky one right?

Now think of the same question, but this time in a court room where you've sworn to tell the truth, the whole truth and nothing but the truth.

Right now you're assuming the two competitors have never and will never cross paths. That's dangerous. Especially dangerous since prospective client 2 has already somehow found out who is working on his competitor's site.

#5 SEOreports

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Posted 26 January 2010 - 12:09 PM

I would stick with your existing client and NOT take on their competitor. You could use this as leverage to get more money in your future contract negotiations.

Being loyal to your existing clients should be very important to you. You would not want your client to fire you and then say bad things about you, because they feel betrayed and they are angry.


Steve

#6 adibranch

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Posted 26 January 2010 - 12:21 PM

hmm you may all be right i guess.
Randy, no contracts, i'm still very much a small business working with small-medium companies, mainly through referrals, so no contracts have yet been needed. I think i'll have to start looking into this more though, but in all honesty i wouldnt know where to start.

I've been working with client 1 for nearly five years, i did the original website intitially and they've stuck with me, so they've been just as loyal to me as i have to them. Perhaps the best bet is to use the current situation as a negotiating point in the future, as i am thinking of restucturing and repricing their service anyway.

Thanks for the replies all.



#7 Randy

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Posted 26 January 2010 - 02:55 PM

The no contract part is what would worry me adibranch. Depends a bit upon where you're at in the world, but as a very general rule courts tend to view contracts (verbal or written) as a Meeting Of The Minds.

So if the client thinks they have any sort of exclusivity and you think they don't, but that's never been expressly agreed to by both parties, it could go either way. There is no Meeting Of The Minds on at least this one issue. And in a court at least the one being paid usually comes out the loser in these sorts of situations, assuming the clients' reasoning is sensible.

I can tell you that back in the day when I used to do this stuff for others I used to have a Non-Disclosure Agreement and Non-Compete Clause --for 1 year from the end of the contract initially and they could make it two by staying on for 18 months-- in my written contract. But there was also a penalty clause, it being basically that if they didn't fulfill their end of the contract by cutting it short or not paying on time those two things went away immediately.

Did I charge them extra for this NDA/NCC? Not specifically, no. But I wasn't cheap either, so in a way I guess I probably was. My thing was more to approach it as if we were essentially partners in their business while they were a client. So I wasn't going to do anything to jeopardize the partnership.

#8 seoracecar

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Posted 26 January 2010 - 04:32 PM

I used to work for an agency and we dealt with many clients from our geographical area. We would hold seminars in our office and invite the public. I remember one time that we had to remove, from the lobby, the printed case study of a particular client when one of their biggest competitors was coming to a seminar. We also removed a slide or two in the powerpoint that referenced our work with them. We never lead anybody to believe they had an exclusive relationship with us, and never felt obligated to provide exclusivity, we just didn't want this to be an issue during our seminar. It never did turn out to be a problem. I'm not saying right or wrong, I'm just saying what my experience was.


#9 adibranch

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Posted 27 January 2010 - 05:29 AM

interesting, thanks racecar.

Randy, I know i have to get the contracts sorted. I'm a naive business partner in a very small company that mainly does office support work, and although i work seperately on web projects i essentially work under the company name. Most business practices are new to me and its something which i know i need to brush up on.
As regards NDA's, i may have to start using these. I recently had to sign one before i took on a new client (who was contracting out the work i was going to do to another company) before they released the details to me. In all honesty this was my first encounter with NDA's.

I'll look into it.. thanks for the advice.

#10 Randy

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Posted 27 January 2010 - 10:49 AM

If it'll help any, and it sounds like it probably will, Ian has made a couple of sample contracts available. They're here. I don't believe either has NDA/Non-Compete language in them, but they're still very good starting points and will serve to protect both parties a good deal. Adding NDA/NCC language would be simple to do if you chose to go that route.

#11 tcolling

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Posted 27 January 2010 - 08:50 PM

I'm probably pretty much like a typical client (I own a small business and I try to do some SEO work on our site... guided most recently by EXCELLENT advice by Jill - Her review service package is a screaming bargain, very valuable).

With that said: if you were doing work for me and then began doing the same work for a direct competitor, I would be very dissatisfied and I would not be willing to continue working with you. "Direct competitor" for my service company would be another company in our local geographical area. If I were a software publisher, "direct competitor" would probably have different "boundaries" than just geographical.

Case in point:

We recently signed a consulting company to provide advisory services to our company. I specifically did not use another company that I know of, because they are already advising one of our (very skilled) local competitors. I know the owners of both of the consulting firms, and they are both very competent and "nice" people too.

It just didn't make sense to me that the one that was already working with my competitor could serve both companies, at the same time, to the utmost of their ability.

Just my opinion. I hope it is useful.

- Tim

#12 harpsound

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Posted 27 January 2010 - 11:29 PM

Be transparent
Go to your client and tell them their competitor approached you.
Tell them that you turned the competitor down in favour of maintaining your relationship with them your established client.

You will get kudos and trust from your client
This will turn into money at some further point.
Ask if you can use them as a reference outside their industry.
Get them engaged and on your side.

There are no secrets on the web.
Your client will hear one day.
Who do you want them to hear from? manage this situation now.

As for the second newcomer - avoid them like the plague - they have no scruples or principles.
They do not care if they put you in conflict of interest.
They will squeeze you if you work on the side secretly.
And they will abandon you like a magpie for another piece of shinier tinsel at any time - and then they will talk.

Always go for the trust, transparency and win/win.
In the 3 way you will ultimately be the loser.

We encounter potential clients like these a lot.
They do not care if you lose.
They dangle money as bait.
But they want a very large pound of flesh in the end greater than what they pay.
AND we do not enjoy the relationship at all so can hardly wait to drop them as they can never be satisfied.

Once you get a smell for this kind of client you learn to overquote by large numbers.
Then they will not pass you on to their buddies.
These fish travel in shoals.
I call them bottom-feeders.

S

Edited by harpsound, 27 January 2010 - 11:37 PM.


#13 tyggis

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Posted 28 January 2010 - 05:04 PM

20% of your income from one client is quite good. Would you risk it for what is maybe a short term relationship? Contracts will not help you for long if the relationship to your old client is destroyed.
That said I dont see anything wrong working for both as long as you do your best for both of them. As long as you are not biased by your five year relationship its fine.

#14 scouseflip

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Posted 28 January 2010 - 05:10 PM

personally I would ask the existing client if they would object as a starting point - if they do, you have to decide which is the better option for you, but if you have already reached a point where the guy trusts you, respects your abilities and is likely to stick with you as a long term relationship... well I would not want to rock the boat personally - it takes a lot of work to get to that point with any client!

If you accept your clients position, agree to exclusivity and stick to that, then you will most likely only go up in his estimations - and as has been mentioned adding exclusivity to the agreement would be a perfectly valid argument for negotiating the fee you charge.

I totally agree with harpsound in that transparency is a safer option - I have no idea how big an industry your client is in, but people talk; there may be shared suppliers (something that has produced some interesting situations for me in the past, fortunately not as the conflicted party!), people change companies within the same industry etc etc etc. Not worth the risk and it can put you in a really bad light if/when you get caught out.

Do the right thing, not even only for the moral high ground - not getting your fingers burnt (and at 20% of your income that would be more like 3rd degree than a mere scalding) is reason enough for me

#15 Cappymoo

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Posted 11 April 2010 - 07:46 AM

I'm new to the forums and fairly to SEO at that, but since this is a burning question I'll chime in. As a small business owner with a limited base of clients available, I'm not entirely in agreement with the general view mentioned here. I certainly understand the challenge, and can also see the clients point of view, but there is enough space for more than 1 on the main page.

In my way of thinking, I would say that there is only so much we as SEO 'guidance' companies can do to generate great positioning of our charges. Where we leave off, they must pick up unless they are completely farming out the effort...including their content writing (not editing) and SMM efforts. When two clients share the same space, and you help them 80% of the way, then those clients 20% continued effort will ultimately determine the totality of success. If you optimize and set them on the path, but the fail to manage it long term by providing ongoing linkable copy and SMM, then it's really not your fault they fell to a competitor.

Regardless of success or failure on behalf of both companies, it's likely that one will find fault in your efforts even if they have the shortcomings internally. Of course this would also apply if you were not providing services for the other company but they were still ranked higher than the one you did support.

I don't know that my view is valuable overall, but if I passed up the people requesting SEO or Website Development in my area due to competitive issues, I believe I would be causing my own company grief (and perhaps them as well since they would invest their efforts into unknown SEO companies).

My 2 cents.




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