Is there any more effective advertising and marketing methods than to get your competition to refer business to you? Of course not. It's innovative. It's free advertising. It's Guerrilla Marketing. Jay Conrad Levinson would be impressed.

But is this possible? Will a competitor, in any case, refer business to you? A competitor would, in certain situations.

The best way to show this is with an example.

A few years back I was an insurance broker working for a brokerage that specialized in providing auto insurance for "high risk" drivers; that is, a driver that has had trouble with traffic violations, convictions, accidents, or insurance cancellations. This is a market segment that the majority of insurance brokers, at least 90 percent of them, don’t want to insure. There is a stigma about bad drivers. They are considered bad clients. Most insurance brokers were dying to come up with an excuse to get rid of these types of clients.

Another firm's "bad client" was our firm's "great client." It is what we specialized in. So, the owner of our insurance brokerage sent out a letter introducing ourselves and what we do to 500 other brokerages in the Toronto area (we were a Toronto-based brokerage). The letter stated that we would take on any of the "bad drivers" or "bad risks" that any particular insurance brokerage did not want to take on. The letter gave contact names and phone numbers of the insurance brokers in our firm.

The letter was a huge success. It was a bigger success than you can imagine. Other insurance brokers were relieved to have a place to refer "bad business" to (it was not bad business to us). It was so much easier for them to give these types of clients a referral than to try to avoid them. And, you know why else it was a huge success? It was virtually free advertising. The cost was a few dollars for 500 sheets of paper, envelopes, and stamps. A series of radio, television, internet, and yellow pages ads would not have come close to the effectiveness that this small mailing campaign generated. It was like we instantly had a sales force of 500 brokerages generating new business for us.