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Competitor Gone Out of Business: Their Loss is Your Gain?

posted on October 20, 2010


Mike Michalowicz, has an article in the small business section of today’s Wall Street Journal that talks about ways of siphoning off the clients from a competitor who has gone out of business. The concept is based on the idea that the world is full of ads that lead to dead phone numbers or defunct websites. It happens because companies don’t anticipate going out of business when they buy that phone book ad or drop 10,000 postcards with their web address from a hot air balloon. So Michalowicz says you should claim old phone numbers and web addresses and redirect them to your own active business.

In theory, this sounds like a good idea. The people who call or visit a URL are looking for a particular service, so why shouldn’t you serve them instead? And from a consumer standpoint, if I need a local plumber and my guy has retired in Palm Springs, I don’t really care if another plumber takes over the territory, I just want my sink to stop leaking.

Once I get past the theory, I’m not so sure about this plan. I can’t believe it’s that simple to buy another company’s phone number, even if they aren’t paying the bill anymore. Michalowicz does say you should be upfront about the fact that the original company is no more and you’ve taken the number, but it still feels like bait and switch to me.

When it comes to a URL, I’m more inclined to side with him. URLs and websites are bought and sold all the time. If PlumbersRUs goes down the drain, then absolutely, yes, you should buy their domain name and redirect it to your domain.

The article goes one step further, suggesting you get in on about to be canceled seminars but frankly, that just seems like a lot of work for little return.

I guess that’s what it comes down to. If you know your competitor went out of business and you can buy his phone number easily, why not. But to spend part of your day tracking down defunct companies, websites and events for the specific purpose of usurping their client base, that feels a little like a waste of time and a lot like ambulance chasing. Maybe if you spent that same amount of time improving the quality of your own advertising or product, you’d attract even more customers all on your own.


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  • http://www.michael-martinez.com/ Michael Martinez

    Picking up a failed rival’s phone number is more a service to consumers than a bait and switch. Have you ever been assigned a phone number formerly used by a business? I have. The phone companies try not to assign old business numbers to residences but it happens from time to time. You get a LOT of inconvenient phone calls at all times of the day.

    So if a business steps into the void and services that business AND keeps unwitting callings from harassing a residential phone user, that sounds like a 3-way win to me.

    • Cynthia

      That phone scenario has been the basis for many old sitcoms – a flood of calls for pizza or heaven forbid, a more adult business.

      My objection isn’t so much grabbing the phone number but the length to which the original writer suggests you go to in order to make it happen. I think some people spend more time looking for creative ways to get customers and less time making their business worthwhile for the customers they do have.

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