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I'm one of the directors of multiple digital marketing and creative design/development agencies in the UK. This doesn't happen particularly frequently but this week, I found myself in this scenario.

We have one existing client which are a local business to us. They sell a type of product which they design and manufacturer themselves. We designed, developed and branded their responsive eCommerce website and currently host it.

Let's call them client X (x for existing).

This week, we received a referral within the SEO industry and another eCommerce business selling the same type of product but not exactly the same because client X design and make their own. This business is ready to start work with us, has a starting monthly retainer budget and wants to proceed asap.

Let's call them client N (n for new).

The only revenue we currently generate from client X is monthly hosting and perhaps the very infrequent off job here and there on their website. They do however want to start doing some marketing/SEO at some point soon (no idea when this may be though).

Client N however is ready to start working with us immediately and has a budget at the ready. If we were to begin working with client N, there would, at present, be no conflict of interest as client N would want great visibility for their products on the web whereas client X don't currently hire us for this particular service however if they were to start this up in a few weeks, then conflict of interest becomes very likely and we'd find ourselves with two clients that want to be found on the web for the same products and would essentially be competitors.

Originally, I was going to instruct our team to turn down the new enquiry explaining that we already have a client in the same niche and wouldn't be able to work with them as well but I'm now thinking why shouldn't we take them on as a new client - as it stands, our existing client don't pay us for marketing their business - but we did play a huge role in their online presence, brand and business growth.

Is it a conflict of interest to take on multiple clients in the same niche?

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Have you considered asking X? When I feel like there might be conflict I ask the existing client. Sometimes they say sure, sometimes they say they don't want their competition to have the amazing advantages we bring, always they're happy I asked and generally I am too. –  Kate Gregory Jun 20 at 13:12
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The first thing I did was openly advise client X that we had what would likely prove to be a competitor approach us wanting to hire us for digital marketing. They didn't really have much comment on whether they'd be happy for us to work with client N as well as them though. –  zigojacko Jun 20 at 13:41
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You turn down work from N and then next week X quits. Now you're out two opportunities. –  Mathew Foscarini Jun 20 at 17:40
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@zigojacko always good to have a stable client, but never get too comfortable. –  Mathew Foscarini Jun 23 at 12:29

3 Answers 3

up vote 13 down vote accepted

All of our clients are in the same niche. The main thing to do is to meet their concerns that their proprietary information will not get shared with other companies. We have done this through written assurance, through having separate teams, through database design (and sometimes through the separation of data onto different servers), through our security and qa policies, though signed non-disclosure agreements (especially when we are aware of certain new things coming into the market) and once even through creating a separate subsidiary company in a separate building with separate equipment (this was for a very large client).

I would suggest that you think of how you will keep the information separate and propose this to both the clients in writing. Then ask them what additional actions you might need to take for them to feel comfortable with the situation. In pricing your work, make sure that you consider the need to silo information may cost more. When we have had clients who insisted on on separate data servers for instance, they had to pay for the additional equipment. I would consider coming up with a plan, then discussing with your current client before you accept the next one. Once you know what their concerns are and have been able to meet them, you are better prepared with what to propose to the other and if the current client will not accept the idea, then you know you have to evaluate which one will bring in more business and let the other go. But by being proactive in bringing up the subject, you will likely alleviate some of the concerns.

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Keeping the information separate isn't an issue. It's just when both clients want to be ranked for the same keyword in Google (say for example), we'd only be able to rank one of them at #1 of course. Thanks for your answer, it contains some useful points. –  zigojacko Jun 20 at 14:00
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By keeping the teams separate, both would work towards getting their client ranked number 1. Of course since their other competitors are also doing the same thing, I would suspect that no guarantees can be made about this. Could be a third company gets ranked number 1. –  HLGEM Jun 20 at 14:08
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@HLGEM I actually feel your comment about different teams vs competitors is a point more vital than any of the ones in the answer. –  corsiKa Jun 20 at 14:48

I used to run the IT Security Practice of a high tech marketing consulting firm. One strategic marketing analysis that we did for a client firewall manufacturer somehow found its way to the Internet - no, we were not the source of the leak - and fell into the hands of a competitor. Competitor was so impressed that they scheduled an immediate interview with us for us to do the same work for them and of course, the first thing that came up was how we planned to manage the relationship with both the current client and the prospective client i.e. the competitor.

We told the competitor that we would assign a different team to work for the competitor and that we would create a Chinese wall between the teams to make sure that all confidentiality would be maintained and that each team would be 100% dedicated to their client's success. The competitor's concern was met.

Since we were not a big outfit, I was planning to split my team in half, draw resources from other Practice Areas within the firm for each team, and place the arrangement under the supervision of the CTO - I recused myself from the supervisory role because I wanted to take sides :)

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Like other answers indicated, you can have two isolated teams working on both projects simultaneously.

With the service you are providing, it is very easy to see which company is in the lead. The company that falls behind, is going to blame this failure on the fact that the team you assigned to them is not as good as the other team. Or worse, they could accuse you of taking sides. Maybe the other company is paying you more? Maybe they will request a discount in their fees.

What is going to be your response? You may want to address this ahead of time and in some type of contract explain you are going to make the best effort, but the competitor could be ahead at some point. Odds are they won't be in a tie.

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@VietnhiPhuvan - Good luck with that. May all your clients be rational. So what if you lose their business. –  JeffO Jun 20 at 18:24
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@JeffO Is that the end of the world? Yes, Irrational clients are worth their weight in gold - the gold they cost my employer in terms of time, energy and aggravation. You can have those. –  Vietnhi Phuvan Jun 20 at 18:42

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