Is Your Product Viewed as a Commodity? – Part 1

Let’s first define the term for our purposes: A commodity is a good or service that has demand, but there is little to no difference across competitors’ offerings. Basically, I could buy Widget A or Widget B, from different companies and tell little to no difference in the product.  In just about every case, my decision on why to buy Widget A over Widget B is based on something other than the widget itself.

Is your product a commodity?  If so, are there times when you wish it wasn’t?  If it isn’t, do you sometime yearn for a situation where your product or service could be viewed as a commodity?

As a sales tactic, commoditization (or the inverse) can be a factor that helps close your deal.  This week I want to focus on situations where your product or service isn’t viewed as a commodity, and how helping the customer see your product as such can help you shore up the deal.  Here are a few situations where helping the customer to view your product as a commodity can help:

Customers that say, “You get what you pay for, and you’re less expensive than <Vendor A>”
In many cases, these types of customers are focusing too much on the product or service itself, and not other points that may be important to their business, or the execution of delivery of the product or service.  Helping them to see that your product or service is similar to what your competitors are offering can help them understand why your product or service is less expensive, and how that can affect their wants and needs.

Customers that say, “Your product/service is much more expensive than what I currently use”
This is the exact opposite of above.  If you’ve shown the customer the Benefits of your Features and Advantages, they are still focused on pricing, and they aren’t answering your questions well enough to figure out why they are so price sensitive, you’ll need to try a different tactic: Shift your focus to commoditizing your product/service in their eyes.  By doing so, you can get them look at other areas of what your company provides because they agree that your base product and/or service is equal.  You can then use those other areas as features and advantages of doing business with you to support their benefits which help them justify the increased cost.

Customers think their current vendor is the best provider or manufacturer
In these situations commoditizing your product/service can take a customer focused only on the quality of the good/service itself as the determining factor of “best,” and get them to look at a bigger picture by agreeing that your product/service is similar to their current provider.  This situation often necessitates a very technical and data intensive discussion to get them to see that Brand X is no better than your product/service.  If you can get them to view your good or service as a commodity, you can then help them see what other benefits you and your company can supply independent of the product or service itself.  In the end, you’re out-selling your competitor more on the merits of what you and your company can help them do versus just selling your good or service.

By commoditizing your product or service you can move the customer’s focus away from the direct product/service details or price, and onto the bigger picture of helping them grow their business.  Anyone can learn how to apply the features and advantages of their products to create an individual benefit for their client.  It takes a skilled salesman to commoditize their product or service in order to ensure their customers are focus on the big picture benefits that you can deliver rather than on prioritizing some other specific detail or factor (including pricing), higher than those benefits.

Have you ever had the occasion to commoditize your product?  What was the situation and how did you do it?