Don’t Put Your Business into the Commodity Box

January 25th, 2010

The most common issue business owners have been expressing to me is that their business is becoming a commodity. When salespeople make it all about a low price to separate your business from your competition, they are making your company’s product or service a commodity. When your salespeople start selling this way they put your business inside what I like to call the commodity box. From inside the box you are not competing on quality, service or the key indicator that separates you from your competitor. Instead you find yourself competing on price which puts the prospect in control and makes you look like everyone else!

There are two main reasons dragging businesses into the commodity box.  The first one is your salespeople may be in a scarcity mindset, meaning they feel like they must win every opportunity no matter what since there are not a lot of potential jobs out there. In this mindset they will chase any prospect and do what ever it takes to get the prospects business. Your sales people might even start the sales call off with “I can save you money” which automatically, your business has become commoditized and the two areas that you as a business owner have worked hardest on in building your brand, your quality and service, is now measured in how much money your sales people can save your prospects.

The second main reason is due to your salespeople not differentiating themselves from the competition. Because of this your prospect has a difficult time understanding what is truly different when it comes to quality and service (since everyone says they have great quality and service) which makes price a logical and easy way to develop a decision. This puts the prospect in complete control and now you and your competition are negotiating price and driving down your already thin bottom line.

Selling this way causes the business to suffer. Its quality and service that the business was built on is questioned. Prospects will now know that your price is negotiable and can work your salespeople. Your business is grouped with everyone else and your ability to stand out among the crowd is lost.

There are four key components to help keep your business from becoming a commodity.

1. Have an abundance mentality, not a scarcity mentality.  Act as if your pipeline was jammed full, I will guarantee you will be selling different.  Truly understand who your ideal prospect is and look for them.  No need to waste time with prospects that don’t meet your standards, focus on prospects you can truly help and they will compensate you accordingly for it.

2.Don’t jump off the starting line immediately talking about price.  If you set this expectation early the prospect will use this as a key factor in their decision.  Help set the stage you may not be the cheapest person out there and help them discover why they would be willing to pay more.

3.Dig deep and get to the true compelling reason why the prospect wants your service. Once you help a prospect realize why they need you and why they truly want to fix their problem you will be seen as an advisor instead of a vendor.

4.The last and most important is to ask good hard hitting questions. One of Sandler’s cardinal rules is; “You build more credibility by the questions you ask versus the statements you make.” The easiest way to quickly build credibility is by asking questions your prospect does not hear from your competition.

Don’t allow your salespeople and your prospects to put your business in the commodity box. Your business was built on the quality and service that has gotten it to where it is now. Don’t stoop down to the level of playing the price game.  If you do you will find your margins becoming thinner, profits decreasing and your perceived value from prospects diminishing.  If you are seen as a vendor, you will be treated like a commodity. If you take an abundance mentality, set the stage that you might not be the cheapest, find the compelling reason why the prospect wants your help, and ask questions to build your credibility, you will be seen as an advisor to your prospect and be treated like a partner.

Aaron Prickel

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Aaron’s information and techniques on sales for professional services will improve the success rate of our participants. He captured their attention and delivered in a way that they could easily understand and immediately use. I would recommend his training to anyone who needs to gain new clients and keep the ones they have.

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