Every Business is a Commodity Business

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Time to face the facts. Given nothing to prove them wrong, here’s what your prospect believes. One business is just like another. Any accountant can complete my tax return. Any electrician can install a ceiling fan. Any restaurant can fill me up.

Now, I didn’t say it was true, in fact, you know it’s not true, but there you sit doing nothing about it.

If you can’t find a way to differentiate your business from every other business that says it does what you do. And, if you can’t communicate that difference in a way that really matters to a narrow target market, then you’re basically in the commodity business. If I can’t tell how one business is different than another then I will use the only thing I can measure – price. Yes, the driving force in the commodity business is always price.

In case you haven’t discovered this yet, price is a crappy place to compete. I assure you that there is someone out there willing to go out of business faster than you.

So how do you get out of the commodity business?

Find something that separates you from your competition, become it and speak it to everyone you meet. Quality isn’t it, good service isn’t it, fair pricing – not it. These are all expectations. A difference is in the way you do business, the way you package your product, the way you sell your service, the fact that you send cookies to your clients, the fact that you show people how to transform their lives – it’s in the experience you provide.

I have an exercise for you. I want you to answer this question: “What do you do for a living?” The trick though is that I don’t want to hear what your title or profession is, I want to hear how what you do for a living is going help me get what I want.

Most small business is done face to face or over the phone. So, when you can come up with a statement that makes me beg to know more about what you do for a living…then you will climb out of the commodity business and into the premium business (As in, you can charge a premium for your services.)

Here’s a simple formula that will help you with your answer to the “What do you do” question.

“What Do You Do For A Living?” I (Verb) + (Target Market) +(Something that matters to the target)

I teach small business owners how to triple what they make(marketing coach), I show women owned businesses how to grab a huge share of federal grant money(consultant), I ease the fears of expecting parents(financial planner), I create financial rescue plans for the financially stranded(credit counselor), I bring comfort to the hot and sweaty(heating and cooling company) I show contractors how to get free from their business (attorney).

Do you get the idea here? Making a statement like this forces you out of the commodity business and immediately begins to communicate how you are unique. You know, I’m thinking maybe short on pork bellies today.


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  1. Perception Is Everything! Boy do I feel like I’m having a discussion with myself!

    Funny, I’ve got a thread going right now on my site about great customer service, …my previous post to this one I trackbacked… and my PERCEPTION about my recent purchase is so high now, based on the EXPERIENCE I went through, that I really wonder if the product I bought really matters anymore!

    Say BillD, I’d like a copy of that Special Report, this topic is very interesting to me… …but you don’t have a link to your name… …do you have a site?

  2. John, as usual, “well put”.

    It bugs me that I read your posts and think, “When did John read my stuff?”. Seriously, the synchronicity of aligned thinking is both gratifying and eerily strange.

    But let me add something I didn’t read in your great post. While your ‘simple formula’ for expressing what I do (for) someone is ‘right on’, it doesn’t mean I’m going to be truly better than my competitors at doing it. Sure, I may be better at communicating my raison d’etre — as my prospect defines it, but my ‘experience’ may not be all that different or better than what my competitiors are offering.

    Of course, there IS a way to stand out effectively. Manage the customer’s EXPERIENCE.

    How? By managing our behaviors, we create IMPRESSIONS that our prospects use to form a PERCEPTION about us / our business. And since their perception becomes their REALITY (subjective is still real, no?) about us, their reality encourages an appropriate BEHAVIOR from them — they’ll PREFER and BUY FROM us over other less ‘distinctive’ firms.

    The ‘commodity’ status is, as you point out, a deadly place to be in any business.

    So in addition to learning to state why we’re different . . . we must also learn to practice and ‘manage’ our prospects and clients experiences with us so they come away from every contact believing that, because of all the experiences we create, “All things being equal . . . this firm’s not just equal . . . it’s BETTER!”

    I have a Special Report on this very topic if you or anyone is interested in seeing the ‘details’ of how to effect this strategy.

    Keep up the great postings!

  3. Really one of the creative thinking and this is very nice ideas,its one of the effective post,nice presentation I like this a lot.Thanks for the nice one.Keep up blogging.!

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