By Tom Reilly, author of Value-Added Selling
A commodity is a product differentiated only by its price. If the only thing that differentiates you from the competition is price, you have more than a pricing problem. You have a failure-to-differentiate problem.
Buyers commoditize when they value-strip. This means they peel away the layers of value that make your solution special, unique. This strategy reduces a product to its naked, core-commodity status. For price shoppers, this simplifies the decision process. They believe that if all else is equal, price is all that matters.
Your strategy is to not let them value-strip. There are two things you can do to change this conversation. First, enlarge the discussion beyond core-commodity needs. Commodity shoppers make decisions based on minimally acceptable standards. They ask, “Does it meet our (minimum) specifications?” If you answer “Yes,” you have agreed to a commodity discussion. Call into play all of the buyer’s needs, not just their acquisition needs. Customers must design better solutions, order flexibly, implement solutions, maintain them, and capture the most value from them. This is a value-added sale, not a commodity sale.
Next, discuss your solution, not your product. Your solution is your total, end-to-end customer experience that includes all three dimensions of value: products, company, and you. Discuss product features and benefits. Elaborate on company value-added services. Explain your personal commitment to helping the buyer capture the most value from your solution.
If you fall victim to a commodity decision, it is because you have lost the argument about your real value. Commodity shoppers exist because salespeople play the game with them. Refuse the commodity game. Sell your value-added.
Tom Reilly is literally the guy who wrote the book on Value-Added Selling, (McGraw-Hill).