Escape from the commodity pricing trap

Just how different are the products/services you sell contrasted with your competitor? Can your customers genuinely perceive a distinction between what you provide and that of your rivals?

If you find yourself quietly admitting to little or no difference, you are probably selling a commodity. Commodities are usually sold on a price basis by he who has the lowest price — often determined by he who has the lowest cost. This is the successful strategy of the nation’s largest retailer.

You probably don’t command the resources of that retailer but do aspire to extract yourself from the commodity pricing trap. To do this you have to create a desirable difference for what you offer in the mind of your prospect. People will pay more to get what they want, what they prefer. What makes you, your products/services, your company, unique?

Being first is very important. Harvard was the first college in North America. Coke the first soft drink. McDonald’s the first fast food. Hertz was the first car rental company. If you were first, this makes you special. Tell us!

What’s happened to your sales, customer and employee numbers? With four customers last period and eight now, legitimate claims of doubling growth in one period can be made. You want potential clients/customers to notice, to self-suggest, “That’s good. There’s got to be a reason.”

When using statistics-based arguments, you are free to compete with yourself. Ignore the other guy. Focus on what makes you good, better, best. When results are good, shout it out. No one will do it for you.

Are you a specialist? People perceive specialists as experts because of the intense knowledge specialization allows. No profession does this as well as physicians, with more than 400 specialties and sub-specialties. People expect to pay more for expertise. Specialization has never been a barrier to success and prosperity for any of them.

A highly effective technique for creating a difference is to simply declare what you are not. Taco Bell suggests we “think outside the bun,” proudly proclaiming what they don’t do – burgers.

This can be a hostile technique with lots of legs. Put the spotlight on them. If adversaries employ frugal ingredients, slow service, crackpot processes or evidence exists of poor background or track record, just pointing out that you don’t will help you develop that all-important desirable difference.

Where is your competitor strong? That is its weakness! If they’re low-priced, they’re probably low-service and low-quality as well. Use it against them. Appeal to those desiring service and quality, and you will be successful with those customers.

Up against a contender with multiple locations, wide selection, or large employee base? That means higher real estate, inventory carrying, and payroll costs as well. With their claims of wide selection/offerings, they confess. Their own bravado has convicted them. They aren’t specialists. Your nimble size offers the ability to react more quickly to new opportunities and market changes.

Have you won an award of some kind? Testimonials are perceived as unbiased endorsements, proof of product performance, advertising with credentials. If someone pins a medal on your chest, wear it with pride, particularly if no one else can.

How you put products in customer hands may be what makes you special. Dell Computer makes to order with direct-to-customer distribution. Dominos does not specialize in pizza, but in the home delivery of pizza. If your delivery is different, some will appreciate it.

Maybe you are the innovator, the technology leader in your industry. Intel and Gillette are examples of firms that continually sacrifice their own cash cows at the altar of innovation to repeatedly earn their technology leader diplomas. If you’ve got it, flaunt it.

Studying methods employed by companies in familiar industries may set the old gray matter on a creative path to forming that desirable, detectable feature that breeds a genuine preference.

A Maryland chicken man created a visual difference by restricting his flock to a yellow diet consisting of marigold flowers and corn meal. This nutritional regime literally imbued his birds with gold — a skin tone easily discernable in your grocer’s case. Next to his, opposition birds appear to suffer from prison pallor. This strategy creates a visual appeal. How about different container shapes, sizes and colors for your product?

A toothpaste manufacturer formulated a dentifrice with a unique ingredient to prevent tooth decay: fluoride. To protect against copycats, their fluoride ingredient has a brand name as well. Free to promote all the benefits of the generic fluoride, they own the luxury of closing their marketing message with the literal truth that only their toothpaste contains the brand name ingredient. Difficult for consumers to detect with sight or smell alone, its turquoise color supports these difference assertions. What can you emphasize?

It’s not a question of creating a better product, but of creating a distinction some will prefer. Not everyone wears Armani, owns a Rolex and drives a Cadillac. And that’s good news for those of us selling Levi’s, Timex and Hondas.

Arthur “Chip” Card of Manchester is a business adviser and mentor. He can be reached at a.card@comcast.net.