Here Is How You Are Becoming a Commodity

There is this thing that you do that causes your prospective client to believe you are a commodity. When you do this, even though you believe you are making selling easier (something that should never be your goal), and even though you believe you are creating value for your prospective client, you are not doing either. What you are doing is commoditizing your company and contributing to the commoditization of your industry.

What you are doing that creates such a negative result is trying to lower the price your prospective client is paying now.

Reducing the price that a person or company pays for something is not the same thing as lowering their costs. These two outcomes are not at all the same. A lower price moves towards reduced outcomes, as outcomes follow the direction of the investment. This is the reduction of value, not an increase. A higher price moves towards greater outcomes, as more money is being invested in producing those outcomes. This is why you see two companies in the same industry with gigantic differences in price and produce a net profit (their real profit after they pay for their costs of goods and their operating costs) that is almost exactly the same.

When you suggest that your client can produce the same or better result at a lower price, you are creating the perception that what you sell is a commodity, that there is no differentiation between you and your competitor and that no greater value can be created. You have made this clear by focusing on reducing the price they are paying instead of creating greater value, which would focus on something else, like lowering costs, improving some area of their business, capturing market share, capitalizing on some opportunity, or dozens and dozens of other worthy outcomes.

If you believe that it is true that your prospective client should change to your company for a reduction in price, then that same prospect that moves from their current provider to your company is right to change to any other company that can promise to do what you do for less than you are doing it for now. In a lot of markets, there is a race to the bottom, but that isn’t a race you want to win.

Even if you are a commodity, it doesn’t pay to sell like one. If you want to make selling easier, you go the other direction and do the work of providing a reason to choose you over your competitors—one that isn’t going to be threatened by a competitor who offers to save your client a few bucks by lowering the amount they are investing.

Filed under: Sales 3.0, Sales Acumen

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