Warning: Don’t Let Your Business Become a Commodity

Copyright 2006 Mary Eule

The first question every potential customer, client, patient, etc. should ask when shopping for products or services is, “Why should I chose to do business with you over one of your competitors?” This question is so basic, so reasonable, so simple… a complete “no-brainer” for anyone in business, right? Wrong.

Very few business owners and entrepreneurs can articulate this, even if they “know” the answer intuitively! And although some don’t come right out and say it, they probably think, “You should do business with us because even though we do the same thing as company X, Y, or Z, we do it better.” Is this a good reason? I think not. Consumers are bombarded daily with advertisements for just about everything and have had to tune things out just to stay sane. As customer loyalty becomes a thing of the past companies are scrambling to invent new ways of acquiring that ever-elusive buyer, exacerbated by the vast number of new choices available on the internet and the relative ease of purchase. Therefore, it is even more important for businesses to “stand out from the herd”… to avoid being lumped in the commodity bin.

What is a commodity? Simply put: Products and services that are viewed identically and as a result, must compete solely on price. Companies are forced into this undesirable place primarily because their inside reality does not match outside perception or they fail to articulate what really makes them different! This leaves consumers no other choice but to choose companies based on price or convenience.

And while some companies can operate in this arena for a while, it ultimately moves them closer to extinction and means they’ll never be able to command a healthy price for their products or services. And businesses will continue to compete in this way until they do something to alter their prospects’ perceptions! Remember, perception is reality, even if it’s not factual! Don’t Become Another Commodity!

The greatest challenge for any business today is learning how to create and articulate their unique benefits. However, this can be accomplished relatively easy using a step-by step approach.

The first step is finding out where your company stands. Do your prospects view you the same as everyone else in your industry? If so, it’s time to differentiate yourself by communicating your unique value and/or creating a unique value and then communicating it! Next, you must identify the specifics area where your “inside reality” doesn’t match “outside perceptions” by asking current, prospective and former customers to help you identify gaps. These can be skewed in several different ways.

For instance, let’s assume that you’re the most knowledgeable, educated and competent financial advisor in your area, having earned and saved your clients much more than your competitors. At a networking event you give your business card to a qualified prospect in need of your services and you schedule an initial meeting in your office. However, when the prospect arrives the waiting room is bland and the sofa upholstery is threadbare; the rest rooms are in desperate need of cleaning; your receptionist is curt; your office is a mess and you can’t find the forms you need. Then you spend the next hour reiterating the professional qualities you posses – careful attention to details, reliable service, thoroughly researched advice, etc. You’re convinced that you have the know-how and abilities to provide the very best financial advice to him or her, but they choose another company. Why? Because there was a huge gap between what you said and what they experienced. Your words said, “quality and professionalism” and your environment and staff said exactly the opposite! As the saying goes, “If it looks like a duck and walks like a duck, it’s probably a duck.”

What does a dirty bathroom have to do with sound financial advice? In this case, everything. So you can either argue the point (i.e. one has nothing to do with the other) all the way to the poor house or do whatever is necessary to create an office environment that reflects your level of professionalism.

Alternatively, your customers may continue to choose you over a competitor because you consistently deliver more product or service value that you’re not even aware of! And again, the only way to find this out for certain is to ask your repeat customers! For example, women may choose one comparable hair salon over the other because they are more careful schedulers and they never have a long wait. Presto! Instant differentiation handed to you on a silver platter!

The third, and possibly the worst, perception gap brings us back to the commodity “nowhere land”. In order to transcend this place you’ll need to force an “apples and oranges” comparison between your company and the competition. You must design, execute and communicate such significant differences between you, that it customers would be foolish to take their business anywhere else, regardless of price.

Caution! Do not confuse think that you can accomplish “differentiation” by drumming up false, but clever, promises. You should never underestimate consumer, they are not stupid. One of the quickest ways to destroy your business is to communicate value you cannot deliver.

For instance, I recently went to a local retailer that advertised their open hours as Monday through Friday for 8 am-5pm. When I arrived at 2pm the door was locked, the lights were out … no one home. Annoyed, I grabbed my cell phone and dialed the telephone posted on their sign. Instead of reaching a real, live human being my call was “answered” by a machine, with the greeting, “Hello and thank you for calling company X where customer service is our # 1 priority.” (If customer service is there #1 priority, I’d hate to experience numbers 2 and 3!) And the bottom line is that it does not matter whether they really believe and/or deliver exceptional customer service most of the time… because my total, albeit brief, experience with this business was unsatisfactory.

Bottom Line: If you’re going to tell the public you’re great, make sure you really are great.