User login

How to Escape the Commodity Trap

(February/March 2017) posted on Tue Mar 21, 2017

Why do things become commodities? More importantly, how can you prevent your business from becoming a commodity? It all starts with understanding your customer.


click an image below to view slideshow

By Mark A. Coudray

Think about what they are trying to achieve. It’s not about ink on substrate; it’s about communicating an experience. It could be branding, or exclusivity, or association with a group or event. There are so many opportunities to take each of those objectives farther than the shirt you are printing. The graphic application is just a small part of the package.

Beyond the emotional connection, another way to differentiate your company is through time. Everyone is “time bankrupt” these days. We are all busy with too much on our plates. Anything you can do to streamline your process and save your client time adds value. As someone once told me:

“Poor people spend time to save money; wealthy people invest money to save time.”

What can you do to save your clients time? Maybe add easy-to-use comparison charts and cost worksheets on your website, or a client interface that lets them quickly place and check orders without having to call. Offer a concierge service where you expedite the job with a higher degree of involvement and faster turnaround time. Perhaps you can do something unique with delivery or merchandising.



Even if you are in the commercial/industrial sector selling strictly B2B, the rules still apply. The twist is, you are working with purchasing agents or buyers who are not personally invested in the emotional outcome. So focus on ways to reduce the time, improve the financial terms, or cut the total cost of the transaction. Get creative; there are always ways to separate your business from the pack.

Another excellent approach is to focus on financial terms. Offer a deeper discount for cash with the order, perhaps, or a longer time to pay. Think of ways to lower their risk by improving your performance guarantee. When you know what the client is worried about, you can add value by addressing those concerns.

I had a good friend whose company was selling to Wal-Mart, and it was cutthroat business. They were always worried about being undercut. Eventually, they realized that Wal-Mart did not care what they paid for the product – they really only cared about how much income per square foot they produced. It came down to turnover time and sell-through. They wanted to never run out of a product while buying only how much they would sell.


Terms:

Did you enjoy this article? Click here to subscribe to the magazine.