Buyers consider a product as a commodity when there is no differentiation between brands or sellers. So what do they base their buying decision on? Price! Buyers pit sellers against each other to get the lowest price on a commodity product. But there are great salespeople who are very successful selling commodity products.
Break The Commodity Product Mentality
We say there are three components to each purchase: quality, service and price. Buyers can’t get all three but they can choose which two are most important. Commodity products vary by quality. Copy paper made from recycled material is different than that made from new pulp, for example. But the same branded item purchased from multiple distributors has the same quality. So to break the commodity mentality about a product great salespeople focus on service and price.
Unique Selling Proposition For Commodity Products
When I sold for a national safety products distributor, my job was to persuade buyers that we were the best company to buy from. The products we sold were from the same manufacturers as those sold by my competitors. So we all sold quality products. Then my job was to differentiate on price and service.
Selling Against The Lowest Price
When a buyer wanted to discuss a $2 discount on a $20 box of earplugs, I needed to change the conversation. To still sell the earplugs, I used service as our unique selling proposition. In large manufacturing or construction businesses with many employees needing approved safety equipment in the right place at the right time, any lack of product could jeopardize safety or stop work. So rather than deal with the cost of any one commodity product I convinced the safety and operations management of the importance of timely supply at minimum inventory costs.
In some large multi-location national accounts, we integrated their inventory stock level system with our order entry to automatically ship products at economical order quantities. At large oil refineries, we located stores in the plant. The customer didn’t need to carry the inventory as products were provided as needed. The customer’s funds weren’t tied up with inventory. This high level of service made us the preferred vendor and was very difficult for a competitor to take the business.
How To Unseat A Competitor
Using my experience with safety products distributor again, we found ways to win business by focusing on a particular safety problem. Of course we maintained good relationships with the product buyers. But we looked for safety related problems with the safety and operations management. We always asked: “what was the biggest safety issue?” Our presentation wasn’t about the safety products themselves but how we could provide both products and training to reduce the injury rate. This way we didn’t have to be the low price commodity but were seen as best value. Great salespeople create value in their products and service exceeding the price paid.
What You Can Do Right Now
- List the products you sell that are viewed as commodity.
- Identify the customers who consider your products as commodities
- Think about the problems your customers have and how your products and services can solve those problems.
- Work with your colleagues in sales and marketing to develop new unique selling propositions to set you apart from your competitors.
To learn more sales secrets see Chapter Four, Personal Selling and the Marketing Process, in Secrets of the Softer Side of Selling. For even more sales encouragement, join our FREE Sales Club! “See” you next week.
Don Crawford & Lois Carter Crawford