How Can You Combat CommoditizationCommoditization Absence of any perceived value, making it so that price becomes the only determining factor. Whether there is real differentiation or not, if the prospect’s brain cannot or will not distinguish this differentiation, it doesn’t matter.?
Hi, Bryan Gray here from Revenue Path Group. Here I’m going to talk to you about commoditization. We all know what that is right? Commoditization: the lack of any distinguishable value between you and your competitors. Well guess what? When you’re at that final stage competing against two or three other companies, you all look, sounds, and act the same. And when they believe that to be true, why wouldn’t the decision be based on price?
So what happens is, when we live in this world where everybody is becoming commoditized, it becomes that proverbial race to the bottomRace To The Bottom This happens in the procurement sale phase where there’s little to no vendor differentiation in the prospect’s brain. Price becomes the deciding factor, and vendors many times get pitted against each other to win via the lowest possible price. Organizations may hope that later this pricing position can be reclaimed (after the initial sale is made, in future sales), but this rarely happens., where everybody starts driving down and making price the only distinguishable factor between you and your direct competitors. We all know the paint that this is causing. And in a world where there are too many good firms chasing too few deals, this will be the first thing that you’ll fall prey to and actually create the most harm to your organization
So to combat commoditization you have to start getting in earlier. You have to meet with the real decision-makers, not buying teams. And help them really understand the compelling reasons why not just they should choose you, but why they should choose you over doing anything else. And when you can connect to that part of the prospect’s brain that cares most about eliminating pains, threatsThreats What the primitive brain will act on. Whether real or perceived, the brain prioritizes acting on threats above and beyond any other action. This hurts sellers who are unable to connect the real impact of their product/service to a prospect’s threats., and fears, then you become a priorityPriority A commitment to eliminate a threat that’s both urgent and important. A priority is what will get acted on, instead of just discussed. It differs from a pain point because most pain points never get acted on..
So as a recap, commoditization = ugly word. If you don’t actively do something about it, you will fall prey to it every time. What can you do about it? You understand how your impact really, really connects to a deep-rooted pain or a threat that your prospect is experiencing. When you’re able to pull that off effectively, you will in fact become a priority.