 |  |  The Insidious (Overlooked) Disease of CommoditizationBy Bill Caskey
There is an insidious phenomena infecting the health of today’s businesses. If you’re in the executive office, you feel it by sluggish creation of wealth. You feel it by margin pressure resulting by excessive discounting and exorbitant sales and marketing costs. You feel it each quarter when you struggle to meet sales targets.
If you’re in the sales department, you feel it when you get outsold by your competition. You feel it when you lose a long time customer who just didn’t see your value anymore. You feel it when you see marginal performance from what should be your top people. And you feel it because it takes much longer to get new sales people profitable.
And if you’re in sales, you feel it in one simple, painful place: your income.
It is a rather new phenomena that has emerged due to changes in access to information. It has a simple name: commoditization.
I’ve seen its emergence in the last 15 years in B2B companies. It has been slow to evolve but now I see it in virtually every company we consult with. It has happened with the global technology—the instant access to enormous amounts of information (internet), instant access to competitive information, and confusion about the value that a company’s products and solutions offer customers.
Commoditization happens when you are unable to effectively differentiate your value proposition from others in your industry. It happens when you are unable to get a premium price when you sell a premium value. It happens when selling cycles drag on ad nauseum—when prospects are reluctant to make a decision.
It happens when your sales people get relegated to a purchasing person (or any lower level position) to make an important decision for their company. It happens when the discussion defaults to price instead of the solution to the problem. It happens when your products become the focus of the discussion instead of your prospect’s problem and financial impact of that problem.
It happens when you are asked by the prospect to discount, even though you know it’s against your better judgment. It happens when your sales people don’t make enough calls because the process has just become too painful.
When it happens, motivation in your company lags. Turnover rises. And everyone pays the price through lower incomes and bonuses.
What makes this problem insidious is most don’t see it happening. They see the physical manifestations of it but are way too busy fighting the fire to look for the fire’s source. They are looking for the solution in exactly the wrong place—in marketing brochures—compensation programs—new sales tools—faster websites and other familiar, but wrong places.
Sometimes, when they see what the problem really is, they hide their head in the sand unable to come to terms that is the solution.
The Number One Competence of Tomorrow
There is one competence that your people should know before they know where the coat closet is. This is the immunization of further spread of the disease of commoditization.
The Competence of Value Communication.
This one skill will immunize you from the increasing desire on the prospect’s part to commoditize you and your products.
There are three pressures that make this a formidable task…but the alternative is a business life mired in uncertainty, margin pressure and income pressure.
The first pressure is time pressure (we have to fight the urge to be busy doing instead of thinking about what our value is and how we can communicate it to the people with the money). The second is competitive pressure (we have to understand how we are getting outsold – either by another vendor, or, more frequently, by the prospect default to doing nothing and living with their problem.) And the third is customer pressure (what you feel when the customer tells you what they need, even when you know it’s not in their best interest.)
There is a Process we will take you through that has three sections.
1. Value Assessment. Here we will get inside your mind to determine what your true, core value is to the prospect. But we won’t stop there. We will challenge you, beat you up, drill down, and peel the onion to determine the true value you bring to your client at all levels of the food chain. This goes not just for the product value (what you sell) but your personal value (the expertise and processes you bring to the game). Through this process, you will find your proprietary value, that value that you have which no one else in your market has.
2. Value Communication This is a bit tougher than #1 but knowing your value isn’t enough. You must know how to communicate it to your market segment. This considers who you call on, how you call on them, what you say when you show up (we’ll work through the exact words to this as well) and how you set up the sales process.
3. Insights to Success Plus, there are many other factors that influence your success in transmitting your value. One of those is what we’ll call your mental game. This is about how you think—about your self—about the Universe—about the marketplace—about the role you play in the game you’re in—and a host of other non traditional topics that have as much to do with your income and success than your product does.
These Three Stages in the process will teach you more about how to sell what you sell than any class you’ve ever been to. Mainly because we are taking a totally different whack at the problem…a deeper, more meaningful approach to your profession and your future.
If you can change how you think slightly, then you will change your results, profoundly. And if you don’t have a predictable system to follow, your results won’t be predictable either.
Bill Caskey can be reached for media inteviews by calling Lindsey Miller at 317.575.0057
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