HVACRDB

Selling Commodities

“How do you create a perceived value to differentiate yourself from the competition when you are both selling a commodity?”

That's a question attendees often ask me in my seminars. It uncovers a problem that is spreading to almost every industry. The rapid pace of technological development and our ultra-competitive global economy mean that no one can keep a competitive edge in their product for very long. Develop a hot new product or service, and before you can take your first check to the bank, a competitor has a hotter or cheaper version. As a result, customers are more and more inclined to view your product or service as a commodity — with no real difference between you and the next guy.

This complicates life for the salesperson. In some cases, you are selling exactly the same thing as your competitor. In others, your product may not be exactly the same, but the customer views it as a commodity with no real differences between what you sell and what your competitor offers. How much real difference is there between Coke and Pepsi, after all?

Regardless of the situation in which you find yourself, the problem for the salesperson is the same — getting the business in the face of the customer's perception of your “me too” product or service.

So, what do you do? To put it simply, you must detail and communicate the important ways your offering differs from your competitor's offering.

That's easier said than done. To do so effectively, you need to spend some time thinking and preparing. And that means you must carefully consider the two most important elements of the sale — your offering and your customer. In this column, we're going to focus on one part of that equation — your offering.

Granted, your product may be exactly the same as the competition, but the totality of your offering may be dramatically different. I use the word “offering” to indicate every aspect of the purchasing decision — not just the product. For example, the customer buys the product from a company — yours or the other guy's. The customer buys it from a salesperson — you or the competitor. Your company and you are part of the “offering.” In addition, there may be differences in your terms, delivery, customer-service capabilities, follow-up, return policy and value-added services. All of these are part of your “offering.”

The product may be identical, but everything else about your offering may be different. For example, let's say you are contemplating purchasing a new Taurus. You have identical price quotes from two dealers. The product is the same, and the price is the same. However, one dealer is close by, the other across town. One dealer has a reputation for great customer service, the other doesn't. The salesperson for the first dealer is the brother of an old high-school friend, while the salesperson for the second dealer is a bit cocky and pushy. The first dealer has a clean, comfortable establishment, while the second one is cramped, cluttered and dirty.

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From whom do you buy your Taurus? Of course, you buy it from the first dealer. Not because of any differences in the product or the price, but because of differences in the offering. Got the idea? There is a whole lot more to a decision to buy than just the product or the price.

Your first job is to identify those differences. Here are some very specific steps you can take today.

  1. Think about everything that is associated with the product when a customer purchases it. Create several categories, and label columns on a piece of paper with the names of those categories. For example, the first column could be headed with the word “company,” the second with the word “salesperson,” the third with “terms.” Continue in this way, identifying every aspect of the offering and placing each of those components at the top of a column.

  2. Now, consider each column one at a time, and list all the ways that your offering differs from your competitor's in that column. For example, your company may be locally owned as opposed to your competitor's branch of a national company. Or you may be physically closer to the customer, or larger, smaller, newer or older. After you've exhausted one column, move on to the others, filling in the details as you go.

  3. This exercise will typically reveal dozens (and in some cases, hundreds) of specific, detailed differences, far too many than you can easily communicate to the customer. So, your next step is to pick out those differences that are most important to your customer. Keep in mind that often what you see as important may not be viewed that way by your customers.

    At one point in my career, I worked for a company that celebrated its 100-year anniversary. That was unusual. No other competitors had been in business nearly that long. The company decided to make a big deal about it. A history of the company was written, brochures printed, even murals depicting significant moments in the company's history were painted on the walls of the corporate office. We all thought it was important.

    Our customers, however, didn't care. After respectfully listening to our boasting, their response was some form of “So what?” In other words, our 100 years didn't mean anything to them. In no way did it make their jobs easier, simplify their lives or make them more important to their companies. What we thought was important turned out to be irrelevant from our customers' perspective.

    Don't make the mistake we made. Instead, take the time to critically analyze your list, and eliminate those items that are not important to your customer, that don't impact their jobs or make a difference to them. You should be left with a handful of items.

  4. One more step to the preparation. Translate each of those items into statements of benefit to the customer. For example, your company may be local, while your competitor ships from 50 miles away. So what? What does that mean to your customer? You could translate that item of difference into a benefit by saying something like this: “As opposed to some other suppliers, we're just 15 minutes from your plant. This means that you can get quick delivery of emergency shipments, as well as rapid response to any problem that might develop. So, you'll have potentially less downtime in the plant and, of course, less stress and pressure on you.”

Now that you're professionally prepared, you are ready to communicate those differences to your customer. You need to point them out in an organized and persuasive presentation.

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Prepare a sell sheet with each of the differences noted as a bullet. Next to each bullet, have a few comments that capsulize the benefit statements you prepared. Then, meet with your customer, lay the sheet down in front of him or her, and talk down through it, explaining each point as you go.

Treat it as you would any other well-done presentation. Be sensitive to your customer's reaction, and ask for feedback as you work down through the list. Say, “How does that sound?” or “Does that make sense to you?” and emphasize those things that seem to be more important to your customer. Then, leave that sheet with your customer.

I'm always amazed at the number of salespeople who are confounded over the customer's perception that their product is just like the other guy's, when those salespeople have done nothing to show the customer how it is different.

As always, if you have done a good job of analyzing, preparing and communicating, your customer's perception should be altered, and you gain the business.

If you haven't done well at this, then your customer will continue to see no difference between buying from you and buying from the next guy. And, if you haven't shown him or her sufficient reason to buy from you, then he shouldn't.

From the customer's point of view, if your offering is just like the competitor's, then the customer is absolutely correct in buying from the cheaper source. However, if there is any difference between your offering and your competitor's, then the responsibility is totally yours to show the customer that difference. Follow the process described here, and you'll have far fewer customers treating you like a commodity.

By the way, you'll find this kind of insight into dozens of sales issues in our Sales Resource Center. It houses 435 training programs to help everyone live more successfully and sell better.


David Kahle has trained tens of thousands of distributor and B2B salespeople and sales managers to be more effective in the 21st Century economy. He's authored nine books and presented in 47 states and eight countries. Sign up for his weekly Ezine. For a limited time, you can purchase his latest book, How to Sell Anything to Anyone Anytime, and receive $534 in FREE bonuses. Contact Kahle at 800/331-1287, [email protected] or visit http://www.davekahle.com.

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