Let’s kick this off with some strategies for making yourself a singular supplier to your customers and keep yourself out of the dreaded commodity world. I know we have all been told “I can get this from your competitor cheaper” and if your only reply is to lower your price, you have fallen into the commodity bucket.
Merriam-Webster lists one of the definitions of a commodity as “a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (such as brand name) other than price”. That sounds terrible! Smaller Profit Margins? Who wants that? The customers have decided all of the providers offer basically the same value so price becomes the major deciding factor. Think about anything you buy based solely on the price; gasoline, internet service, groceries, and even personal computers have fallen into this trap to an extent. Most people now look for the memory, processor speed or screen size and could care less about buying a Gateway or a Dell, as they just want the cheapest one that fits their needs. How did those computer companies make themselves a commodity? They spent years selling their features and benefits. They had a really nice glossy spec sheet with all of their computer terminologies that half of us didn’t even know what it meant. They talked about themselves, their product, and not why the customer needed their brand. They didn’t talk about their relationships with their customers. Yes, we all know we might win a customer the first time based on price but successful businesses know that keeping a customer is more important than getting new ones.
So, how do we get out of the commodity trap? If you feel yourself in a race to the bottom of the price scale, you have to make some changes. If not, you will run yourself out of business since someone is ALWAYS going to be willing to sell it for cheaper than you. There is still hope though, and it just takes some mentality changes on your part. You need to do what the computer companies did not; focus on your relationship with your customers. You need to change your strategy and thinking. Talk about your relationship with the customer, not how cool or awesome looking your product is. A good example of this might be grocery stores. In my neighborhood, there are several options from a discount no-frills market, to a very high-end organic only specialty store. Yet the most successful and the one we frequent as a family is the one that lands right in the middle of the spectrum. We actually drive a little bit farther since my family and I feel comfortable there. The isles are nice and wide, everything is clean and organized, but most importantly, the staff is all amazing. Friendly, helpful and willing to work as a team when it is busy, noting their customer service is genuine and not forced. They all seem like they want to be working there. That is their focus and message in advertising. This is in contrast to the cheaper market where things are disorganized and the staff looks miserable. The middle ground market also contrasts the high-end market, where the staff doesn’t seem to even notice you are there and good luck trying to find something a 7-year-old is going to eat and enjoy. There is no balance. The middle of the road store understands their customers and the nice working class community they serve. Yes, for the most part, an egg is an egg is an egg, but how we feel when buying that egg is important.
How do we take this information and use it to improve our awards, sublimation or apparel business? Most importantly, a mentality shift must occur. You have to rethink your policies, your outward message, how your staff interacts with your customers and put yourself in your customer’s shoes. How do all of those factors look and feel from your customer’s vantage point? A great way to go about this is to spend some time “talking” to some of your best customers. Ask them either through direct conversations or surveys why they buy from you. My guess is they will not reference the type of printer you use, how powerful your laser is or the really nice price grid you pass out. Hopefully, what they say are things like your service, reliability, speed, attention to detail and personality. If so, focus on those things and just really commit yourself to own that space, making it easy for the rest of your customers to choose you for the same reasons.
On the flip side, if the response is mostly price, then you have some work to do if you don’t want to become a commodity. The most important thing is to focus on the entire customer experience from the time they learned about who you are until after they leave and are using the products. You have to step back from it and look at the big picture of this experience. Don’t stop at the time they pick up the order either. For example, if you are selling shirts for a 5K race, is it easy for the volunteers to hand out those shirts or do they have to deal with a printers fold? Are you making memorial products and if so are you making sure that it is all assembled and ready to give directly to the grieving? Then, take a good hard look at your marketing from the beginning to the end. Does the look of your marketing match the look and feel of the follow-up email they get or any other “transaction” email the customer gets? Think of the things like proof approvals, and tracking number you send out. Ask yourself, did you give the customer opportunities along the way to build a relationship with your business? Things like encouraging social media sharing, offering tours of your facility or even making sure your customers have an account representative they can contact.
If you have done all of these things, put yourself in your customer’s shoes and are confident that you and your entire staff really care about your customers, then the next time a potential customer says they can get it up the road cheaper, offer to drive them there!
As seen in A&E Magazine