"The Nine Great Lies of Sales & Marketing - Day 9
Lie #9:
You can't charge premium prices for a commodity product. If you've been tricked into believing this is real, you'll live by cheapest price and die by cheapest price for the rest of your life. People who believe this have slim profit margins and low self-esteem. But they don't have to.
For example Starbucks, AOL, and Microsoft are ALL in commodity markets but were able to re-define the rules such that they are relatively immune from price competition.
And I can guarantee you that there are THOUSANDS of small businesses as well, who use the same shrewd strategy to sidestep the whole issue of 'commoditization.'
Being a 'commodity' is the rock bottom. The most terrible situation you can be in is to sell something that's readily available from dozens of other people.
But you can alter that. I have a very specific terminology and approach for re-inventing your business and making it undoubtedly stand out from your competitors, even if you ARE in a commodity market.
It's the same thinking process that AOL, Microsoft, McDonalds and Starbucks uses, apparently unconquerable companies that dominate fiercely competitive commodity markets.
Let's take AOL as a brief case in point. In the beginning of the Internet you could become an Internet Service Provider with a few thousand dollars of cash and some phone lines. Some ISP's even gave away their services without charge. But AOL maintained a price of $23/month - just for dial-up.
Now the landscape has changed very much for ISP's and AOL has had a difficult time competing. However, the reasons for their initial triumph are still worth studying.
How did they achieve it? It is simply because AOL was fundamentally different from all other ISP's. They have FORCED themselves to come up with exceptional ways of making themselves non-interchangeable with others. They have AOL instant messenger, different kinds of online communities, and proprietary software. And once you're on AOL, it's difficult to get off.
You can pick up ideas right out of AOL and Microsoft and systematically apply them to your business, so that apples-to-apples comparisons to your competitors are hard or impossible.
If you are in a commodity business - then you MUST do this. *This is not an option.* When you do, it makes everything you do vastly easier and more effective.
Best of Success,
John Benjamin
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