Guest Blog: Competition is the Commodity
By Tim Searcy
I’m sick and tired of fruit analogies. In particular when I hear, “We want to make an apples to apples comparison.” GRRRRRR!!!!!!! Sometimes we spend so much time distinguishing ourselves from our competition’s efforts in order to commoditize ourselves that we forget that there are commonalities in our competitive product set. If a commodity is defined as, “when two things are being viewed as good enough,” there are times this characterization can work in our favor. In legal parlance, it is called “conceding the point.”
Everything not directly involved in solving the client’s problem is considered a commodity. So when it comes to solving the specific problem, we want to focus only on those elements that help us to do exactly that. So, when the prospect asks us why we don’t have “commodity X” (i.e. the commodity that the competition is point to as vital), how do we subtly address the fact that commodity X is not actually relevant to the problem they’re asking us to solve? The best way is to use powerful words to draw attention away from the shiny object the competition is luring them in with. Here are three ways to accomplish this goal:
1. Solution in search of a problem – I have seen so much “nice to have” technology inside of a basic business solution, it sometimes makes me wonder if the provider knew what the problem was to begin with. If you own a laser-guided bottle opener, and the bottle only requires the classic church key, then you have overkill. However, if you have cool technology with only vague application, you have a solution seeking a problem.
2. Distinction without difference – Often, the competition points to a small difference between you and them, and declare that this is the point upon which the purchase decision must pivot. In these situations, I recommend that you move back to the question, “What problem are we trying to solve here?”
3. Difference is less than the degree of uncertainty – Sometimes your competition does have a superior feature in their product set. However, if you’ve done your homework, rarely does your competition beat you on every benefit. We want to prove that although one piece of what they have is excellent, the on-balance measurement would go to you.
Eels, incumbents and first-line competitors are working hard all the time to commoditize you.
In turn, we are working to distinguish ourselves from our competition. However, don’t get caught in the trap of trying to win every point when credibility is going to be stretched. It is better to concede some points, but to marginalize their value.









These same issues come up with existing customers. Whether dealing with prospects or customers, it is critical to understand their needs. And here’s the tricky part–understanding their needs from their perspective, not from your own.
As for the commoditization, it is pervasive. Our customers, and especially their procurement departments (read as chief commoditization officers), strive to commoditize us. And we do it to ourselves! These are some great tips for dealing with that. Great guest blogging, Tim!
1A key issue that we are seeing with prospects of our clients on the RFP side of the world is excessive requests for transparency. In this reach-through approach, there has been a desire of the prospect to discount many of the line-item elements of the G&A expenses – for example, discounting the sales and marketing expense, (possibly 3-5% of total budget), and asking that to be taken out of the bid. This is a rather old Detroit tactic. Any thoughts on how to handle this deeper dive on commoditization?
2Just a random thought…but the potential down-side of resisting commoditzation is that you have to be willing to accept some people will not want what you are selling.
For example, to some people a Diet Coke and a Diet Pepsi are the ultimate in commodity – carbonated, carmel-colored, sugar-free. But to those of us with taste buds (ahem) they are as differentiated as can be. And, because of that, one of the is preferred (usually strongly).
My rambling point…and I do have one….if you are going to carve out a true, robust, and defined niche—be ready for rejection and stop courting everyone that passes by.
You can’t claim to be differeniated from all competitors and claim to be the universal product or service for all customers at the same time — well, without causing a rip in the time-space contintuum.
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