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The Commodity Game

Are You Playing The Commodity Game?

Buyers try to make everything we sell into a commodity. "You're no different than your competitors," is their mantra. As salespeople, we have to engineer solutions to our clients' problems instead.

Unique Product vs. Commodity

One of my clients is a Wisconsin-based equipment manufacturer for the food, dairy, chemical, pharmaceutical, biotech and beverage industries. They sell their products to ConAgra, Kraft, Pepsi and Budweiser, among others.

A major strategy in their marketing plan this year is to give plant tours. When potential customers come into my client's ISO9000-certified, state-of-the-art facility and see the laser welding station and pumps being engineered to each customer's exacting specifications, they gain a new appreciation for the product they normally buy from a catalog or distributor. Seeing the production process, the people and the equipment in person adds value to the sale and cements relationships with customers. Their goal this year is to have 50 key food-processing clients tour their facility, and they are on target for that.

Mike, the company's national sales manager, makes it very clear that once the buyer positions you as a commodity, your margins are gone. "We want people to know that we are selling them an engineered item and not a commodity," he says.

Ideas turn a commodity into an engineered solution. However, ideas take more time and investigation. Having rep firms investigate needs and fact-find instead of waiting for the buy to come down is a proactive approach everyone can learn from.

Getting your clients to tour your facility gives them a connection with your business instead of simply buying a product from you. Your clients need to see the people who make the product and your company's investments in buildings and equipment. It's good business to get your customers on your turf once in a while.

Putting It into Action

If you haven't already set a goal to get clients to your facility, you might want to do so. Create an organised, logical presentation that shows a client how his purchase goes from paperwork to finished product. He can see you have an ordered process for doing business.

If you're worried about getting higher prices and not being seen as a commodity, it's a safe bet that just about every business has the same problem. The good news is people still buy things from people, and we still have some highly paid salespeople who have developed extraordinary faxing skills.

"There is no such thing as a commodity," wrote Theodore Levitt, in his book The Marketing Imagination. Your job is to find ways to differentiate your product and yourself from the competition. A tour of your facility is one way to show the uniqueness of what you do.