Strategic Coach Resources

What is commoditization?

Think about something you’d like to buy. Chances are, you have a number of options about who to get it from. If it’s not available locally, you can always check eBay, the Yellow Pages, do a search for it on Google, or even use a price-comparison website to find out not only who’s offering this item, but who can get it to you cheapest and fastest. That’s commoditization: the reduction of everything in the marketplace to a question of price and speed.

“Things” versus relationships.

More and more, every product and service is subject to this kind of comparison. If you’re merely an outlet for “things,” you, too, can come to be considered a thing. Things have prices, and customers are well-versed these days in ways to get the best price they can. This is how you become commoditized. It’s not surprising if you don’t want to be part of that economy. So how do you escape a literally global phenomenon? You do it one relationship at a time.

A different kind of conversation.

When you approach a client or customer to talk about something you want to sell, you’re firmly set in the world of commodities, where time and money are the concerns, like two colored lenses, through which they see you. The alternative is to have a conversation about them. When you talk about their unique situation, you immediately bypass the danger of being commoditized. The Commodity Bypass is simply a kind of relationship based on conversations — real conversations about your client or customer’s future, not pitches for products and services.

Conversations that matter.

Some businesses post scripts near their clerks’ stations with cues for compliments they should give out. But no one is moved by this kind of inauthentic babble. Clearly not just any kind of conversation will do. People want to have conversations and make connections that can make a difference in their lives.

… the products or services you sell that help them get there are secondary to your role as the facilitator of their dreams — and that is a relationship beyond price.

When you ask people about their future — what they’re most excited about, afraid of, and confident about — you make a powerful, honest connection with them as a human being. Wal-Mart can beat nearly anyone when it comes to price, but few customers imagine that the retail giant is particularly aware of them as individuals or invested in their future. This is where your biggest opportunity lies.

Dreams are priceless.

What people care about most is their future. Conversations about what matters to them, the things they dream or worry about, provide you with a complete plan for creating the most value for them. If you make up problems in order to sell someone on a solution, the conversation is stilted and limited. But when you ask them about their personal vision, and you have a way to help them reach the goals they describe, the products or services you sell that help them get there are secondary to your role as the facilitator of their dreams — and that is a relationship beyond price.

Isn’t this approach expensive?

Ultimately, no. These conversations are an investment with great rewards. A study of doctors in the United Kingdom showed that if the average length of time a doctor spent with a patient was less than 16 minutes, the chance of a lawsuit jumped exponentially. This principle is universally applicable: Having these exploratory conversations will quickly make it clear if there’s a role for you in a person’s future, and vice-versa. You’ll save yourself a lot of time and energy by having this knowledge.

A relationship for the long-term.

Long-term business is based on relationships. When you provide someone with a sense of certainty, predictability, and confidence, your connection with them will supersede concerns about price. Your clients and customers will buy their commodities from the cheapest bidder, but they’ll come to you when they want a partner in their plans for the future.