Winning with Commodities
Doyle Slayton | Mar 23, 2009 | Comments 8
There are three ways to win the commoditized sale. Although it sounds simple on paper, putting all three together is a huge challenge.
- Product – In a highly competitive environment, a great product is critical to success. Quality, Performance, Ease of Use, Robustness, Customizability, and Appearance all play a part in influencing the decision to buy. If you are a sales person who has a great product development team, thank them… thank them… and thank them again
- Service – Once you have a customer, the trick is keeping them! Loyalty is not a common characteristic for most commoditized industries. So how do you do it? It begins with strong customer service reps who are product and people experts. These account managers must be great listeners and communicators. They are highly organized with an ability to return calls and emails with speed and efficiency. Sales people… Show your operations and customer service team some love. Great customer service teammates make your deals stick!
- Sales – The key to sales success involves prospecting and pipeline management.
- Hunting – This is not an environment for the timid. Pure sales hunters who crank the phone and pound the pavement are the most successful at selling commodities. They are relentless, persistent, and battle fearlessly through all the no’s, hang-up’s, and rejections just to hear their favorite word… “Yes”!
- Pipeline – If you want long term success, build your pipeline! Everyone knows I am a huge believer in volume (see Pump Up the Volume!). You must have a huge pipeline and a great follow-up strategy. Most sales reps don’t follow-up… not enough anyway. Some of them are afraid that they are bothering the prospect. Sales professionals who win the commoditized sale master the art of fearless follow-up! With amazing finesse, they call and call, email and call, and call again until they get a decision.
Ultimately, it comes down to having great people. Commodities are ruled by companies who have the best employees… in the right roles… executing at peak performance!
What are your keys to winning with commodities?
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Filed Under: Blog • Leadership • Sales
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What do u mean by commodities, orange juice, corn, pork bellies. Or products or services that have been commoditized?
Please advise.
Besides the checklist that you have provided, I am a great believer in understanding the product features of your and competitor products. This will help in highlighting the better features of our product.
The other area to look at is Pricing and Payment terms. Both have to be competitive
In some ways, I have to disagree with you. Customers always seek value. With commoditized products, waht customers value may be different—clearly it is not product since it is commoditized.
There are a number of ways to differentiate yourself and create value in the process. One is to help your customers reduce the cost of procurement, another is to take over logisitics and supply chain management responsibiliites, reducing their costs/hassles further.
Most true commodity suppliers offer other services/capbilities to “de-commoditize” the product. For things like basic chemicals, unique/special forumulations addressing specific customer issues, developing strategic alliances to collaborate with the customer in their own product development can, in fact, drive to exclusivity. In the electronics/high tech industries, it is common to take over some of the design/mfg process, so that rather than operating at a commoditized part level, you are working at a value add sub-assembly level.
In some ways, every sales professional can learn from their colleagues that sell commodity products. Too many sales professionals rely on their product features/functions/feeds/speeds to differentiate their offerings. They are too product focused and don’t look at other elements of value. The sales person for commoditized products know they can’t win on product differentiation, so they look at other means to differentiate and provide value—without having to be the lowest price supplier. (Note, price and cost are different).
I don’t think you’ve properly defined what you mean by a commodity. If a product is a true commodity (grain, oil, soybeans), then the key is price.
Many sellers feel that they are in a business that has become “commoditized.” For example, in the insurance business, sellers will often say “We all sell the same stuff, we’re a commodity.”
But it’s not the case. The quality of service and ability to meet your client’s business challenges varies widely from business to business. If that’s the case, then you can’t be a commodity.
I feel like people say that their business is a “commodity” as an excuse for not working hard at executing the keys to good sales, like listening for customer needs and proposing solutions. Joey Asher http://www.howtowinapitch.com
Enjoyed your article. I am glad you emphasized the need for a good follow-up strategy. You are absolutely right when you say that most sales people do not follow-up. One must be intentional about following-up with a customer. To be intentional requires time and discipline. Research shows that you must reach out to customers at least 7 times before they make a purchasing decision.
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