What is an example of commoditizing a product? This is: “Our debit card will allow you to pay for services at no extra cost. All you do is swipe. Our bank account has no ledger fees. You will also access your account online or an app.” The prospect yawns: “What’s new?” he wonders. Indeed, what’s new? If you have ever wondered how to commoditize a service, now you know.

Commoditizing your product frustrates the sale at best, and loses it at worst. When you tell what your product is, you don’t sell. And because you don’t sell, but tell, the prospect is not emotionally moved. Instead, he logicizes. “Sounds the same as the last three sales guys. Let me push for a price reduction. (Or, let me politely dismiss him)” Either way, what would have been an effortless downhill task becomes an arduous uphill one. And that is what commoditization does. It’s what happens when your product becomes a commodity.

What does it mean when a product is commoditized?

Commoditizing your product or service, means you (and therefore the prospect) are unable to differentiate your product from others. A differentiated product has the benefit of sounding different, new, and exciting. “There is no need to carry cash around with you, no incur money transfer charges. You can do your shopping and fueling with a card you always have in your wallet. Your VISA card.” Or, “Judging from the floor your house is on, this pump will serve you better. It can pump water up 5 floors with ease. So being on third floor, you are guaranteed a steady stream of water.” Now compare this to, “Our pump has 14hp and torque speed…”(YAWN!). The prospect wonders, ‘Is there no one that can explain to me what I want in simple English?’  This is yet another way of commoditizing yourself, and therefore your product.

commoditizing your product

Differentiate your product by not commoditizing yourself

As shared, differentiating your product is most effectively done by differentiating yourself. Stand out of the crowd of sellers. Pitch to the buyer’s pain. Show how your product or service is the optimal diagnosis to the prognosis discovered. So, “Our two way lift opens from opposite sides,” may excite you but it doesn’t the seller.

However, “Your safety record has been adversely affected. From what you have shared, the movement of the forklift this way and that in the warehouse, has been a significant contributor to accidents and therefore your safety record. A two way lift will eliminate the need for movement of the forklift up and down the ramp. It will just enter through one door, be carried to the next, and exit without even needing to turn. Is this something that would interest you?” Don’t be surprised if he says, “You know, I’ve heard three other sellers pitch us the two way lift. But you are different. You know what you are talking about.”

What is an example of commoditization? What is an example of differentiation? Now you know.

Commoditizing yourself or your product or service loses you sales.


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