The Commodity Trap

                In his book, Beating the Commodity Trap, Tuck professor Richard A. D’Aveni warns that commoditization has never posed a greater threat to business than it does today.
            While many companies claim they are customer focused, they consistently fall victim to competitive pressures and buying tactics rather than deliver solutions to their customers’ problems.
            A new rep at a station we work with recently showed us a competitor’s discount package and insisted he needed a similar package to sell.
            The station he had just joined has experienced a dramatic turn-around in sales recently by utilizing our customer centric approach to selling. But the new kid had not yet drank our Kool-aid.
            The successful reps at that station have learned what it means to be truly customer centric. Instead of asking, “How can I compete with our competitor’s packages?”, they ask questions like;
 

• “What is it my customer really wants?” 

Hint: it’s not spots and rates.

• “What solutions can I deliver to solve their most pressing problem?”
• “What’s my ‘big customer focused idea?”

            There are many media reps that were sucked into the trap of thinking advertisers only cared about prices and commodities when the selling got tough.
            But now, more than ever, your clients need solutions to their problems and a reasonable return on their investment. There are many media and non-media vendors who are winning bigger orders today by helping their clients achieve their goals and solve their problems.
            Are you a solutions seller or a commodities broker? Commodities brokers seldom build lasting customer relationships because there is always a broker who will sell for less.
            The sad part is, advertisers who jump from broker to broker never achieve the consistency and strategy necessary to get a return on their investment. Many who bought that way when times got tough, have learned the hard way that a return on investment is much more important than the cheapest commodity. 
            If you tried the commodity broker route in reaction to your competitors, I have to play Dr. Phil and ask, “How’s that working for you?”
            Maybe it’s time to sharpen your skills as a customer focused marketing expert and break away from that downward spiral in 2010.