Avoid Death By Commodity
Everywhere you look you’ll see commodities: consumer goods of all kinds, educational programs, training packages, technology systems, and all the approaches and ‘best practices’ that are on the market in every industry. You may have some commodity offerings yourself, but you’re not going to get rich on them. Even McDonald’s is finding it hard to keep the profits coming in.
How does your company avoid death by commodity? First, understand that commodities are offerings, both products and services that are offered in the same format or combination to every buyer. They focus on the inputs that are being offered. From one company to the next, they are pretty much the same in terms of content, quality and price. There is no differentiation between commodities, meaning that none deserves a higher price, nor is there an opportunity for higher profits.
To avoid death by commodity, your company must innovate and improve. I’ve written about the definitions of innovations and improvements before. You will benefit from innovations for up to 3 years and from improvements for 1 year. Innovations and improvements require only a modest investment, and can usually be found hidden in plain sight right within your company or business. In my consulting work, I’ve found that the very intimacy of chief executives and founders/owners is what prevents them from seeing opportunities hidden in plain sight. Bring in your customers or a creative outsider in order to identify the innovations and improvements that are lurking right there.
There’s no need to die by the low revenue, low profit hand of the commodity. You’ll avoid it by looking very deeply and cleverly inside the box or within the parameters of your existing business. You’ll find it by putting on your best customer’s or ideal buyer’s hats. You’ll find it by investing in a creative outsider who has a track record of discoveries inside existing businesses. You’ll find it by provoking objections–that always indicates you’re on to something that will stand out from the commodity-strewn crowd.
What are you waiting for? Avoid death by commodity and enjoy life by innovations and improvements.