Commodities

Juice, gas, windows, pastries, insurance, cheese, tiles, financing, packaging, insert any product or service here… Even you. You are a product or service that your client can substitute, replace, or simply stop consuming without really affecting their quality of life.

You are a commodity.

This is one of my biggest realizations after having consulted for hundreds of organizations over the years. Many of my clients sell products or services that have few if any differentiating features. They rush innovations to market that are quickly perishable or easy for the competition to copy.

Even at Logient, an hour of programming, our core business, is a commodity.

I don’t say this to insult my clients, team, or LinkedIn contacts. I say this because acknowledging the truth is the first step to helping rescue managers drowning in an ocean of hungry competitors. It is the starting point for a whole lot of value-added discussions.

Just like you, your competition are experts when it comes to optimizing. They have access to the same raw material, the same suppliers, and even the same partners. They have the ability to copy everything you do—even your most recent innovation. And they can now do this faster than ever.

There are even organizations that use reverse engineering as their key business model, like clothing giant Zara. They take advantage of their global network to bring the very latest fashion lookbook to customers at a fraction of the price—and only weeks after the season’s styles hit the runways.

I know you want to tell me I’m wrong. That your product is unique and there’s simply no substitute for it. But hear me out. Admit for a moment that you are in fact a commodity—even if you disagree with me. Now ask yourself these questions:

• What’s my actual added value on the market?
• What challenges do I want to solve?
• What is my value proposition? Does it answer the issues my clients currently face?

You can see that, beyond marketing, you may in fact not know your clients as well as you think you do. And although your product answers a need, your value proposition answers an issue. Those are two very different things.

No matter what you’re selling to meet the needs of your market, your value proposition is key to creating a distinct competitive advantage. This will mean taking a closer look at your processes, client experience, business model, and maybe even your organizational vision.

You’ll then understand why coffee may be a commodity, but Nespresso and Starbucks are not. Why fashion is a commodity, but Zara isn’t. And you’ll see how your organization’s competitive advantage resides in your ability to solve challenges and not just simply meet a need.

Can you see now how your value proposition makes you distinct?

Hey, look at that! Now you’re strategizing!