I want to share a quick test with you this morning to help you understand the challenges and fears folks face when I talk about commoditization.
Fear
Most people I speak with are afraid of losing out on a project or a client.
They often feel on edge between winning and losing, like they have no real power in the sale.
They aren’t afraid of losing a client to a better competitor…not usually.
No. They are afraid of losing the client to a cheaper one.
Why is this a real fear?
Because most people’s businesses aren’t positioned in a way that a prospect can tell the difference.
The Question
“If a competitor offered your exact service for 10% less, would the prospect take that deal?”
When the answer is yes.
You have a positioning problem.
The False Comfort
The first excuse is “It was the price. I was too expensive.”
You may lose on price. But if you are losing on price so quickly…it is because you aren’t distinct.
If you are reduced to price shopping, that’s a positioning problem.
Why You?
In this situation, you have to ask yourself a question…not, “Am I better?” Or, “Am I too expensive?”
No.
The real question is “How am I different? Better? Unique?”
Most people mess this up. They answer with tactical things like experience, proficiency at a software or tool, credentials.
These are things that are assumed in most cases now.
The real answer comes down to impact.
If the prospect picks you, why are they better off than if they picked the cheaper competitor?
In real life, impact looks like the way I helped position a niche insurance business land the one key partnership that made them the industry leader.
They’d been chasing this client for two years.
Impact.
Your Actions
I’ll make this actionable for you.
Write down three things you want prospects and clients to say about you when you’re not in the room.
Then, ask yourself whether those three things come through for the market and if they survive the “10% test.”
Yes? Great. Go win.
No? Don’t pass go. Dig deep. Find the thing that makes you unique.
The “10% test” isn’t about money…not really.
It is about positioning.
If you are replaceable, you will be…by someone cheaper.
You probably already know it. Even if you don’t want to admit it.
My challenge for you is: what are you going to do about it?
DW
P.S.
My three points of differentiation:
- I don’t give advice. I name the real disease: no surface fluff.
- I build the frameworks that other people copy.
- I tell you the truth…even when it’s uncomfortable.