I’ve heard that from lots and lots of salespeople and small business owners. They say it because they think that price is their only advantage.
The thought also protects them from feeling the need to learn about marketing…or selling…or positioning their offers….
It shields them from personal responsibility for their own success.
Let’s take a commodity. A 12 ounce piece of steak.
In one restaurant, this is $20. In another restaurant it’s $80. Why?
The same piece of meat, bought from the same meat wholesaler….cooked in exactly the same way…. Why the difference in price...that people eagerly pay?
Because of everything else involved in the transaction.
Sure they are paying for a meal…but what else?
1) The restaurant's reputation
2) The attentiveness of the staff
3) The attractiveness of the settings on the table,
4) Who else eats at that same restaurant?
5) The signage, parking, safety of the area.
6) How clean and attractive are the restrooms?
7) What else do the serve?
8) Is there a theme that’s attractive?
9) The hours open
10) The reviews on Facebook and Amazon.
11) What publicity has the restaurant created?
12) Who recommended the restaurant to you?
I could go on, but you get the picture.
I sell vacuum cleaners at retail. Yesterday a couple drove 50 miles to see me, to buy a vacuum cleaner for $800. One that they knew they could buy in their own town for $200 less. A real commodity.
Why did they come to my store? I asked, and they told me.
They went online and read the reviews for every vacuum cleaner store within 50 miles.
I had the best reputation.
And I offered several services for free, if they bought from me. Services with a high perceived value, but low cost to me.
My store is clean and I have a large inventory of machines on the floor. Something unusual in this business.
And yet, when they left, they had the same vacuum cleaner they could have bought elsewhere for less. A true commodity.
So…what can be learned by all this? If you think you sell a commodity, you are wrong…because everything else they get, service, delivery, speed, knowledge of your business, reputation, and your marketing are all separate from the thing you see as a commodity. And all of these things matter.
A friend of mine sold mattresses. I saw one of his ads. I asked him “Do you deliver for free and take their old mattress?” He said “Of course we do”
I said “Why isn’t that in your ad?”
He said “people don’t care about that. They only care about low prices”.
I felt very sorry for my friend, because he was now shielded from the reality that some customers care quite a lot. And price shoppers are only about 20% of any market.
So he was spending real money to attract the least profitable, smallest market segment….virtually guaranteeing hat he would go out of business. And he did.