It\u2019s always been tough to differentiate ourselves in the marketplace, to give customers reasons they should do business with us instead of our competitors.\u00a0 And now thanks to the internet, it\u2019s gotten even tougher.\u00a0 At one time, there was some mystery, some mystique about what we did and how we did it.\u00a0 No more.\u00a0 People now know, or can find out, just about anything they want to know about us, our business, and our industry.\u00a0 And with that knowledge, all of us start to look more or less alike.\u00a0 In short, we\u2019re in danger of becoming commoditized.<\/p>\n
We need to understand that nobody wants to buy our stuff, they just want to buy what it can do for them.\u00a0 It\u2019s the old story that nobody wants a drill, they just want a hole.\u00a0 So the answer to commoditization is to be the company that comes up with unique, creative, elegant solutions to customer problems.\u00a0 If your company is focused on that, and not on simply pushing\u00a0 products or services, differentiating yourself will be easy, and commoditization will be a non-issue.<\/p>\n
Below is a case study about a company that sells the commodity of all commodities . . . dirt.\u00a0 Well, not exactly dirt, sand and gravel to be more precise.\u00a0 Still, it\u2019s pretty tough to convince a customer that your sand and gravel is any different than the other guy\u2019s.\u00a0 If you want to see how a creative solution really differentiated an otherwise totally commoditized business, please read below.<\/p>\n
Bob\u2019s Awesome Aggregate (a fictitious name) is a California company that provides sand and gravel to large road building and commercial construction projects.\u00a0 Bob founded the company and had done reasonably well with it, but he struggled to grow it to its potential.\u00a0 The problem was a fiercely competitive marketplace.\u00a0 Whenever a building contractor would put out a bid for sand and gravel, there would be a dozen companies bidding for the job, and the building contractor wouldn\u2019t really have any way to distinguish between them.\u00a0 They all had access to dependable supplies of material, and they all could deliver the material to the job site promptly when it was required.\u00a0 So everyone got a share of the available jobs, but nobody could really break out of the pack, including Bob.<\/p>\n
It was the industry practice at that time to sell only full truckloads.\u00a0 So if the engineering calculations showed that a project would require 99 \u00bd truckloads, a building contractor would have to order 100 truckloads because no supplier could afford to send a truck and driver to a job site with only half a load.\u00a0 That meant that the contractor would have to buy half a truckload he didn\u2019t need, but also, when the project was complete, the contractor would have to pay someone to haul away the excess material.\u00a0 Still, nobody really saw this as a problem.\u00a0 It\u2019s just the way things worked.\u00a0 It\u2019s just the way things had always worked back to the days of horse-drawn wagons.\u00a0 Full loads only.<\/p>\n
As Bob thought about ways he could differentiate himself from his competitors, he began looking at this old industry practice of delivering full loads only.\u00a0 What if he could find a way to deliver partial loads to a job site . . . two thirds of a load, half a load, a third of a load . . . whatever the contractor wanted.\u00a0 The contractor wouldn\u2019t have to pay for material he didn\u2019t need, and wouldn\u2019t have to pay someone to haul away the excess material later.\u00a0 But how could he send an expensive truck and driver out with only a partial load and not lose his shirt?<\/p>\n
Maybe he could operate smaller trucks for those smaller loads.\u00a0 But no, they would still be too expensive to operate.\u00a0 They would still need a licensed commercial truck driver to drive them, the cost to insure them would be about the same, and he wouldn\u2019t get as much use from them as he would get from his regular trucks.<\/p>\n
He thought about dividing a load up among several contractors, but the logistics of getting fractional loads from the same truck to several different job sites, and getting them there when they were needed was just too daunting.<\/p>\n
So, Bob thought, maybe this is why the industry grew up around the practice of full loads only.\u00a0 Maybe this is the only efficient way to do it.<\/p>\n
Bob had originally rejected a pricing solution because just as he couldn\u2019t afford to send a partially loaded truck to a job site, so a contractor couldn\u2019t afford to pay the true price of that partially loaded truck.\u00a0 But then he started rethinking a pricing solution, this time incorporating the contractor\u2019s cleanup costs to have excess material removed.\u00a0 He was able to come up with a pricing scheme for partial loads that charged a premium for the material, but that premium was more than offset by the cleanup savings the contractor would realize.\u00a0 So everybody wins.\u00a0 The contractor saves money overall, and while Bob didn\u2019t make much money on the partial loads, being able to offer partial loads gave him the edge he needed to win more bids and to differentiate himself from his competitors.<\/p>\n
Now it may seem like Bob\u2019s solution should have been obvious, but because the practice of full loads only was so ingrained in the industry, it was overlooked.\u00a0 So as you think about ways to differentiate yourself, think about time-honored practices in your industry that don\u2019t work to your customer\u2019s advantage.\u00a0 Think about things people dislike about doing business in your industry, and then be the company that does those things differently.<\/p>\n
If you\u2019re trying to stand out in your market, stop selling your stuff.\u00a0 Nobody\u2019s interested in it.\u00a0 But they do want, and are willing to pay for, smart, well-crafted solutions to their problems.<\/p>\n","protected":false},"excerpt":{"rendered":"
It\u2019s always been tough to differentiate ourselves in the marketplace, to give customers reasons they should do business with us instead of our competitors.\u00a0 And now thanks to the internet, it\u2019s gotten even tougher.\u00a0 At one time, there was some mystery, some mystique about what we did and how we did it.\u00a0 No more.\u00a0 People<\/p>\n