Last updated on September 12th, 2021. Posted in Increasing Website Traffic.
One of the worst things in business is to be a commodity. Cement...water...vegitables...you get the idea. By being a commodity, what you sell is identical to what all your competitors sell. And it's even worse for an online business.
Here are links and resources mentioned in today's video. Enjoy!
For example, online, information has been commoditized.
So what do you do about this? Well, you've gotta figure out a way to differentiate yourself, to create some kind of uniqueness. If your business is a commodity, you can't compete on quality because the quality of your product is the same as everyone else's.
Maybe you could compete on customer service...but great customer service is easy to replicate. A very common variable that most businesses try to compete on is price. In fact, that's quite often the go-to. The thinking here is, "we'll just lower prices and make it up in volume!"
And guess what? This rarely works. Instead, here's what happens: You lower your price...and rather than making it up in volume like you thought you would, two things happen: First, your competition sees what you've done, and they strike back by competitively marking their prices even lower. So now what?
Are you going to lower your prices even more, cutting even deeper into your profit margins? If you do, you're now in a suicidal race to the bottom...of paper-thin margins. How long can your business survive if you're barely breaking even? Probably not long.
And yet, this is exactly what most businesses do -- they compete on price...which is an unwinnable strategy. But I also said a second thing happens, remember? The second thing that happens is, you attract certain kinds of customers...customers who aren't loyal or respectful of you or your business at all...
...but who instead buy solely based on price. These sorts of customers are saying, "I don't care who's selling it. What I want is the lowest possible price." And as you might guess, price-conscious and price-sensitive customers are some of the worst.
They don't respect you or your time, they aren't buying based on value at all, they complain the most, they're a royal pain to deal with, and they're the most likely to return products for refunds...often damaged. So what should you do? Well, here's a few ideas.
First, don't be a commodity. Second, figure out a creative way to differentiate yourself. Create a strong uniqueness for yourself that no one can replicate. Third, don't compete on price. See, what your pricing really does is it sends a signal to your marketplace. It attracts a certain segment of the market.