A BRIEF INTRO TO COMMODITIZATION AND WHY ALL AGENCY OWNERS SHOULD KNOW ABOUT IT

Let’s do a very quick exercise.

After you read this sentence, I’d like you to close your eyes, and when you do, I’d like you to picture your biggest competitor, as vividly as possible for the next 15 seconds.

………………………..

OK, now you’re back, let me guess what you were picturing. My estimate is you were thinking of one of the following:

1.    You had a specific agency in mind – one that you seem to keep coming up against in pitches

2.    You didn’t have a company in mind, but more of a concept – like a fictitious agency that represents something similar to what you do

3.    You were thinking of fluffy pink poodles – because we all know, when you’re asked to think of something important, instead you think of pink poodles… And if you say you don’t, we all know you’re lying, so don’t bother

Anyway, I’ll cut to the chase…

Whatever you were thinking about, I’m sure you weren’t picturing this:

3

Or this

Three

Yep, the Number 3.

And what if I told you that the number 3 was actually your biggest competitor?

Well, that’s what I’m telling you, and here’s why.

Why is the Number 3 my biggest competitor?

The number 3 in this case is more of a symbol than a quantity. In this case, the number 3 represents Commoditization.

Commoditization:

The act or process of treating something as a mere commodity

And by now, I may be on the verge of losing you, so let me ground this iN something that you are very familiar with – pitches… Otherwise known as RFPs… Otherwise known as Really F*ing Poor Deals (but we’ll address that shortly).

Pitches are situations where a potential (worst still, a current) client decides to ask 3 agencies to fight it out for the honour of completing a project for them. Generally speaking, pitches are a good way of getting new work – as long as you win.

But here’s the issue. It doesn’t matter how damn good your solution and proposal is, at the end of the day, there will come a point where your budget is pitted against your nearest competitor’s.

And here enters the commoditization. Your client starts to compare ‘apples with apples’.

The problem is, there are no apples to compare. Your competitor may have come and proposed a lovely basket of Pink Lady Apples for your client to get stuck into, but you have gone the extra mile. You have created a fully-sustainable, AI-driven orchard that not only maintains its own trees, but also delivers a wide variety of apples every single week, without needing a person in sight.

It’s abundantly clear which solution is better. More importantly, it’s incredibly obvious who’s solution is going to be more expensive. Yet, 9 times out of 10, the client is going to compare your price with your competitors – and what happens next? You’re asked to put together a more ‘optimised cost’ or a more ‘competitive proposal’. The worst request I’ve ever received at this stage – from a very large international company, I may add – went something like this:

“We absolutely love your proposal, and would love to go ahead. We clearly see that your solution is far advanced from your competition. However, your costs are 22% higher than your nearest competitor. Can you work on a way to maintain the quality of your proposal, whilst competing with the costs of your nearest competitor?”

The most infuriating part of all of this is… You can’t even blame the client for asking. This is exactly why they set the RFP up in the first place – to commoditize your wonderful AI-Driven orchard. And this is exactly why – in my book at least – RFP stands for Really F*ing Poor Deal.

So… enough of the doom, gloom and rage… What do we do about this?

How do we avoid solution commoditization?

The simple answer is don’t go in for any pitches or RFPs.

The more complex answer requires that I explain the 3 types of customer.

Three types of customer:

Unaware

Problem Aware

Solution Aware

I’m going to work on the assumption that every client you help has a problem of some sort, otherwise they wouldn’t need you.

In which case, Unaware Clients have no idea they have a problem. They think business is all gravy, and they wouldn’t need your help, even if you were seriously persuasive.

Problem Aware Clients can smell smoke somewhere. They can see signs of a problem – generally in underperformance of some kind – but they can’t locate the fire.

Solution Aware Clients have located the fire and are quickly working on a way to put it out.

Of these three, which is your target? DON’T read on… Have a quick guess and then, have a look.

…………………..

And the answer is:

Problem Aware Clients

And here’s why.

Unaware Clients are hard to sell to. You have to convince them they have a problem, and believe me, it’s very hard to do this without coming across all salesy – and that’s not fun for anyone.

Solution Aware Clients are the ones putting on the RFPs. They’ve located the fire, and realise they need an agency like yours to put it out. They also know that they’ll get a better deal if they put it out as an RFP. As long as you’re in a fairly comfortable financial position, these are to be avoided. Clearly, if you need the work, then go for it.

Problem Aware Clients are your kind of clients. These clients are caught in your sweet spot between knowing they have a problem, and having no idea how to solve it – which is when you step in.

So, how do you get the attention of these Problem Aware Clients?

Great question, let’s get to that now.

Getting Problem Aware Clients’ Attention

The first step here is to know what problem your solving. Many agencies I speak to think they know what problem they solve, but in reality, they know the service they offer.

To do this properly, you need to think from your client’s perspective. What problem do they have in their business that needs solving, and fast?

When you locate that problem, that is the fire. I actually refer to this as the Burning Platform. Every potential client has a burning platform, but very few of them know. What they do see, however, are signs of the burning platform – the smoke. These are otherwise known as Pain Points, or Smoke Signals.

So the second question is:

What pain points are your clients experiencing that indicates they have a burning platform.

Let me give you an example.

Imagine you are a social media content agency.

The Problem you are solving (The Burning Platform you are putting out) is your clients don’t have a cohesive social media strategy. In fact, they do but it’s called ‘Post & Hope’. But they don’t realise this problem, instead they feel the pain points.

The pain points (the smoke signals) they experience are:

1.    Zero growth on social media profiles/pages

2.    0.00000001% engagement on content they post

3.    Zero inbound leads every month

That is a snapshot of a Problem Aware Client – that is your dream prospect.

However, the important point here is not simply to know this, it’s to use it. And once you know your target client’s Burning Platform and Pain Points, you can immediately get their attention.

Your job now is to create as many conversations with potentials clients as possible. Engage them in conversation in any way – talk about anything… the weather, the football, the pink poodle next door… Whatever tickles your fancy.

And when the time is right, ask them the golden question…

What’s the golden question?

It goes a little like this:

Actually while I have you <insert name of Dream Target here>… I just want to ask a quick question… 

When it comes to your <insert name of problem area here> strategy…

Are you experiencing any of these issues:

-      <insert Pain Point 1 here>

-      <insert Pain Point 2 here>

-      <insert Pain Point 3 here>

And wait…

Most of the time, you are going to get a ‘yes’.

Now, to be clear, it’s not going to come out as ‘yes’ – you have to decipher the ‘yes’. But when you do, you are in.

And what do you do next?

SELL LIKE CRAZY?!?!?!?!

No!!

Of course not… What you do next, is you explain that those Pain Points are actually indicative of a bigger problem – the Burning Platform… And as it happens, you can put that fire out for them.

And like that, you’re one step closer to a new client relationship.

So let’s Re-Cap

We started on this journey looking at your competitors, and of course, this article actually has nothing to do with your competitors. Equally, you shouldn’t spend a second’s thought on any other agency.

The strategy is simple.

1.    Know which problem you solve for your clients

2.    Find Problem Aware clients

3.    Get their attention by highlighting their pain points

That’s it – as easy as 1, 2, 3.

Of course, there are other questions such as…

-      Where do we find Problem Aware Clients?

-      What’s the best way to start the conversation?

-      Is there a way to automate this process?

But I’m sure with a little thinking, and a bit more Googling, you’ll work that out.

Or you won’t.

That’s fine too. Feel free to message me, and I’ll point you in the right direction.

But for now, good luck on your quest!

I’ll be back next week, where I’ll be writing about how Nobody Cares About You – seriously I will… But actually that’s a really good thing!

Until then…

To your success!

P.s. Good luck getting those Fluffy Pink Poodles out of your head for the rest of today

About the author

Oliver Duffy-Lee is The Creative Sales Coach, and creator of The Infinity Model. He takes Agency Owners from having very few (and often very boring!) clients, to having a constant stream of leads, and a healthy pool of clients that are exciting to work with.

Hi!

 Olie here…

 Thanks v much for reading. 

Just a quick note, but I’m starting a Case Study Group for a new Programme next week.

It’s specifically designed to help agencies that have had their client work wiped out by Covid. The idea is to get you up and running – within 30 days – with lots of leads and a few new clients.

If you want to find out more, leave a comment with the words ‘Case Study’ and I’ll send you the deets.

Cheers,

Olie