Transform Your Company from a Low-Margin Commodity-Based Business to an Innovative Solutions Powerhouse!

Alright, commodity producers—this one’s for you. I know you’re constantly sweating those low-margin profits, battling over pennies, and getting hammered by foreign imports and low-cost producers. It's a tough fight, and I get it. There's always that one competitor in the market that no one can figure out—how are they selling it so cheap? Here’s the brutal truth: they probably aren’t. They’re losing money just like you, dragging the entire market down with them. The result? No one makes money. Everyone races to the bottom, trying to see who can outlast the others, but what good is a race where the finish line is going out of business?

It doesn’t have to be this way. You have options, and believe it or not, marketing holds the key to unlocking those opportunities. Yes, that’s right—marketing.

Marketing Teams: You Hold the Keys to the Future

Here’s a shout-out to all the marketing teams, professionals, and leaders out there. You might not know it, but you hold the keys to your company’s future. Yet, far too often, we’re too focused on the next clever ad campaign or the hottest social media trend to do anything that fundamentally changes the business. It’s like we’ve been boxed in, relegated to the fourth "P"—promotion—while we forget about the first three: product, price, and place.

It’s time to change that mindset. Marketing has to be at the forefront of innovation in all aspects. You need to take your rightful seat at the table and start influencing not just how your company is perceived, but also how it operates, innovates, and connects with customers. Marketing isn’t just about running ads; it’s about shaping strategy. It’s about innovating in every aspect of the marketing mix. If you’re in the commodity business, you have a chance to drive that change—and it all starts by shifting focus away from just trying to push the same old tired products out the door.

The Challenge with Commodities

In the commodity business, there’s a common story I hear all the time. Companies have no real idea where or how their products are being used. They’ve got layers of distributors and dealers between them and the end users. They produce something, ship it out, and once it leaves their facility, that’s it—they lose track. This is exactly the wall that needs to be torn down.

You have to build a direct connection with the end users of your products because that’s where the gold lies. The people using your products day in and day out hold the insights and feedback you need to improve your offering, differentiate yourself from the competition, and drive real innovation.

Connecting with End Users: Where the Magic Happens

So, how do you do it? How do you break down that wall and build those connections? Start by figuring out exactly where your product is being used and who’s using it. This is the heart of a customer-centric approach, something many companies in the commodity space desperately need to embrace. This isn’t just some fancy corporate jargon—this is about the voice of the customer (VOC), and trust me, it’s everything.

Here’s a tip: this process can be as simple or as complicated as you want to make it. You don’t need to hire a massive consulting firm or overhaul your entire business overnight. It starts with something basic—get out of the office. Take off your dress shoes, put on some work boots, and get a little dirty. Visit job sites, manufacturing plants, factories—wherever your product is being used. Have conversations, ask questions, observe. Really dig into how your product is being used, and listen to what your end users are saying.

You’ll be amazed at the insights you uncover just by talking to the people who interact with your products every day. These insights are often overlooked by sales teams focused on pushing volume or executives concerned with hitting the next quarterly number. But as marketers, we are the ones who can take this information, translate it into actionable ideas, and drive innovation.

Start Moving Down the Value Chain

Once you start connecting with end users, something powerful begins to happen. You start to see patterns in how your product is used, hear about the “hacks” customers have developed to make it work better, and get suggestions on how you could improve it. In every business, time is money. If you can figure out how to save the end user time, you’ll grab their attention—and trust me, when you save them time, you’re also putting money back into their pockets.

When you can approach them with a well-thought-out solution that enhances efficiency or improves their experience, you become invaluable. And here’s the kicker—once you start offering a value-added solution instead of just a commodity, you eliminate the competition. Your sales team will love you for it, too, because they’re no longer getting beat up on price. Instead, they’re selling value.

The Power of Innovation: Higher Margins and No Competition

This is where the magic really happens. The beauty of driving innovation is that your company can participate in the cost savings, too. You’re no longer competing just on price. You can charge more for your products because you’re offering something that solves a real problem, not just another widget.

I’ve personally seen companies that struggled to crack a 5% gross margin raise that number to over 50% by adding innovative solutions. It’s not magic—it’s a matter of shifting focus. Too many companies are laser-focused on top-line growth, chasing revenue numbers or squeezing pennies to improve margins on the same old tired products. But let me tell you, those same tired products—the ones that got you to where you are—are not going to take you to where you need to go.

This is the moment to leverage what you’ve built so far and pivot into a solutions provider. Commodity products got you here, and that’s great. Now use that strong foundation to evolve your business into something more—a provider of innovative, value-driven solutions.

Where Do You Start?

So where do you begin? Start by understanding your customers better. This could mean launching a customer-centric marketing initiative, setting up focus groups, or simply picking up the phone and asking questions. As you begin to collect this feedback, you’ll uncover opportunities to innovate and improve. Maybe there’s a particular product that’s just waiting for a redesign, or maybe you’ll discover an entirely new way of packaging or delivering your service that’s more efficient for the end user.

As you dive deeper into vertical markets, you’ll start to see patterns emerge—common pain points, inefficiencies, or opportunities for improvement. These patterns are your roadmap. If you can innovate in a way that saves the end user time, increases their efficiency, or simplifies their process, you’ll have something that no one else is offering.

The Final Word: Time to Innovate

This is not the time to stay stuck in the past, doing business the same way it’s always been done. It’s time to innovate. As marketers, we need to stop viewing our role as just the people who create ads and social media content. We are the ones who need to drive change by gathering insights, understanding our customers, and leading our companies into the future.

If you can create a product or solution that’s truly innovative and solves a real-world problem for your customer, you’re going to make an impact. You’ll increase margins, reduce competition, and position your company as a leader—not a follower.

So, what’s it going to be? Are you going to keep racing to the bottom, or are you ready to make the leap and start innovating?

Article written by Gary Baltz 30-year marketing, sales, and product innovation specialist. If you want to know how Gary can help you transform your commodity business into a solutions powerhouse, DM or email at [email protected]