Breaking Free from Commodity Pricing


Is your pricing strategy:

1. New Customer Discount?

2. Old Customer Discount?

3. New Product Discount?

4. Old Product Discount?

5. Loss Leader?

6. “Can't afford it” discount?

If any of these are representative of the way you think you are “providing customer service”, where else in your life are you a Discount provider? Marriage?  Parenting? Friendship?


Here’s the back story:


A commodity is defined by Cambridge as” a product that is the same as other products of the same type from other sellers.” If the only way that you can get a customer is by participating in race to the bottom, you are teaching your customer one single thing:


You are ALWAYS willing to give them a bargain


There are only two wars in a Commodity price game- the lowest price producer and everyone else.


Next Generation CEOs have long since figured out that we don't want to be in a price game. We want to lead with value and ensure there is no doubt that our service is at the top of the market- both in quality and price.


This single PAINFUL lesson taught me to NEVER undercut my own service


Early in my entrepreneurial career I was hungry for new customers. I was wildly confident in my service because I knew I could deliver 10x transformation. In fact, that has never changed.  If I am going to sell something for $1,000, I know for a fact that my client will receive greater than $10,000 of value


But here’s where I went WAY wrong….


In my thirst for a new client I found a prospect, gave the value proposition, crushed the objections, made the offer and gave my price. Then, like every single client I have had since then, they said….


“What can you do for me on price?”


And instead of saying one of many very plausible responses that communicated just how much value I was going to provide them,  I simply said “I’ll give you a 20% discount”. Then, I had to deliver- to one of the most ungrateful clients I have ever had. The loyalty existed only one way and they always acted like they had gotten me




The reason it was so bad had nothing to do with me and everything to do with the fact that transformation wasn’t actually possible for this client.  Just because I squeaked my way into their “price range” doesn’t mean they squeaked their way into my “quality range”. In the end, they just weren’t ready for the depth of material I gave them and we were both left very disappointed.


Ever since, I have been crisp and crystal clear in the exact value that I will bring to every transaction and defended my prices like I was protecting a puppy from an alligator!

Never, ever, ever have to defend your prices again and never think twice


As a service based business owner you often times feel like an embattled entrepreneur, the punching bag (if you will) in your business.


Many other business owners felt that exact same way until they realized the root of many of their problems was not defending their prices. As you’ll be able to see in about two minutes, that journey isn’t one you have to walk


There are three core focus areas that you MUST develop in order to move away from “commodity” pricing and into a Blue Ocean.


First, what is commodity pricing?


It’s a structure where you compete with other service providers solely on price


Second, what is a blue ocean?


A blue ocean is clean water, out past where the sharks have churned the water and turned it red from all the competition playing a pricing game.


So, what can you do about it?


Pillar #1- Create your three uniques


The thing you sell (marketing, insurance, mortgage, real estate, MLM/NWM, etc) is the first.  Now add two more pillars that will make you unique. This could be anything from a special method, your customer support, or responsiveness.  What are you willing to do that your competitors won’t. 


Pillar #2- Have a full understanding of your customer


You cannot sell to someone you do not understand.  Attributes and technical descriptions will not move people.  You must first understand the things that truly drive someone, like what they love, hate, or are scared of.


Pillar #3- Communicate constantly about what THEY want, not what YOU provide


You may know your customers may need vitamins, but what they want to buy is painkillers.  Stop trying to sell them what you want them to buy and start selling them what they want.  You can then OVERDELIVER with the thing you know they need.


Have you fully considered the changes that will take place in your business once you have led with value and defended your prices?


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