In a previous post I defined commoditization. But what causes it? The answer to that question is critical to building a highly profitable, fast-growth business.

Substitution is the cause of commoditization. How easily one offering can be substituted for another determines how commoditized something is. The reason Microsoft is able to sustain their amazing profitability is because, like them or not, you cannot replace them.

So, what if you’re a company that doesn’t have Microsoft’s market share? No problem. Just focus on the parts of your offering that absolutely cannot be replaced. In my consulting practice I focus on the proprietary business development model we have created and how that process uniquely addresses a client’s situation. Sure, it would be easier for me to focus my marketing efforts on the “features” and “benefits” of what I offer, but those are exactly the things that would make my consulting practice just like everyone else’s. Here’s my suggestion -- Look at your advertising, sales and other marketing programs. Where is your focus? Is it on the things that are easily replaced, or is it on the unique approach, skills or wisdom that you bring to the process? As you read through your marketing and sales materials, ask yourself, “Could anyone else say this about their company?” If the answer is, yes, then get to work. Because if you can’t communicate what is unique and irreplaceable about your company, you’re on the fast-track to commoditization.

To learn more about how to avoid commoditization visit our web site or call me at 410.544.7878.