Standing Up To Commoditization

A common complaint in our industry is that it's tough to differentiate ourselves because commoditization is rampant. I have always looked to the advertising industry for inspiration as I respect their ability to sell their creativity more effectively than we can in the promotional products industry. Marketing buyers treat us differently. In general terms, promotional companies sell products while ad agencies sell ideas. The division, whether it's valid or not, is pretty clear in most marketers' minds.

However, ad agencies deal with commoditization too. I was interested to read this article in an ad agency trade publication that discusses the specter of commoditization in the creative industry. While marketers often line us up to compare the costs of a Gildan 5000 Tshirt, they are also doing the same to their ad agencies, except it's the idea that becomes commoditized. I was surprised by this.

This passage best sums the key point in the article:

“Work” isn't what we’re selling. We’re selling ourselves: a group of creative, problem-solving people we’re asking a client to trust, respect and pay some kind of premium for (or we are commoditizing ourselves by default).

I don’t care what segment of the industry a firm may be in (advertising, promotion, experiential, consumer research), its business is making clients love working with them, love walking in the door and, when they leave, feeling better than when they arrived.

How can this be applied to our industry?

1. Invest in your brand. We all know that people buy from people they like. The most successful distributors will be able to infuse their personality into their brand. Having a strong brand in our business is one of the best defenses against commoditization. Kamran Popkin of Swag Club has done a really good job of building an incredibly unique brand in our industry.

2. Invest in your people. Make your people smarter through training and education. Also invest in their happiness by giving them a great environment in which to work. Challenge them to be better and help them reach their goals. Happy employees are one of the most effective weapons we can employ as distributors in the fight for market share. Brand Fuel is a great example of a distributor that takes its happy people strategy very seriously.

3. Stand up for yourself. We no longer let purchasing departments dictate terms to us at our company. Before we take on a client, we tell them that they are hiring us an agency partner that will deliver a full branding and product experience for them. We are not interested in working with clients that put out elaborate RFPs where the lowest price wins. It may be harsh and this likely limits some of our business opportunities, but the business we do work on is high quality and lots of fun for us and the client.

How about you? What do you think about commoditization and how have you been able to differentiate yourself in this fragmented industry?

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