We all know that being a commodity is the kiss of death in business.

The second you start to sense that sales prospects are viewing you as a commodity, you’re on the cusp of business failure, unless you immediately embark on the proactive actions that I’m going to prescribe to you below.

The Problem

Before we get to the cure, let’s understand the malady a little better. Commodities are purchased on price and price alone. In commodity markets, much to the dismay of sellers, lowest price always wins. Profit margins erode quickly as competitors race to the bottom.

Buyers love to make you think you are a commodity. If a buyer can get you thinking that you are a commodity, then they’ve got you into a mode that they adore — a mode where you are going to drop price to get their business.

Even if they know you are not a commodity, they may hand you over to Procurement, which is essentially a death sentence for sales people. It’s a cruel mind game played by some buyers: “I know you are not a commodity, but I’m going to treat you like one so that you behave like one. I was going to buy from you anyway, but this way you’ll give me a much better price.”

On a quick tangential but related note, I have a friend who owns a business and he has a VP of Procurement named Steve. On a daily basis, however, they call Steve the “VP of Nobody Makes Money But Us” because that’s essentially what Procurement does. Given a spec, they try to buy for the lowest possible price. They could care less if you make any money, with the exception being that they might throw you a small, barely edible, profit margin bone if they need you to stay in business long enough to fulfill the next order.

In this tough economy, mind you, Procurement departments are busier than ever. Sales are down for many companies and there’s pressure on profits on all fronts, so buyers — your customers — are doing something that is completely logical on its face: in order to improve their margins, they are shuffling purchases over to Procurement and telling them to get it for a lower price.

Whereas you used to be able to wine and dine the head of a business division to get business, you now find yourself talking to some low-level flunkie in Procurement. Even worse, you’re not talking to Procurement, you are interfacing with them. Maybe you’re asked to sign up for their new reverse-auction bidding system and submit your prices, or maybe you’re asked to send in an RFP, without ever being given the chance to meet with any human beings.

This is the predicament. If you are not in it now, it may just be a matter of time. So what should you do to avoid the RFP and reverse-auction death traps?

The Solution

There are three things you can do to avoid playing the reverse-auction game:

#1 Define your differentiation and its value to your customers.

What is that you have that the guy who might underbid you doesn’t have? List out all your points of differentiation and assess their value to your customers (ideally based on customer and prospect input). In order for you to avoid being viewed as a commodity, your incremental value, relative to the competition, has to exceed the money your customer would save if they went with a low bidder. In other words, you can’t just say your offering is not a commodity. You have to prove that the non-price attributes of your product are worth paying a premium for. As simple as it sounds, many companies struggle with this exercise. Get help if you need it.

#2 Inoculate yourself against the procurement curse.

If you are lucky enough not to yet be viewed as a commodity, you need to invest in protecting that edge. If you believe you are not a commodity based on your differentiation, then it’s really a marketing exercise to convey that to prospects. If you know it, it doesn’t matter. The world has to know it. Whatever it is that makes you not a commodity has to be driven home in the minds of the prospect as something that they cannot live without. The usual marketing tools apply: case studies, testimonials, sell sheets, PR placements and product reviews in the media, and relationship selling with face-to-face discussions. The messaging has to make the case that there is more to your offering than price. Moreover, get the message out that if a prospect just purchases based on price alone, they will likely suffer some significant pain of some kind.

#3 Call their bluff.

If it’s late in the game and you’ve been complacent, you may already be viewed as a commodity by buyers. In this case, you need to try to convince Procurement that, with respect to buying your product, they need to be more thoughtful than they are being. In a subtle way, you need to make them realize that they will fail if they proceed with their current plan of buying based only on price. They will get fired, the business will fail or have a crisis of some kind, or profits will be down, for example. Raise enough credible pain scenarios to make them double-think the reverse auction approach to buying.

To have this discussion, you can go to Procurement directly to try to get an audience or you can work with the business line contacts to get them to influence Procurement. There are pros and cons to either approach. The best case is to have Procurement and your line-of-business contacts all in the same room. If there’s an RFP or bid process, you don’t want to just respond to the bid; you’d want to contact Procurement and the ultimate consumers of the process, and say “We’d like to schedule a meeting to ask a few questions about the bid process and the requirements.” If you can get that meeting, that’s your chance to make as strong a case as you can that they’ve written the specs wrong — i.e. they’ve forgotten the features you have that competitors don’t — and making it painfully clear to them that if they just go with the lowest bid, there will be hell to pay in the future.

Key Lessons

There’s a reason our Chicago marketing consultants spend a lot of time helping clients to define their value proposition and their competitive differentiation. In markets that are nowhere near being commoditized, it provides an edge over the competition. But in markets that have the potential to be commoditized (and you may be closer than you think to that unenviable fate), defining differentiation that is highly valuable to customers is not just essential to win business — it’s critical to ensure long-term survival.

In the last two years Walker Sands has more than doubled, causing us to completely rethink employee professional development.

Account Executive Julie Walsh launched the program in October with a personality assessment. Since then the company has met every month to tackle a new challenge. So far our sessions have covered:

- Understanding One Another: MBTI – Communication is critical, so we started with a Myers Briggs assessment to determine the different personality types at the agency. Today the matrix of everyone’s communication style hangs on many people’s bulletin boards. Take the test yourself at http://bit.ly/RYWA9.

- Setting S.M.A.R.T. Goals – Important for both our clients and our personal lives, Julie took us through a session to define Specific, Measureable, Attainable, Realistic, and Timely goals.

- The Attributes & Enemies of Good Writing – Ken Gaebler, CEO, led an interactive session that covered a number of key writing strategies as well as basic topics like the pyramid approach.

During meetings, participants also discuss the Walker Sands’ Challenge. This program challenges Walker Sands’ employees to come up with a solution to a problem they see within our firm. It could be as simple as a new conference room decoration or as complex as restructuring our SEO services.

So far, response has been phenomenal, with great idea sharing occurring during each session. Upcoming sessions include Managing High Touch Clients, How to Present like Steve Jobs, and The New Business Process. If you are interested in learning more, Julie is sporadically blogging about the topics on this blog so come back to check out her posts.

Got another idea for sessions that a firm like ours should cover? Leave them in the comments.

In our last move, we uncovered years old reports (archeologist style) from filing cabinets, desk tops, and flash drives. Strata of old paper reports came crashing down as we moved some people’s (John’s) desk. I decided to take a look at these reports and see how the SEO world has changed in the past few years, how we’ve changed our approach, and what exactly people did around here before I started.

Things have really changed in the SEO industry. Used to be that SEO was like alchemy, you’d talk to a client, tell them you could turn lead into gold, show them some shiny bits of metal, and they would leave convinced. This made it easy for low quality providers to take advantage of clients and made it difficult for hard working agencies to prove their worth.  Not enough people (clients or SEOs) knew the right metrics for explaining what was happening and how things were working.

Alchemy turns lead backgrounds into gold?

So we tried to find all sorts of ways to tell our partners what was working and what wasn’t. But that means the report slowly grew to where it is now: 14 pages of detailed information. (If you’ve never had the pleasure of going through a Walker Sands SEO report, you’re missing out.)

Enough of my rambling, let’s get started. I’m looking at 3 reports for the same partner. One from 2009, one from 2010, and one from just a few months ago.

2009 was a simpler time. Like film from the before the era of Technicolor, there is almost no color and graphs are hard to come by. And it printed in landscape, which should only be used for March Madness brackets.

Perhaps not the most visually interesting report

But the skeleton of the SEO report was there. We reported on over all traffic, how much of that traffic came from organic search using what keywords,  and what pages got visited and landed on.  These are still important parts of our reports.

This particular report also includes a bit of data that has floated in and out of reports since the beginning: the industry-wide search trend. John and I really like this data, but it is, without a doubt, the most irritating piece of data to gather. So we pull out that chart when we think it’s needed, and then we have a very special episode of the monthly SEO report.

This report looks like it took an hour to put together, doesn’t it?

This nine page report gave a lot of information, but the story it was trying to tell was hard to follow. Over the next year, we (meaning John) refined the report and took us to SEO REPORT 2.0.

A lot changed in 2010. Google updates made rankings (an already tricky thing to report on) even less valuable by providing every user with their own personal results page. Now what was #3 for you might not even show up in my top 10.  Rankings went from something we would report on quarterly-ish, to something that we didn’t report on at all.

How did the rest of the report change? Well, it went from focusing as tightly as possible on search information to including some larger picture data. Instead of only covering search traffic, we detailed all major sources of traffic including direct, referrer, and paid traffic.

In my mind, the biggest addition was talking about keywords and landing pages. In a lot of ways, this is the Walker Sands replacement for rankings. We tell you how many different keywords are driving traffic to your site and how many different pages that traffic landed on. When you’re on a content-creation driven SEO program, this is a strong indicator of how successful the program is and whether the tactics are working.

Part of this changing keyword data included marking off whether the top keywords were branded or non-branded. This might not sound like a big deal, but branded searches should always end up at your site, so knowing what non-branded keywords are driving traffic will inform you on how search engines and users see your site.

Goals also show up for the first time in 2010. Are the people who are getting to your site converting? Now you know. If you’ve never lived without knowing conversion data, you don’t know how big of a change this was.

If you aren’t incredibly bored already, next week, we’ll have a blog post about what changed in 2010 and 2011 and how the report changed with it. Hopefully, we’ll see you then.

It’s a new year, meaning it’s time to get crackin’ on those resolutions that seemed like such a good idea last week.  Like millions of others, I made a list of resolutions that I hope to accomplish in 2012, and also like millions of others, I’m beginning to feel like that list is a little daunting – and it’s only day 3.

Enter the iTunes App Store. Knowing that average folks like you and me have trouble keeping up with our New Year’s resolutions, the geniuses at Apple crafted a new addition to the App Store last year: a section entitled New Year, New You. Now it should be easier to make – and stick to – those New Year’s goals.

Over the next few weeks, I will be testing out two apps from each category of the New Year, New You section of the iTunes Store to discover which work best for keeping New Year’s promises, be it in terms of health, lifestyle, finances, or time management.* I will then review each app because, let’s face it, by that time we’ll probably all need a reason to recommit to our resolutions.

The apps I will be reviewing include:

Health -

Nike Training Health Club: According to the App Store it “Gives you your own personal trainer anytime, anywhere.” (Yikes!) It includes 130+ drills and allows users to listen to music and track progress, among other features.
vs.
DailyBurn – Personalized Fitness Evolved: DailyBurn is a little different in that its users track both fitness and nutrition (Bye bye, delicious chocolates sitting on the countertop in the Walker Sands kitchen). Like Nike Training Health Club, DailyBurn provides users with advice and videos from personal trainers to get fit.

Lifestyle -

Bloom: My friends at Apple tell me that Bloom “inspires you to live every day to the fullest: Reminders to make healthy choices, stay connected with others, manage stress, strengthen your spirit, save money, advance your career, and enhance your creativity.” That sure sounds better than an anytime/anywhere personal trainer…
vs.
TED: TED is an acronym standing for Technology Entertainment and Design. Its app provides users with access to educational conference videos. Though this app is much different than Bloom, it will be interesting to see if one sticks out over the other as far as enhancing lifestyle goes.

Finances -

Mint.com: Mint helps you manage your money by securely accessing your banking information. It sends out email updates that summarize where you’re spending the most money.
vs.
Pageonce: Pageonce promises “financial peace of mind” by allowing users to pay all bills at once.

Time Management -

Wunderlist: Wunderlist lets people share and sync to-do lists on its cloud-based platform. My first to do: emotionally prepare myself for seeing my Mint spending summary.
vs.
Orchestra To-do: Orches tra has been named the “Productivity App of 2011.” It helps users remember tasks to accomplish and assign tasks to others, regardless of whether or not they own the app.

Have you tried out any apps that help you stick to your New Year’s resolutions? I invite you to try this experiment along with me. You can visit the iTunes App Store for more information about compatible devices, or, feel free to try out apps on other mobile platforms and suggest them to other readers in the comments below.

*Note: because one of my resolutions is to watch my spending, I will only be downloading the free apps.

The days left in 2011 are fleeting, which leaves many thinking about auld lang syne and the year ahead. This is a particularly special time for the world of public relations, as it is no secret that we love trends and prediction stories. So, what’s next for the world of PR? Here is what some of the Walker Sands PR professionals think will be big in 2012:

“Journalists will increasingly turn to social media, particularly Twitter, to research stories and even look for sources. The result is that company representatives and spokespeople need to be accessible through these channels, or at least provide alternate contact info on Twitter bios, LinkedIn profiles, etc. “-Andrew Cross, Media Relations Specialist

“More publications will shift further to the Forbes ‘contributor’ model. I’m thinking Fast Company will highlight their expert section more and Inc. and Entrepreneur will shift further. We might see more reader contributions on WSJ.com and NYTimes.com as well.”-Will Kruisbrink, Account Executive

“The death of traditional press releases. I’m hoping we no longer see ‘a leading provider of ___ solutions’ followed by jargon that means nothing, and more straightforward, conversational content that actually gets the point across. Also, I think services like HARO are going to become more utilized by reporters. I’ve heard of reporters starting their own version of HARO and I wouldn’t be surprised if that continues. Since there are so many less reporters trying to cover the same amount of stuff, they have to turn to tools like that for sources.”- Jackie Lampugnano, Senior Account Executive

“The PR industry will experience a paradigm shift with C-Suite executives in 2012. With business schools like Dartmouth’s Tuck School of Business and others incorporating public relations classes into their MBA core curriculum and PRSA’s series of webinars on the Barcelona Principles of measurement, the PR industry will make major strides in demonstrating its value in 2012.”- Julie Walsh, Account Executive

“Death of the Infographic: Rise of Infographic 2.0 – Infographics have saturated electronic media and a backlash against their use is forming. If it hasn’t happened already the use of infographics as we think of them now will jump the shark and you’ll begin seeing resistance to publishers wanting them. Yet, the core concept is solid and simplifying complex information isn’t going away anytime soon. You’re already seeing the seeds of more interactive infographics that move and twist based on what you do with them. These will only become more popular as infographic fatigue sets in and technology allows the proliferation of these more advanced data presentations.”- Mike Santoro, President

I wish you all a happy holiday and many successes in 2012.

*Note: A visual representation of 2012 was not included in this post because they were all “doomsday scenarios.” I think we can be more uplifting than that.

Cheers!