Hugh’s Wisdom – Beware the Commodity Trap

This post is by Michael Pollock, the original owner of Small Business Branding. Yaro Starak now owns and produces the latest content for this blog.

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As ususal, Hugh can say so much with only a few words, and I was struck by his latest nugget of unconventional wisdom. Conventional wisdom suggests that before someone will buy a product/service they have to understand what it is and what it will do for them.

Take mp3 players, for example. When they first arrived on the scene, few people knew what they were and what they did. If you ask the ordinary person today, still a good 30-40% (?) have, at best, a vague idea what they are and what they do. And that’s mostly due to the iPod phenomenon.

Are mp3 players half way (or more) to becoming a commodity (i.e. purchased based upon the best features for the lowest price)? I’d say so. After all, Walmart carries a wide selection of them, and you know it’s a commodity when Walmart sells it. iPod, however, still sells at 10-50% premium over comparable models. Not quite a commodity yet, but as Hugh said, half way there. It all makes a solid case for the innovation mentality. Creative destruction and all that.

The real question for solopreneurs is how do you get people to understand what you do and the benefits you provide and still be memorable? Once people understand what you do, how do you avoid the second leg of the journey to becoming a commodity – the best service for the lowest price?

I have a friend who graduated college with a graphic design degree. In the midst of his frustrating and extended job search, he would frequently say to me "graphic designers are a dime a dozen." And it always made me wonder what you folks do to avoid being a commodity? How do you command a premium for your work in such a competitve field? I have my own ideas, but I’d like to hear from you.