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Offline Marketing Experts HELP: How do you market commodity products?

by Peter Helps
13 replies
Hey guys,

I am looking at a possible offline client who is selling commodity type of a product where there is a fierce offline competition with a commodity product that has a very low profit margin.

I proposed to them an online marketing plan with a lead generation funnel so they can build a list, relationship, trust and then sell those subscribers into buyers.

However, I'm having a hard time convincing them that this is the way to go.

So, I have a question to all of you out there, the offline experts. Have you ever worked with a client who sold a commodity product with a very low profit margin? If so, wha was your strategy?

How did you sell them? These guys know the have to be online, see the value but they are not 100% sold on the idea that Internet marketing will explode their business.

Thanks everyone in advance,

Peter
#commodity #experts #market #marketing #offline #products
  • Profile picture of the author Doug Slaton
    Risk removal is a good solution for tough clients.

    Get a pay-as-you go phone, buy $10 or so worth of minutes on it and leave it with the client (just as a loan).

    Setup a free email that the potential client gets the login for.

    Now get busy and do some marketing. Don't play your best cards or do anything you can't undo in case they balk at signing on.

    You didn't say what the product is so this idea could be a major bust but for the right client it really converts. Create an HTML ad for Craigslist with a picture (hosted at Photobucket), hand over the Photobucket login so the prospect can check the stats on how many times the picture was loaded.

    Of course picture loads indicate how many people actually click on the ad. Be sure to repost the ad every 48 hours, as allowed, so the results will be there.
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  • Profile picture of the author Peter Helps
    That's a very interesting idea Doug.

    I can't disclose the product but like I said, there is not much profit margin there.
    Their website is not very good and i don't think it converts.


    Thank man,

    Any other ideas? Their big hold up is that they don't have much of a USP.
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  • Profile picture of the author Peter Helps
    Hey guys,

    Shirt update on my question above. I was talking to someone who does some biz marketing and he suggested that in order for a successful online marketing selling a commodity type of a product that has a very small profit margin, I Gould add some kind of extra incentives, sort of like bonuses.

    What do you guys think? Do you have any suggestions? Thank you,

    Peter
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  • Profile picture of the author Steve Peters Benn
    Hi Peter,

    I have an awful lot of experience with commodity products through uk retailers. Are they selling through a retail location?
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    • Profile picture of the author Peter Helps
      No, this isn't sold thru retail locations. This product is sold directly to the consumer. Right now, most of their consumers are commercial businesses but they are looking more into residential consumer.

      It's not sold in stores. It couldn't be, well maybe but not in a physical form. It's not a product you can pick up and touch.

      Peter




      Originally Posted by Steve Peters Benn View Post

      Hi Peter,

      I have an awful lot of experience with commodity products through uk retailers. Are they selling through a retail location?
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  • Profile picture of the author MichaelHiles
    The best discussion about commodity products is the old classic book, "The Marketing Imagination", by Theodore Levitt.
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    • Profile picture of the author JohnMcCabe
      If the market for the commodity is super competitive, and the profit margins very slim, it's going to be difficult to offer incentives or bonuses.

      A) It will cut into already slim margins and
      B) It's as easy to copy as a price war.

      What you really need, if such a thing is possible, is an angle to take the commodity product out of the commodity market and move it into a premium market with better margins.

      Perry Marshall tells a story about a client of his who was in a brutally competitive commodity market for a certain construction material. The client added a layer of service, marketing the material in pre-cut sizes that fit the contractors' vehicles. Not only did the client realize higher margins, they attracted more business away from their competition. Contractors paid a higher price for the commodity item, but more than made up for it in lower labor and transportation costs.

      Look for something your prospect could add to the product without adding to their costs, something that sets them apart from the other players in the market.

      It's a place to start...
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  • Profile picture of the author Nickolie0990
    I've always heard that commodity products have extremely hard to over come objections. So I've always stayed away form them.
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    • Profile picture of the author Roy Penrod
      I don't know if this applies to your situation, but you could try picking your client's brain and see if there's a way you could give value to the customer through education.

      You could create some pre-sell material on how to best use the commodity product, or answer the 10 most common questions your client receives about the commodity product.

      Just taking this extra step could help set your client apart.

      Roy
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  • Profile picture of the author Don Schenk
    Peter, about 100 years ago, copywriter Claud Hopkins had the same problem trying to advertise Schlitz Beer. He "invented" pre-emptive marketing, and tells the story in his book "Scientific Advertising."

    I tell the story in "Profit Thief #1" in the free book in my sig. It's a start.

    I really like John McCabe's example of finding a way to differentiate the product.

    And, Dr. Lisa Lang gave a presentation at Stompernet Live about a lable printing company that differentiated its commodity product (lables) by setting up a system of keeping the customers' files ready in a computer so customers could order small quantities at the price of large quantities, get the lables quickly, and save time and money because they didn't need to order 6 months worth of lables the way they would if they went to the printer's competitors.

    The printer's competitors were not willing to do this, and he took away a lot of business from them.

    :-Don
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    • Profile picture of the author Peter Helps
      That's a great example Don. I appreciate you commenting here.

      Your idea got my brain going. My issue is that this is a mass product but it's not a physical product you can touch.

      It's like selling electricity, you can't touch it, everyone needs it and the profit margin is so tight that it's hard to get a competitive advantage.

      One of my ideas was to partner with another company and bundle the product/service at a reduced price. That way, the consumer would go with them because they need both products/services and they won't have to pay as much if they went separate.

      Any other ideas guys?

      Peter
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      • Profile picture of the author JohnMcCabe
        A good bundling arrangement could be a really good fit.

        Even though Verizon is pushing hard with their FiOS product, they have a marketing partnership with Direct TV so they can still offer bundles to people where FiOS is not yet available. The offer has been there for so long that I assume it's working out for both sides...
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  • Profile picture of the author getsmartt
    Peter, I'm not 100% sure that online marketing would explode their business either.

    They are selling a commodity a you stated, it is your job now to figure out how to market that commodity to an online audience and sell the marketing plan to them.

    If the market is as competitive as you/they say, then you have to figure out a way to differentiate their offering from the hundreds/thousands of other offerings.

    Is there any way to market it as a premium offering? Maybe the product cannot be premium, maybe it would have to be the customer service, or the delivery method, or maybe it is just "branding as a premium" (think Black Angus Beef or Red Delicious Apples, neither of which are the best offerings, but are perceived as such through great marketing).

    Figure out what makes their offering premium, then figure out how to sell it. White Papers are a great idea for this. If they have a unique aspect to the business model, exploit it. Maybe they even do something that everyone else does, but no one else advertises it, capitalize on that (think Yogurt, all yogurt has pro-biotic cultures, but only Dannon has "Bifidus regularis", not necesarily because it is unique to their yogurt, but because they trademarked a name that sounded medical and applied it to a pro-biotic culture).

    But, They still know that the online world will not explode their market, and so do you and I, you do not need to sell them on the explosion, you need to sell them on "ripple"...lets drop a small stone in the great internet pond, and watch the ripple of sales slowly build as you build your premium commodity service.

    JMHO

    James
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