Induron President Comments on B2B Sales Insights for Commoditized Markets

where did all my peers go?Induron Protective Coatings President Davies Hood recently sat down with Forbes contributor Larry Myler to discuss the challenges of a commoditized market. Check out the interview below and the original article published in Forbes here!

Larry Myler: Davies, you’ve been at this for a long time. What is the most direct way you have been able to counter the sales efforts of competitors who offer similar offerings?

Davies Hood: Our first line of defense has been our product line itself. There’s always a minimum level of product quality and performance necessary to compete, but winning more deals requires that our products not just be different, but that they do something different in a monetary sense. We’ve had to concentrate on innovation that satisfies our customers’ financial goals. There’s always an economic calculation to address.

Myler: And how has innovation translated into a better bottom line for your customers?

Hood: We are not normally the low-cost provider, but we have created products that cost less overall to use. What I mean is that some of our products can be applied in one coat, instead of two or three. The second and third trips to the top of a 200-foot tower can get pretty expensive. When a lower labor cost is considered, our overall solution is more appealing.

Myler: Do your prospects intuitively understand that the ultimate cost of using your product is lower, even though the price per gallon may be higher? Don’t they normally compare only your product against other products, without the labor cost figured in?

Hood: That’s one of the most important practices we have employed along the way. We need to make it clear for them, so we do the math. They can then verify the numbers quickly themselves.

Myler: How else have you learned to sell value rather than price?

Hood: We help our customers focus on the value of the assets they want to protect. For example, we often use the phrases ‘protecting infrastructure,’ and ‘where there’s steel there’s corrosion.’ When compared to the cost of maintaining or replacing expensive electrical transmission towers, a utility company finds our proposition to be extremely valuable. If we can help extend infrastructure life by 20 or 25 years, our solution becomes an investment not an expense.

Myler: What is the cost of competing on price alone?

Hood: Price wars always start a race to the bottom. Profit margins must be sustained in order to continue to grow and innovate. In the end, our customers win when we can continue to evolve to meet their needs. I’ve always believed Benjamin Franklin’s quote, ‘The bitterness of poor quality remains long after the sweetness of low price is forgotten.’

Markets tend to commoditize over time. Differentiate your offerings by competing on value instead of price, doing the math for your customers, and avoiding no-win contests to see who can be the first to go out of business.

In addition to being a  Forbes contributor, Larry Myler is a CEO By Monday, Inc., adjunct professor in the Rollins Center for Entrepreneurship & Technology at BYU and the author of Indispensable By Monday. The original article, B2B Sales Insights for Commoditized Markets, was published on Nov. 7, 2017. For more Induron insights on commoditization, check out Consolidation in the Coatings Industry: Where Did All My Peers Go? and Consolidation in the Coatings Industry: Where Does this Leave Induron?

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