6 Ways to Move Beyond the Commodity Mindset

I was about 25,000 feet up and seated on the right side of the DCH-8 plane. Looking out the window below, I could see beautiful turquoise water and the sea speckled with islands.

The flight was short. Only 30 minutes to reach my island destination.

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I was meeting one of my first business mentors. A man named Kyoji, who had grown up on this island but had spent 40+ years travelling around the world building several international brands and businesses.

As consultants and business owners, you have many ways to enhance the perception of value for your services.

The island he lives on is famous for oranges, a fact I knew about as I had visited this island three times before. But when I arrived, I found something I wasn’t expecting. I’ll tell you about that in just a minute.

After checking into my hotel in the city center, I took the elevator down 13 floors to the street. I had a few hours before meeting my friend so took some time to stroll the streets.

Instantly Got My Attention

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As I walked the narrow lanes and passed by stores, restaurants, small shops, and bars, one place caught my attention.

It’s called Factory 10. A small retail store tucked into the mountainside below a famous castle. The store specializes in and sells products made from oranges – especially juices.

Here’s the interesting thing. An average bottle of orange juice at Factory 10 costs about $25.

Yes, it comes in a nice looking bottle. It’s wrapped in a great design and branding. Essentially, however, it’s high-quality orange juice for $25 when the supermarket down the street sells a larger quantity of a similar product for $5 or less.

I love the idea of this shop. Not because I’m going to buy $25 bottles of orange juice for my daily squeeze – although I did sample three kinds in a tasting and they were great – but rather because this is such a great example of moving beyond the commodity mindset.

Raising the Bar

image3Many years ago, Tropicana took orange juice to a new level with its branding, marketing message, and advertisements. The company developed a solid product and charged a premium for it.

Factory 10 has done much the same – it has raised the bar.

The question to explore here is, “How can you differentiate your product or service and charge a premium for it?”

In this case, orange juice earns a 500% premium or more than its competition for a product that is still labelled orange juice.

As consultants and business owners, you have many ways to enhance the perception of value for your services.

You’re Not The Same

If you are stuck with the belief that just because others in your market are charging $200/hour or $2,000/day that you should be doing so as well, you’re leaving a lot of money on the table.

If that scenario were true, we would all still be paying $2 for a liter or two of orange juice. Tropicana, Factory 10, and others have changed that game.

If retailers all charged the same for their products, everyone would be driving a $10,000 car. Yet, every day in my city I see Range Rovers, Ferraris, Teslas, and other premium-priced vehicles.

Just because someone else, or the status quo, is doing things one way, does not mean you have to as well. If you’re stuck with that belief, then you’re stuck with a commodity mindset.

Move Beyond Commodity Pricing

Here are 6 ways to move beyond commodity pricing and earn higher consulting fees:

  1. Specialize. This is the most important key to increasing your fees. Every great manufacturer of premium brands started (and often still run) their business with a very clear focus and specialization.
  2. Have a great design and excellent photography for your website, materials, and brand that position you as an authority and expert.
  3. Add services and products that deliver more value for buyers than others do.
  4. Create an environment that exudes success and premium (office design, clothing, materials).
  5. Focus on the value clients will get, not only on the deliverable itself. And connect that value to the return on income and benefits that are meaningful to your clients. People with a commodity mindset focus too much on what they will deliver and do for their clients, and not enough on the outcome, result, and ROI.
  6. Present higher-priced options. You can’t earn higher fees if you don’t ask for them. Make a conscious decision to have premium fees and support that decision with the tips above.

What is holding you back from increasing your fees? Post in the comments below…

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  • Gene Di Palma

    We specialize in start-up and small businesses. Many our clients are starting on a real shoe string but are willing to admit they don’t know what to do. So showing up in a $700 suit and a 1 yr BMW works against us. What we found about 10 yrs ago is this..$299 suits, 10 yr old car and basic office decor works. Perception is we don’t waste our money. We are talking to them about pinching pennies to increase profits, using their money where it will make them money, etc. I recently had a new client walk me out to my truck, he said “it’s nice to see you practice what you preach, now I know why your proposal was lower than I thought it would be”. Honestly he was paying us more than he would have paid the other small business consultants in my market. I agree some clients look at the suit & car as a sign of success others seem to like the idea that we practice what we preach.