Avoiding Commoditization with Hi-Tech Solutions - Part II

Part II – “Dare to be Un-Shopped”

The phone rings. “Carter and Company, this is Nick.”

“Hello,” the caller avoids pleasantries and gets right to business, “I’m trying to get quotes for…”

Calls that begin this way may invoke excitement for salesmen, but it’s a frightful indicator of a commoditized market. Last week, we looked at how customer perception is the primary factor that drives once-vibrant and profitable markets into the doldrums of price-warring competition. This week, we’ll focus on changing those perceptions and generating leads interested in your sharp mind more than your sharp pencil.

Innovation by differentiation

Distinguishing your product or service from those offered by the competition is primarily a function of marketing. Consider Starbucks, which charges considerably more for a cup of coffee than the rest of the industry. How is this elevated price accepted by the customer? Think package design, product styling, and customer experience. Starbucks hangs pendent lights over their bar and features local artists on their walls to create an environment favorable to positive customer experiences.

In high-tech markets where retail visits are rare, the sales approach itself can also be a marketing tool. For example, deliver “proposals” to potential clients instead of quotes. This allows for elaboration of the standard features of your solution sale.

Innovation by addition

The simplest method of offering a “solution” sale is to bundle services or auxiliary products with a commoditized product. Tech support and training, for example, are add-on services which are commonly offered. General Motors has effectively achieved innovation by adding On-Star to many of its vehicles.

Innovation by innovation

Finally, there is innovation by innovation alone. Companies like Apple redefine common products all the time. Their business approach results in products priced higher than comparable products and their sales are not affected. Similarly, you might recall when Autodesk realized their need for this type of innovation in the mid-90’s. Although AutoCAD had been their flagship for over 20 years, they expanded their product line through acquisition and spawned a new era of growth for the company.


Regardless of the strategy for avoiding commoditization, for manufacturers and suppliers, the desired result is the same. When a consumer perceives your product or service as beyond compare in its total offering, they won’t have the luxury of shopping it around. If you want to restore your profit margins to the levels they once had, you must dare to be un-shopped.

Facebook: Not Just for Dorm Rooms Anymore.

When I recently published my first book (and I’ll resist the urge to plug it here), Facebook provided a great avenue for low-cost viral marketing. As a marketing professional, I wanted to learn what else this platform could offer me and my clients beyond the simple b2c. What I found might shock you.

For high-tech b2b companies, Facebook is not exactly the first venue that comes to mind when considering how to engage in community marketing. In fact, I was skeptical myself, until I did some research. I found nearly a dozen different AutoCAD user groups that had formed on Facebook. Over 2500 professional ASME members have created an active and vibrant group on Facebook. There is even a small network of SME members that are attempting the same thing.

It’s obvious that the famed “social utility” is moving beyond the dorm room. Professionals (including myself) can be found on Facebook throughout the day from their work computers. So, for those who are bold enough to try something new, where do we even begin to monetize this opportunity?

Currently, I’ve dabbled in Facebook groups. However, the community at large is as averse to “spammers” as the Wikipedians. Soon, I plan to create my first application to be shared through the Facebook API. Whatever the method, I believe there are tremendous opportunities for business development and brand building in the Facebook community, so try to shake off the stereotype and dig in.

Help Them Understand You

There’s a clever slogan on my home page, but honestly how many of you can say you’ve contemplated the weight of this statement? You’ve got a solution that could change your customers’ lives and businesses… if only they would just GET it. Over time you realize that the prospect’s excitement in what you offer just doesn’t compare to your own. Why not? They simply don’t understand.

So, as my oh-so-clever website states: “They may see you. They may hear you. Help them understand you.” And therein lays the secret. Help them. Marketing, just like sales, is a matter of helping prospects to GET it so that they can better themselves with what you have to offer.

Try, whenever possible, to define your concept in an all-encompassing term. This can be taken to a ridiculous extreme, but in general, it’s very helpful. Autodesk’s recent campaign on “digital prototyping” is a great example of using succinct terminology to describe your technology’s ability. Other companies have succeeded with similar concepts, such as 3D Systems’ V-Flash™ “Desktop Modeler.”

Another great method for helping clients to understand you is to publish more case studies than promotional material. A feature/benefit document is not bad, but people learn through stories. This is also a reality check for most companies. If they can’t find one good example of their product doing what they say it does, there’s a shortfall somewhere that needs addressed.

I’m always interested in hearing other ways that you have tried and succeeded with helping people understand you. Feel free to post replies.

Disruption on the Showroom Floor: AU 2007 Review

As this year’s AU comes to a close, the exhibit hall once teeming with beer-drinking attendees will be barren and empty in a matter of hours. The usual line-up of developers, service providers, and hardware vendors that have become staples in the Autodesk community will greet each other a final time until they return next year. Just as every year, however, new faces have also arrived. In the sea of “me too” applications and “just another” consulting companies, a handful of newcomers at AU have earned their titles as disruptive technologies on the showroom floor.

Tucked quietly beside the caterer’s service entrance near the back of the exhibit hall, NextEngine turned heads with their Desktop 3D Scanner. This simple white box, smaller than an inkjet printer, scans 3D parts with accuracy to 0.005”. Priced at just $2,495, the adoption rate will be high and possibilities for applications are endless. One expectation, however, is a reverse engineering capability like never before. The scanner will certainly, as is touted, close the gap between design and CAD. Expect to see this technology appear in fields ranging from medical to military—allowing physical parts to be digitized and analyzed in a matter of minutes. If prices fall even further, consumer markets surrounding gaming and avatars would open as well.

A stone’s throw from NextEngine, on the same back row of exhibits, a categorically opposite technology was unveiled. With RP&M leaders ZCorporation and Stratasys exhibiting their mature modeling hardware, Paul Nye and his wife unveiled their garage invention called the 2BOT—a new, simpler, and much less expensive 3D output device for architects and engineers. The hardware is reminiscent of an old pencil plotter, except instead of pencil lead, a drill bit moves on the x, y, and z axis to carve out site contours and other geometries in a simple subtractive manufacturing process.

While the technology is much more rudimentary than other additive RP&M systems, the disruptive feature is in its cost—both upfront and operational. At just $9,000 for a system, the 2BOT is easily affordable for any firm. More importantly, the system uses any material of the designer’s choice. Wood, styrofoam, plastics, or any other creative medium purchased at your local hardware store will suffice. Compared to the square inch costs of photopolymers and resins, or even metals for CNC, the 2BOT will operate at nearly the same material costs as traditional modeling mediums. Expect to see this technology introduced in small and medium-sized architecture, landscape, and site design firms where the costs of large-frame rapid prototyping have prevented such investments in the past.