How to sell generic products without competing on price

by Dan Lemp

Voiceover: 0:02

Business owners. Do you want an unfair advantage over your competitors? Do you want to dominate in your area of expertise? You are listening to business life hacks , learn to influence consumer psychology and shortcut your way to business success with tips, tricks, and hacks from award-winning digital agency, J Marketing.

Dan Lemp: 0:27

Hello, everybody. Welcome to business life hacks this week, we’re talking about how to make yourself more competitive, how to make more sales, how to compete against your competitors without needing to immediately jump to discounting and getting into a price war. So Josh, what other ways can someone stand out there , industry aside from just cutting their price?

Josh Strawczynski: 0:51

This is an area that a lot of people struggle with and it’s actually the very foundation of modern marketing. The idea that you differentiate your service offering through the quality and the service and the perceived values people are going to get. Even when the product is generic with something that your competitors are selling . But to give you an example. This is quite a classic example of a t-shirt. Dan , tell me in your life is a t-shirt from Gucci better than the t-shirt that you buy from the thrift store from Turkish .

Dan Lemp: 1:25

I’ve never bought a t-shirt from Gucci, but I wouldn’t assume so,

Josh Strawczynski: 1:29

But let me ask you this. When you answered that question, that was a very logical answer. And your brain plugged in. Did you feel a Pang of emotion in your chest when you thought about the Gucci T-shirt?

Dan Lemp: 1:40

I gotta be honest. There was part of me is like, I mean, it’s gotta be better, right? It’s gotta be better. I don’t know anything about it, but I know Gucci seems like something about that’s going to be more attractive.

Josh Strawczynski: 1:53

There’s actually a great documentary on sunglasses. Your Ray-bans, I can’t think of sunglasses brands when I need to. Do you know that most of the world’s supply of sunglasses are made in the same factory in Switzerland? They are the wholesalers for the whole world. In fact, they’re even vertically integrating and buying most of the retail venues in the US and brands like Ray-Bans are their home brand. Now it’s all generic. If it is exactly the same product, more or less, why do we pay these extreme prices for a branded item? And how is this relevant to a smaller medium business? Well, all of those branded items have done is assigned this perceived value of quality. They’ve played on human emotions to make us think that this is a safer option.

We talk about this all the time and digital marketing. We make decisions because our emotions betray us and we want to reduce anxiety, reduce the fear that we’re making the wrong choice. We would prefer to reduce those two things. Then make the smartest decision it’s craziness. So coming back to the t-shirt example, Dan, that feeling that Pang of emotion you felt when you’re like, Gucci is probably high quality. That’s what we’re playing on. Is it possible for small and medium business to offer more perceived value for generic item than their competitor? What do you think?

Dan Lemp: 3:30

They are definitely, it definitely is possible. There are many ways to tap into the buyer psychology that will make you stand out , against your competitors. Even if you have the same kind of service. And I remember we talked about on this podcast, I think something in a mall where people, what was that study? Do you remember what I’m talking about?

Josh Strawczynski: 3:54

I remember a few of them. One of them that’s coming to mind though, is hot cognitions. And I think t here’s probably a relates to it, which is where your brain decides that it wants something a full three seconds before your cognitive brain kicks in and starts to actually rationalize that decision. They did a test and they found that scientists with little microbes strapped to your brain could work out whether you were going to hit a button with your left hand or your right hand before you knew which one, because there’s this dormant part of your brain that does that. So appealing to that part of your innate nature is a great way to get people moving in the right direction.

How do you do that in a department store? How do you do that online? How do you do that through a TV ad? It comes down to making the customer feel safe. And you’re going to hear this over and over again on this podcast, knowing your customer and their needs and knowing what the competitors are saying. So this is really a reason to have professional, World-class designed to really think through what can we offer, which is going to make it seem safer to choose us. Like, what are some of the examples we use all the time, Dan, like writings on Google, guarantees.

Dan Lemp: 5:13

If you’ve been mentioned in the news or any awards you’ve won or anything like that.

Josh Strawczynski: 5:19

Right! In fact, one of the ones you use just the other day was naming some of the big clients of a customer. Well, if IBM uses them, then they must be good. Well, truth is not necessarily, IBM might have just used them for one tiny, tiny little thing. But that brand, it sends a lot of trust signals across. So all of those things are ways of positioning yourself to remove anxiety in the buyer’s mindset. And if we go back and make, put this through the digital lens, if customers have this customary six or seven tabs open, they’re looking at different competitors and they’re all selling the same product. How do they differentiate? They do not go straight to price.

Sure, there is a percentage of people who just physically don’t have the economic means to do anything but the cheapest, but the vast majority of us are slaves to our emotions. We do not make logical choices, no matter how much we think we do. The science shows, we simply do not. So there’s two layers of this one setting up the foundations, professional branding, clearly dealing with anxiety points, clearly pointing out how our products solve the core need of the customer. And there’s a second one. And that second one is doing stuff that endears you to the customer above everyone else.

Every touchpoint of the journey should be trying to delight the customer, give them something to talk about. So maybe it’s sending them a surprise and delight item. They weren’t expecting on top of their order. Maybe it’s proactively answering questions. Maybe it’s just amazing staff or bundling in other things into a value offer that makes it too hard to refuse. The point of it is, think about delighting your customer, thinking about sparking up those dopamine and epinephrine hormones in the brain. And that will have a longterm effect, not just to attract the customer, but also to keep them and get them referring you to friends.

Dan Lemp: 7:28

You know, there’s something I’ve heard Gary V. talk about, which is that, you know, our grandparents are actually weirdly suited to stand out in this day and age of entrepreneurs where, you know, treat your customers like you’re running a pharmacy in the 1920s where you send them a handwritten Christmas card or you’re giving them a gift on their birthday or something. You remember their birthday, things like that, the more personal you can make the relationship feel. Then the more likely they’re going to create those positive emotions around your brand rather than with the brand of your competitor.

About the Author

Dan leads the JMarketing SEO department. An extremely analytical mind, he is fascinated with the questions of 'Why', 'How', and 'Is there a better way'? Through Dan's research and experimentation, JMarketing have unlocked a host of best practices and optimisation tricks for our clients.

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