The Banana Trap: Are You Selling a Commodity or a Value?

I learned a really hard lesson recently about the idea of commodity versus value this year.

I spent the last year failing to sell a commodity as if it were just a premium product at the grocery store — it killed my self esteem and confidence.

So let’s get into it.

Value is a perception.

Value being a perception it is tweakable, positionable and massagable to a potential buyer.

Watch this…

Did you want to click the link? Maybe even a little bit?

The above example demonstrates a few powerful marketing and copywriting levers including: bundling, perceived abundance, pricing psychology, urgency, scarcity, social proof and more.

It transformed a newsletter, a 1 hour recorded course, two PDFs and access to future posts into a more enticing package.

But what happens when you strip away that positioning? You are left with a commodity

Commodities are fungible.

You can swap any banana out for another banana, and you still have… a banana.

Because every banana is the same.

There’s a tight range on how much you can position a banana as superior to other bananas (e.g., organic vs. non-organic bananas)

Value is a multi-dimensional concept.

A non-exhaustive list includes: price (parting cost), quality (risk), efficiency (time to satisfaction), whether or not we think it's going to help us get to where we want to go (confidence).

Scarcity also creates value: if you can only get a product or template, highly customized to your needs, from one place — it means you can charge more.

The reason we buy anything is that we perceive the value associated with what we buy is greater than the cost of parting with the infinite freedom (money).

The problem is if you're unable to demonstrate the dimensions of value, you're stuck competing on price, which is a race to the bottom.

Commodities are easily sold, but high in competition and low in margin.

Value-based products require deeper insight and positioning, but are lower in competition and higher in margin, assuming you can get the positioning correct.

The key, however, is that value, like beauty, is in the eye of the beholder.

Therefore, understanding potential prospects, leads, and customers’ needs, wants and values, is what helps you to develop your product and your value proposition.

There’s nothing wrong with selling commodities.

But the key takeaway is the following:

Make sure you know if you’re a commodity or a value based product.

Don’t try to sell a commodity with value based pricing or price a value based product using a commodity anchoring.