Bypassing the Commodity Box

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  1. How can we keep our services from being seen as commodities?

    While we can’t lay out the answers in this short page, we can and do teach the principles of staying out of the commodity box in the PM Essentials program.

    Components of a solution are:

    • Value pricing techniques
    • Creative use of risk assessment
    • Leveraging of unique experience
    • Building trusted advisor relationships
    • If you can, move the decision-making process from objective to subjective evaluation

    For more information on value pricing, the best source is Frank Stasiowski’s classic work The Value Pricing Imperative for Design Firms.

    For more info on the commodity box, see Charles Nelson’s paper From Commodity Box to Trusted Advisor.

The “commodity box” means that clients treat your services as a “commodity” – a “standard” service that can be sourced at the lowest price. Even when clients have a more sophisticated understanding of the nature of design services, price is usually a component in the decision.

When you’re in the Commodity Box, it feels like like there is nowhere to move, except to cut price. Unless you can figure out how to add value to your offer – something clients want at an emotional level – you’re stuck in there. Don’t buy into that.

Accepting that price will drive the hiring decision is joining the race to the bottom – and there will always be some other consultant more desperate, or inexperienced, than your firm.

It’s a no-win game.

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