In a highly commoditized business, competition is often based solely on price. For example, if you wanted to purchase manila file folders and there were a drug store and an office supply store selling identical items, next door to each other, you would likely purchase the less expensive item.

The same can be true for businesses--the more commoditized, the more likely you will compete based on price. It doesn't have to be that way, and I advise you not to go that route!

Let's again consider the RE agent. Since the commission received for selling a home is about the same for everyone, the agent MUST differentiate herself from others. If he begins to compete on price and cuts his commission, he devalues himself, and it's difficult to climb out of that hole.

If the client does any comparison shopping, and they will, you need to be prepared. Here are examples of ways in which a RE agent can differentiate himself/herself:

(1.) years of experience

(2.) expertise in a specific type of home ($1MM+, condos, co-ops, etc.)

(3.) expertise in a certain neighborhood/area

(4.) education level

(5.) types of clients serviced (entertainers, first-time buyers, Spanish-speaking)

(6.) awards won

(7.) sense of humor/personality!

When the potential client is shopping around, it is important for you to stand out, to be remembered. Don't always use all your points of differentiation; pick the best one and sell it. In addition, make sure your points of differentiation are actually DIFFERENT than what your competition says about themselves! Don't use generalities like "best service", "highest quality" or "great value". Be specific!! These statements are like so much white noise--your target won't even hear them.

If you have a more unique, less commoditized business, like a small business coach for example, it is still important to understand your points of difference in case the prospect asks. Even if they don't ask, it can sometimes help you in your sales interaction (website, business card, networking, advertising, in person meeting) to mention your differences. My points of differentiation include:

(1.) 50% longer coaching sessions than "average"

(2.) practical, not metaphysical or spiritual, approach

(3.) lots of flexibility in appointment timing

(4.) no long-term contracts

In hearing your points, the prospect may lose interest in shopping around and be more convinced to make a purchase, or he may know right away that yours is not the right product for him. This is better for you, also, as you are not wasting your time continuing to follow up for nothing.

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Audrey Burton is a practical Small Business Coach. She eliminates business/marketing overwhelm and gets you excited to work on your business again! To sign up for her free, monthly email newsletter, visit her site: http://www.TigressCoaching.com .