Related Articles
View AllMarch 30, 2025
Breaking Free from the Commoditisation Trap: Why B2B Brands Must Create a Market of One
Editor’s Note: Richard Muscat Azzopardi, CEO at Switch, an ICOM member agency from Malta specialising in offering business solutions to B2B clients, explores the dangers of commoditisation and why businesses must focus on differentiation to thrive.
In a world where B2B businesses often find themselves competing on price, differentiation is the key to survival. Too many companies – especially service providers – end up in a commoditised race to the bottom, where the only factor clients consider is cost. This is a dangerous trap. It erodes profitability, stifles innovation, and leaves businesses scrambling for scraps in an oversaturated market.
At Switch, we lived this reality. As a full-service agency, we prided ourselves on our versatility. We could solve any marketing problem for any company. But this breadth came at a cost: potential clients saw us as interchangeable with dozens of other agencies. Every conversation boiled down to one thing: “How low can you go?”
This is the hallmark of commoditisation. When your offering is perceived as similar to your competitors, price becomes the primary decision factor. And once you’re stuck competing on price alone, you’ve already lost.
Why Do Businesses Get Stuck in the Commoditisation Trap?
Commoditisation happens when businesses fail to differentiate. Businesses become commoditised when they blend in rather than stand out. The key drivers of commoditisation include:
- Market Saturation – Too many businesses offering the same services.
- Feature Parity – No clear differentiation between competitors.
- Price-Based Competition – Lowering prices becomes the default strategy.
- Lack of Brand Differentiation – No distinct positioning that justifies premium pricing.
Industry expert David C. Baker has long emphasized the importance of positioning in escaping the commoditisation trap. As he puts it:
“Specialists thrive, generalists struggle. If your firm is easily replaceable, then price becomes the only differentiator—and that’s a race to the bottom.”
At Switch, we learned this the hard way. As a full-service agency, we were proud of our versatility until we realised that potential clients saw us as interchangeable.
This moment was a wake-up call. If we wanted to escape the price war and stop being treated as just another agency, we needed to reposition ourselves, not as a service provider, but as a strategic partner with a unique value proposition.
How to Escape the Commoditisation Trap
1. Own Your Niche
Becoming a specialist is the first step to escaping commoditisation. Instead of trying to serve everyone, define the one thing you do better than anyone else. When you serve a distinct market segment with a laser-focused offering, price becomes secondary. Clients seek you out because they believe you are uniquely positioned to solve their problem.
2. Build a Strong Brand Identity
A differentiated brand is a strategic positioning tool, not just a logo or a set of well-defined colours. Patagonia, for example, operates in a highly commoditised market (outdoor apparel), yet it commands premium prices because of its values-driven brand. B2B businesses must do the same by defining their purpose, values, and narrative, and communicating these consistently once they’ve been codified.
3. Innovate Beyond Services
If your business model relies solely on billable hours, you will always be replaceable. Packaging your expertise into proprietary processes, frameworks, or productised services makes comparison difficult and value more apparent. At Switch, our CATALYST program transformed us from a generalist agency to a specialised partner offering a unique strategic process that no competitor could easily replicate.
4. Shift from Transactions to Relationships
Clients who see you as a long-term partner (rather than just a service provider) are less likely to shop around. This means prioritising consultation over execution, problem-solving over service delivery, and strategic input over task completion. When your clients see you as integral to their business, they stop looking elsewhere.5. Reimagine Pricing & Sales Models
Rigid hourly rates make it easy to compare. Instead, value-based pricing, unique retainer models, and subscription services create a stronger business foundation. Clients invest in outcomes, not time. This shift makes price less of a deciding factor and positions your services as indispensable.
The Path Forward: De-commoditise Your Business
The journey from commoditisation to differentiation isn’t easy, but it’s necessary for sustainable growth. If your business feels stuck competing on price, it’s time to break free.We’ve documented the entire process in our latest eBook: “A Deep Dive into De-Commoditisation: Why It’s Critical for B2B Businesses to Create a Market of One.” – Download your copy here.
