Commoditization happens when market standards become so high that price, rather than quality, becomes the key differentiator. This trend can be seen in everything from smartphone development through to IT maintenance, accounting, and beyond, and, for the people working within those industries, the C-word is a cause for a whole load of lost sleep.
After all, if you’re continually having to undermine your competition from a pricing standpoint, it’s all too easy to let the ball slip, or to skimp on costs to secure that all-important contract. But, even where commoditization is concerned, these mistakes can be costly and will, ultimately, see you falling under an already fast business current.
As such, anyone working within a commoditized sector needs to consider, not how they can cut costs (at least, not solely,) but rather how they can make themselves a valuable commodity regardless. The main thing to note here is that in true ‘if you can’t beat them style,’ it isn’t possible to overcome commoditization that’s already happened. But, you can still differentiate in the following ways.
Justify your price points
At its heart, commoditization is about competitive pricing but, within reason, it is possible to continue charging more than your competitors. Consider Apple, for instance, whose iPhones cost at least double most others, and who are still largely taking the smartphone market by storm. Why? Because they justify those costs with cutting-edge technology, continual advancements, and quality that their customers can trust. By doing the same, specifically with a focus on proving why you’re charging more than others, you might just find that you can keep appealing to the right audience without having to compromise on quality at all.
Customer value proposition (CVP)
Customer value propositions largely still concern pricing, but they take that focus even further. Notably, a CVP is a customer-specific proposition that tailors the most valuable product packages to each client’s needs, thus providing the differentiation that even a generally valuable offering can’t buy you. It may be, for instance, that managed service providers find it useful to position themselves uniquely within existing teams. Or, accountants may find CVP is easier to come by in large organizations with the addition of further offerings, such as tax planning certification as offered by Universal Accounting. Either way; companies need to think about what their clients want, and how they alone can fill that gap and prove that they’re doing so.
Exceptional CX
Ultimately, markets become commoditized because they’re at the top of their game, providing guaranteed quality and, for the most part, guaranteed value. As such, distinguishers at the top are often about the details, and what detail is more important in business than customer experience? You certainly won’t be able to retain a decent client base if word gets around that you’re difficult to get hold of or generally poor mannered on this front. Instead, you should work to make yourself as accessible as possible for every client on your books, offering exceptional customer service, and even checking in proactively to ensure satisfaction, and ultimately differentiation, at all times.
