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Fight back against the "me-too" hell of commoditization

Posted on Monday, 26 April 2010 12:16PM by John Chambers

 
How many of your products or services are sold on price these days?  How does this compare with a few years ago?
 
Have you noticed a growing trend in your industry that your core products or services are losing their uniqueness? That the competition is copying what you consider to be your best features? That your customers tend to dismiss your differentiators and view all competitive offerings from a price perspective alone?
 
It’s the “me-too” hell of commoditization.
 
To some extent, the process of commoditization is inevitable, but I believe that last year’s recession has increased the rate of commoditization dramatically.
 
Many of the clients I have met recently tell me that the most damaging effect of last year’s recession has been falling customer volumes leading to stiffer competition and pressure on prices. 
 
Customers will of course make the most of this and do all they can to get you (or your competitors if you won’t!) to compete on price alone. After all, many of them have customers who are doing the same to them!
 
Sounds familiar?  What can you do to reverse this downward spiral?  Here are some key strategies:
 
  • Disruptive Innovation.  Introduce an innovative new product that will disrupt the process of commoditization.  Provide customers with new products or services that they “must have” and will be prepared to pay a premium for.

  • Add New Value.  Ask yourself what would build extra value for your customer. This could be within the product or in some part of the service you provide. What could you build in for £1 that would be worth £2 or £3 to your customer?  What could you bundle into your offering to increase value?


  • Differentiate.  Look at the different needs that exist in different customer segments and differentiate your product offerings between them.
 
  • Unique Strengths.  Focus on your unique strengths and build your product strategy around them.  What are you better at than your competitors?
 
  • Emerging Needs.  Ask your customers what keeps them awake at night and build your next generation of products and services to satisfy these emerging needs.  Develop a deeper understanding of your customers’ business and a partnership with them for the future.
 
If you have noticed the growth of commoditization in your business, we can help you to fight back.  Let us help you introduce these strategies into your business.  We have a range of workshop-based programmes that incorporate proven tools and techniques to help you grow your business into a profitable future – and we guarantee results!
 
Get in touch and let’s start fighting back!
 
 
 
 
 
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