avatar_48x48
Contact BSI
Derrick Daye
888.706.5489 Email us
Brand Value & Pricing

How Brands Can Fight Customer Commoditization

by

Commoditization Of The Customer

Maybe it’s not our products that are getting commoditized. Maybe it’s the customer. Consider this great quote about customer commoditization from the Harvard Business Review:

“When has a product category been commoditized? Most managers and business scholars will tell you it’s when competing products are indistinguishable in terms of tangible features and capabilities. But our research shows that commoditization is as much a psychological state as a physical one. A commoditized market is one in which buyers display rampant skepticism, routinized behaviors, minimal expectations, and a strong preference for swift and effortless transactions regardless of product differentiation.”

That’s from Marco Bertini and Luc Wathieu. It’s an important insight because, as marketers, our impulse is to try and product innovate and communicate our way out of the commodity trap. But, if customers have become convinced that the available choices are all OK and that any differences between products don’t really matter, our efforts may be in vain. We may just end up adding to the noise that the customer is trying to avoid and not shifting opinion in any meaningful way.

So, how do we escape from this kind of commoditization? We need something out of the ordinary to jolt the customer out of their mindset. If line extensions and new features won’t do it perhaps an entirely new customer experience might?

But the authors come up with a different and counter-intuitive idea. They propose that you fight disengagement with the one marketing variable that these customers do still care about: price. If they are fixated on price then give them price, only do it in a way that challenges them to figure out what they are actually paying for and makes it more difficult for them to just go for the lowest price option.

The Blake Project Can Help: The Customer Experience Workshop

Become A Better Marketer. Build A Stronger Brand. Join us for The Un-Conference: 360 Degrees of Brand Strategy for a Changing World, May 2-4, 2016 in San Diego, California. A fun, competitive-learning experience reserved for 50 marketing oriented leaders and professionals.

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education

FREE Publications And Resources For Marketers

Recommend this story

Subscribe, Follow and Stay Connected to BSI

Submit

Leave a Reply

Submit your comment