Differentiating in a Commoditized Marketplace

September 6, 2017

Dear Strategy:

“How do we continue to ‘know’ our customers in a future with ‘commoditized’ experiences to differentiate our products in the marketplace?”

To answer this question, I want to focus in on the word “differentiate.” Almost every company I go into says that they want to have a differentiated strategy – meaning that they want to find some way to be different than their competitors. And the majority of those companies tend to focus on product innovation as their path to get there. Oh – and, by the way, most of them never succeed in doing it.

The reason for this is simple, and it has everything to do with the first part of the question: truly knowing your customers. When you really take the time to understand what is most important to your customers, you might just find that it has nothing to do with the tangible product itself.

Think of yourself as a consumer. Now think of the companies that you most like to deal with. Chances are, they aren’t the companies with the highest-tech products or even the most innovative offerings; although certainly those things do hold some weight. The companies that we are usually most enamored with are the ones that are easiest to do business with and that treat us, as consumers, with the most respect.  And, unfortunately, these companies are few and far between.

So why not have a strategy to differentiate on those things?

Which brings us back to the question that, in fact, sort of answers itself. Focus on the experience – not necessarily just the product. The “commoditized experiences” that this question refers to, unfortunately, equate to absolutely terrible, frustrating, and difficult customer service experiences. As products become more complex, this type of service becomes more the norm. And this is exactly the opposite of what customers really want.

So, the next time you’re trying to differentiate through your strategy – talk to your customers, find out what they care about, and innovate there. And always remember that there’s more to your product than the product itself – especially through the eyes of the market.


Listen to the podcast episode
Dear Strategy: Episode 014




Bob Caporale is the author of Creative Strategy Generation and the host of the Dear Strategy podcast. You can learn more about his work by visiting bobcaporale.com.

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