10 ways commodity businesses can use fantastic CX to become unique again

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One of the questions I receive the most is “Steven, how can we possibly differentiate ourselves if we’re active in a commodity business?”. These are the types of companies selling completely interchangeable products like coffee, energy, bleach, electrical cables or toilet paper. My reaction is always the same. I invert the question and ask them “is there really such a thing as a commodity business?”. Because, really, isn’t commoditizing something that happens when we lose our uniqueness because we allowed ourselves to become boring and fungible (which is a fancy word for interchangeable)?

All too often, the response is to compete on price, but the problem with that is that companies then start to eat into their profit margin which makes it very difficult to run a healthy business. For me, the best answer here lies in customer experience: how can so called commodity businesses offer value on top of an otherwise pretty unremarkable product or service? I believe that that is the best way to make your brand unique again.

And here are some ways how you can achieve that:

Be obsessed with convenience

Always try to figure out how your company can help save your customers’ time, which is probably the most important resource in their life. This concept is what made the tech giants big and it can help commodity businesses offer their customers convenience in ways that make them stand out from other companies.

Offering a subscription model so that customers don’t need to think about when they will run out of essential but otherwise unremarkable products, would be a nice example. Just think of Dyper’s subscriptions for eco-friendlier bamboo diapers or Dollar Shave Club’s subscriptions for razor blades.

Or the hyper-convenient Amazon Go Stores, which differentiate themselves from the many other ones – which sell very much of the same products – by almost completely eliminating the checkout process.

Add services to your existing offering

Every organization has the opportunity to add services on top of the products that they deliver in order to provide a more holistic experience to each customer. It’s a clever way to differentiate themselves. I always love to give the example of insurance company Centraal Beheer which is always looking for new ways to become a partner in life for their customers. Insurance seems a pretty boring service, right? In fact, it’s even worse than boring: if you interact with the company, you’re in a state of crisis so you really want as little interaction with them as possible.

And yet Centraal Beheer was able to turn that feeling completely around (their NPS is insane compared to other industry players) with some super-useful services. For instance, during their Small Dent Days, about 10.000 people can have the small dents in their car fixed for free while they are warmly welcomed by the insurance agents of CB. I really love how they attempt to reach the emotions of the customer at different touch points.

Expand your influence zone

Another great way for commodity business to differentiate themselves is by expanding the influence zone of their brand: not just by offering a sustainable customer value proposition but even by trying to impact world events like the pandemic or the war in Ukraine.

For the past decades most organizations were focused on the influence sphere of their own company while just a minority spent time acting upon the issues and challenges that the world was facing. Today, a pandemic and wars have changed that dynamic and successful organizations seek to play an active and influential part in the world. It’s what customers have come to expect today, even if they have little choice in what company they do business with for commodities like electricity, phone or gas. In fact, they still want to feel confident they are connected with a trustworthy organization. When commodity companies take a stand for larger purposes and advocate for worthy causes, it builds trust and pride from customers.

Create fantastic (immersive) experiences

As I said before, there is no such thing as a commodity. If a product is boring, make it interesting again. Starbucks is one of the top examples of that. When they launched themselves, Americans bought coffee beans in the store and made their coffee at home, resulting in low coffee quality and experience. The Starbucks founders believed that US customers might embrace the Italian coffee culture, if they only added local elements in the mix and created a unique and personalized in-store experience. The high (seasonal) diversification, the names on the cups, the comfortable “third place” philosophy – a location between work and home where people can relax – are all part of that.

Today, it’s not just about great offline or even online experiences. We see an increased move towards offering highly immersive experiences in the metaverse. And not just the obvious tech companies. More traditional companies like Walmart are experimenting with it as well, looking into their own currency, creating metaverse shopping experiences or looking into digital sports. Nike, too, has opened a Nikeland version in Roblox, where customers can buy virtual assets like sneakers. It’s really early days and there are still some challenges to tackle (better UX for instance) for this metaverse experience to really take off, but once it will, I believe this could be a great way for commodity businesses to differentiate themselves.

Create shared value through smart contracts

As stated above, the key characteristic of commodities is that they are interchangeable or “fungible”. So what better way to turn that around and make them unique again by combining them with non-fungible tokens or NFTs, which are unique digital pieces recorded on a cryptocurrency’s blockchain

As you probably know, I’m highly intrigued by NFTs, especially when they are combined with smart contracts. These will allow consumers to participate in the value and influence of companies, which I love. My favourite example is how Kings of Leon released an album as an NFT and their tokens – including a limited amount of unique-looking “golden tickets” – unlock special perks like limited-edition vinyl and front row seats to future concerts. Or an artist could add NFTs to the first 100 albums that are sold, for instance offering 10% of his or her profit to these most loyal fans. Of course, these are not commodity examples, but just think how a coffee company could add an NFT to the 1st 500 packages of a new flavour sold, giving the buyers access to an “Early bird taste club” where they can always be the first to try new products. It’s about rebalancing the – currently out of whack – loyalty system where customers can get more value and more engagement than ever.

Stimulate artificial serendipity

Research by the University of Sydney, University of Florida, and Rutgers University uncovered that serendipity and seemingly random discoveries can play a huge role in customer satisfaction. Facebook, too, uncovered that 63 percent of global shoppers enjoyed discovering items they weren’t actively looking for.

If you sell a commodity that lacks any type of excitement, you can always try to add a little ‘magic’ by creating more satisfying, enjoyable and serendipitous experiences through positive and unexpected chance encounters. Let me explain with an example: Netflix introduced a shuffle button that eliminates choice and plays a randomly selected program for the consumer. Or closer to commodity businesses: subscription box services like Birchbox and Stitchfix were able to rekindle the pleasure that comes with receiving a random selection of products. In a world of increasingly orchestrated customer experiences, brands that understand how to stimulate serendipity can differentiate themselves from others, even if their products seem very “unexciting” at first..

Bundle products

Organisations can also differentiate themselves by bundling a commodity product with other useful, often adjacent offerings. Could be by bundling with non-commodity items or by putting together a unique package of commodities that only they are offering together. The result should be that you put together products or services in a way that makes customers feel like they are getting a better deal by purchasing the bundle.

For example, travel agents sell airline tickets which can be purchased in a lot of online and offline places for about the same price. So, a travel agent may choose to bundle together airfare, car rental, a resort stay, wellbeing services, meals, tickets to a show, and guided tours all together. Although these items can be purchased individually elsewhere, no one else is offering that same convenient, perhaps even more cost effective bundle.

Tell stories that connect

I believe that every organization has a unique story to tell. Maersk, for instance, is a company that moves containers from A to B, which at first sight might seem pretty underwhelming. But they see that differently and understand the power of storytelling. Their customers find great value in the adventures that they share over social media: about how they have been playing a role in weather forecast. Or how they have been helping to try to change society. Or even that they transported 27.5 billion bananas in 2021 and how many containers and cartons that were in total. The result is that they have millions of followers over the social media.

Most commodity businesses are so focussed on price and product that they forget that their company has a fantastic story to tell, which can help increase their bond with customers.

Be extra empathic

Commodity businesses can also set themselves apart through emotional intelligence and by interacting with customers in empathetic, caring, honest and transparent ways. Because customers really do notice when brands really try to help or just want to sell. I loved this quote from one of the articles I researched: “Brands are not competing over who has the best price or product, but on kindness”.

Providing superior customer service could for example make a great difference. Energy providers have a notorious reputation for bad service, for instance. It’s often almost impossible to get a human on the phone and if you do, they only know how to follow scripts, but when you have a unique problem, they experience great difficulties in solving that for you. What if there was one company that offers a similar pricing package for energy (most of them do anyway) but has a fantastic reputation in CX? You would immediately choose for that one, right? Well, that goes for your own commodity business as well: if you are known for your empathy, that will set you apart.

Be highly accessible

My last tip in this article is this one: commodity businesses can differentiate themselves on how easily they can make their products accessible to customers. This “Be where the customer is” philosophy is actually becoming more popular in every type of sector. More and more organizations are building their services around the customer, actually going to them. I recently saw the example of these mini-supermarket vans – often offering specialized services like pharmaceutics – that go to the homes of customers instead of the other way around.

Another form of better accessibility is time-bound. Take convenience stores for instance, which are really ubiquitous in cities. Most of them have limited opening hours. But in the US, you have these 7/11 stores that are always open. They offer much of the same services as other brands, but you can always reach them and that makes them unique. And customers are willing to pay the extra price for that.

So these are my 10 tips for today for those who are looking to de-commoditize their businesses:

  1. Be obsessed with convenience
  2. Add services to your existing offering
  3. Expand your influence zone
  4. Create fantastic (immersive) experiences
  5. Create shared value through smart contracts
  6. Stimulate artificial serendipity
  7. Bundle products
  8. Tell stories that connect
  9. Be extra empathic
  10. Be highly accessible

Let me know what your favourite methods are to break out of the commodity trap!

Republished with author's permission from original post.

Steven Van Belleghem
Steven Van Belleghem is inspirator at B-Conversational. He is an inspirator, a coach and gives strategic advice to help companies better understand the world of conversations, social media and digital marketing. In 2010, he published his first book The Conversation Manager, which became a management literature bestseller and was awarded with the Marketing Literature Prize. In 2012, The Conversation Company was published. Steven is also part time Marketing Professor at the Vlerick Management School. He is a former managing partner of the innovative research agency InSites Consulting.

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