Imagine staring into the ocean and trying to differentiate between the waves; it’s basically impossible, right? Your gaze becomes lost in the sea of blue and gray.
Lost. That may be the best way to describe a commodity. Technically, a commodity is a product or service that is virtually the same—undifferentiated—regardless of who produces it. Death comes to both the ocean waves once they summit and crash into the coast, as well as the business or business person who cannot stand out.
But being a commodity is not just about the fact that you can’t stand out. The inability to differentiate occurs as a result of being a commodity; existing as a commodity happens long before that.
Think about the millions of salespeople—real estate agents, mortgage brokers, financial advisors, insurance salespeople; retailers—oil lube joints, sub shops, electronic stores, gas stations—you name it. Commodities exist everywhere and as a consumer, it’s exhausting just thinking about the monotony of commodity businesses. That may be the most important identifier of all: commodities are freakin’ boring.
People want an experience. Whether they’re going out for lunch, buying insurance, refinancing their home, getting a haircut, going to the supermarket, or cutting their lawn—people want a memorable experience. If you can’t offer your customers a unique experience, you’re a commodity.
The place to start is to customize your product or service. One of my all time favorite books is The Experience Economy by Joseph Pine II and James H. Gilmore. In the book, the authors share this rather insightful comment:
“Both goods and services … automatically shift up the Progression of Economic Value when they are customized … as a result, companies create offerings more relevant to the wants and needs of individual buyers, differentiate their goods and services from the sea of look-alike competitors, and thereby increase the value provided, and thus the price charged, to users and clients. Businesses that wish to forestall commoditization…should first get their acts together by customizing their goods and services.”
Now we’ve really defined, haven’t we? The commodity player is undifferentiated, virtually the same regardless of who produces it, boring, and lacking in consumer experience. Glad we got that cleared up. Makes you sick just thinking about it, doesn’t it?
Are you a commodity? Really be transparent with yourself on this one. Oh, here is that important question to ask yourself: exactly how do you customize your product or service for your customers and offer a truly unique experience compared to your competitors?