Digitization of information speeds the process of products or services becoming commodities, encouraging customers to buy solely on the basis of price. When businesses rely on cheap prices, the results are low profits, slow growth, and no future.
Phone companies and Internet providers compete for customers solely on the basis of price. Most airlines haven”™t enjoyed profits in a decade. Fast-food restaurants all focus on “value” pricing and in the financial services arena, Internet-based brokers drive down commissions.
Every business can become a stage and begin to create memorable events for their customers. Staging experiences that engage customers can save you from the threat of commoditization. Apple product owners experience beauty and ease of use from the time they enter the store and see the packaging of to the intuitive way they so easily work.
The Geek Squad, with locations at virtually every Best Buy store in America, dispatches repair technicians driving black and white Volkswagen Bugs while dressed in white shirts, thin black ties, pocket protectors and badges. Deliberately nerdy “agents” turn a dull service call into a fun and memorable, carefully staged encounter.
Before even entering a Planet Hollywood or Rainforest Café restaurant, the customer begins to anticipate something fun and different. As they leave, although the food and service they experienced was nothing exceptional, they tell their friends, Tweet and post on Facebook. Why? Because it was a unique experience! Both Planet Hollywood and Rainforest Café enjoy higher margins because of the distinctive experience they provide.
What will you do to prevent commoditization in your organization? Keep in mind that your people, your physical environment or your products and services can be packaged or delivered differently. Regardless of what you do, your customers”™ experience must be excellent. Excellent experiences are so rare that the vast network of digitally connected consumers tell the world when they have one.
According to Scott M. Davis who consults for companies such as Boeing, GE, NBC Universal, Johnson & Johnson, ExxonMobil and Allstate, “In our digitally driven world, all information makes its way to the Web, where bad products, practices, or services are identified. The best strategy is to be open, honest, and authentic from the start and let the network do much of the heavy lifting.”
In his latest book “The Shift,” Davis said, “Customers will no longer go to the company website or sales force for product information. They believe they can get much better information and make a much more informed purchase decision by getting answers from others, not you. In effect, these stakeholders are stating that they trust other sources first.”
The digitized economy has emerged. To succeed, orchestrate and choreograph an excellent experience from beginning to end. It doesn”™t matter if it is a visit to the dentist, a stay in the hospital, shopping for a computer or going out for dinner ”“ customers are telling our digitized world what it”™s really like doing business with you.
Goods and services are no longer enough to make one company”™s offering stand out from another and the result is commoditization, low prices and lean profits. The next step is to use your services as the stage like the Geek Squad or like Planet Hollywood or Rainforest, facilities as props to provide a memorable experience. To thrive in the new digitized experience economy, offer something so different, your customers can”™t help telling others about it.
Questions for discussion:
Could we offer our products or services in a different and more memorable way?
How much more would our customers be happy to pay for a well-staged experience?
Joe Murtagh is The DreamSpeaker, an international keynote speaker, meeting facilitator and business trainer. For questions or comments, contact Joe@TheDreamSpeaker.com, TheDreamSpeaker.com or call (800) 239-0058.
