The commoditization trap is a problem that many companies face in today’s marketplace. It is a situation where a company's' product or service become indistinguishable from those of its competitors and are seen as generic commodities by customers. As a result, companies find themselves in a race to the bottom as they compete on price alone and struggle to create a unique offering that can differentiate them from the competition.
It’s a troubling situation for businesses, but not an insurmountable problem. In fact, there are a number of steps businesses can take to escape the commoditization trap and create a unique offers that will help them stand out from the competition and create lasting value in the marketplace.
So, if you are looking to escape the commoditization trap, here is a step-by-step guide to help you do just that.
Step One: Identify Your Differentiating Factors
The first step to escaping the commoditization trap is to identify what makes your products or services unique. This means considering the features, benefits and even the intangibles that make your offerings stand out from the competition.
For example, if you run a furniture store, you may offer a wide selection of products, superior customer service or even a unique design aesthetic that sets you apart from the competition. Take the time to identify the unique features and benefits of your offers that the competition can’t match.
Recommended by LinkedIn
Step Two: Highlight Your Differentiating Factors
Once you have identified the factors that make your products or services unique, the next step is to make sure that you are highlighting these differentiating factors to your customers. This could involve highlighting them in your advertising and marketing materials, your website or even through word-of-mouth.
For example, if you have a furniture store and you have identified superior customer service as one of your differentiating factors, you could create a campaign that emphasizes this aspect of your business. You could also create a referral program to reward customers for spreading the word about your superior customer service.
Step Three: Focus on Quality
Another way to escape the commoditization trap is to focus on quality. Research has shown that customers are willing to pay more for higher quality products and services. This means that you should be investing in the best materials, the most advanced technology and the highest quality customer service available.
This doesn’t necessarily mean spending more money but rather investing your resources in a way that will result in higher quality offers. For example, if you have a furniture store, you could invest in higher-grade materials and better customer service.
Step Four: Develop a Unique Brand Identity
In addition to focusing on quality, another way to escape the commoditization trap is to develop a unique brand identity. This means creating a distinct visual identity, tone of voice, and messaging that sets you apart from the competition.
For example, if you have a furniture store, you could create a unique brand identity that emphasizes your commitment to sustainability, craftsmanship or innovation. This type of messaging will help you create a unique offering that will make you stand out from the competition.
Step Five: Offer Added Value
Finally, another way to escape the commoditization trap is to offer added value to your customers. This could involve creating bundled packages, offering discounts, or providing additional services or features that are not available from the competition.
For example, if you have a furniture store, you could offer a free delivery option or a money-back guarantee that the competition doesn’t offer. These types of added value offerings will help you create a unique offering that customers will be willing to pay more for.
Since many firms face commoditization as a challenge, it can be solved by following the steps outlined above. You can create unique offerings that will help you stand out from the competition and create lasting value in the marketplace.
FollowApex Hatchersfor more such information or visit our website www.apexhatchers.com
