Can you Avoid Becoming a Commodity?

No company wants to be commoditized or treated like a commodity. When you or your business adds no value to your product, though, you’re instantly at risk of losing business, customers, and revenue. So is there some way to develop a commodity strategy to retain your customers so that you’re never considered a commodity in the first place?

If you don’t know whether your business is a commodity or not, let’s define the term. Anything where price is the largest factor in a customer’s decision on whether or not to buy a product from your company or from another company means your business is likely a commodity. The current high price of gasoline easily sways a customer’s desire to switch from one gas station to another to find the lowest price for that commodity. Organic foods are another example. Do you really care if an organic orange is from California or Brazil? No, you’re going to buy the cheapest one. There’s no brand loyalty there.

After a recent incident with a dry cleaner who I’d used for four years, I realized that they didn’t deal well with dry cleaning issues, which made my life more difficult. Similarly, a liquor store that I’d gone to for eight years raised their prices despite the fact that the store seemed shabbier to me. In each instance, there was no reason I couldn’t easily find another dry cleaner or another cheaper, well-kept liquor store. If they had a commodity strategy, though, they could lessen the chance that customers would switch from their product to another product or from their business to another business.

The commodity strategy I prefer is not to be a commodity. You want your customers to love your product, your business, your system. You want them to love you enough that they don’t consider price or switching to another company. This comes from providing value-added products and services. This comes from providing exceptional customer service all the time. This comes from knowing what your customers want and need. And this comes from having a passion for your own business so that your customers sense that passion as well. If you gain your customers’ trust, you gain their patronage, and then, when they consider your product or service indispensable, they aren’t even concerned with issues of pricing.

How could your business avoid becoming a commodity by instituting a commodity strategy that elevates you from a commodity status in the first place?