A brand is the external reflection of a company’s inside culture and core values. In order for a brand to stay relevant, be different and unique, it must reinvent itself continuously. If a company’s products or services don’t change the game regularly, they suddenly become a commodity, as unique and innovative they could have been at some point. EVERY product and service becomes sooner than later a commodity. What’s critical is for the company to keep its brand relevant by innovating and bringing to life new game-changing products or services.
Many companies struggle here, however, with development portfolios that are anemic. Take a look at the breakdown of projects in the typical firm’s development pipeline today versus the 1990s. Today’s portfolio features a far higher proportion of improvements and modifications, but new-to-the-market projects have dropped in half. This only reinforces the commoditization of products.
On the path of commoditization…
In today’s world, you either choose to commoditize, or to innovate.
Think of Apple. In its early years, Apple represented the anti-system, anti-PC world. If you were mainstream, you were a PC user. If you were different (Apple’s “think different”) or artsy, you were a Mac user. After Steve Jobs came back to Apple and made what Apple is today, suddenly the brand became mainstream, to the point of alienating early Mac adopters. Apple products went from being in a niche to being adopted by the masses. Although they changed the industry (and literally our lives) introducing i-Pod, i-Phone, i-Pad, the Apple products have been become mainstream and fully commoditized.
Samsung introduced their smart watch before Apple, although the i-watch had been the talk for years. Google introduced the smart glasses first…
Apple went from being the industry’s #1 brand and disrupter to being second-to-market trying to catch up with the competition.
As products and services are easily commoditized, the unique differentiator comes with the brand experience a company creates for its customers or users.
To stay with the Apple example, Apple still has some edge there, although competitors are catching up.
It is much harder to plagiarize a unique brand experience than it is to plagiarize a product or a service.
It is critical for a company to adopt a mindset of innovation and seize every opportunity to make its brand different, beyond the products. The brand experience is a vital differentiator.
Now, more and more experience strategists seem to be focused on customer retention, and sometimes acquisition. With more and more companies employing the exact same approach to customer journey work, the concern is that all experience begins to look the same. And this again commoditizes the product.
It is easy to create a brand and a “promise”. What is hard to achieve is to deliver on the brand promise over and over again. As innovative as the brand promise may be at some point, other brands will follow and suddenly your promise will become commoditized, again.
McDonaldization of Starbucks…
When Howard Schultz left Starbucks in 2000, his successor Jim Donald decided to automate and time the Starbucks service, from time required to grind coffee, to mix ingredients, to minimal interaction with customers. In other word, Jim Donald mcdonaldized Starbucks. When Schultz returned as CEO in 2008 appalled by the dilution of the Starbucks experience he had brought to life, he decided to revive the brand promise. He closed all stores worldwide to (re)train managers and employees on the true customer experience, leaving on the counter $7M that day. He brought the brand promise back to its origin, and has continued to deliver on the promise ever since.
Signs that you are on the path of commoditization… and how you must remedy…
You must find a way to be different. Sure, you can position your brand differently but that’s not enough. If you promise something different and then give everyone the same experience they know, chances are you’ll compete on price only. If you don’t do something different, you’re merely a commodity.
1. DON’T use the exact same metrics as everyone else in your industry. If everyone measures the exact same thing, eventually everyone begins changing their product in ways that do the exact same thing.
- DO set metrics based on your brand and business objectives (in short, your strategy) and what the customer wants. Create metrics that challenge you to continuously improve and innovate, in a way that is uniquely yours. Compare your company to your ideal, not industry standards.
2. DON’T focus on the exact same customer touch points as your competitors. If you are focused on the exact same moments of truth that your competitors are (and you measure the same thing), those moments will begin to look very, very similar.
- DO focus on genuine original key touch points. Immerse yourself in your customers’ natural environment and lives toREALLY understand what they want. Uncovering the unmet needs is what will differentiate you from the pack.
3. DON’T have the exact same target audience as everyone else in your industry. You know your company is behaving like a flock of sheep when you have the same touch points, same metrics… and you are going after the same audience as your competitors. How can you be the black sheep to drive the flock in another direction?
- DO look at what people want and less at who people are. The same people want different things from experiences depending upon the situation they find themselves in. Know the situations; know what they want in those situations and target those things.
4. DON’T settle for being an er-brand. Your tactics are focused on being better at the same things that your competitors do. Red flags go up whenever I hear a pitch that explains how a new offering is just like another but is small-er, bigg-er, thinn-er, light-er, fast-er, sexi-er, whatev-er. Hearing “we’re just like X brand but we’re…” sets off warning signals about breakthrough ability and long-term viability. An -er position is a dangerous one to adopt. It relegates your brand to subordinate status compared to the brand used as your reference point – and it tells customers that your brand possesses only comparative value, rather than having its own inherent value. It also puts your brand under constant pressure to introduce new products on Brand X’s time line, because now your brand value is tied to Brand X’s product. You have little basis for achieving meaningful and sustained differentiation.
- DO find a unique brand personality that translates into a unique customer experience, enabling your brand to rise above competitive comparison. Using brand personality in this way is not simply about developing creative communications; it’s about infusing every aspect of your operations with your unique character.
Customer experience is a great strategic framework for getting people to want to spend time with your brand. It is the right concept, but don’t settle for sameness or for an –er brand. Be original and you won’t become a commodity.
Image credit: kootenaymac.blogspot.com
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Stephan Vincent is Director of Cultural Transformation at Collidea, a strategic innovation firm in Carmel, IN. He is also Founder and President of s.p.IN and Collide Summit Indiana, a first-of-its- kind un-conference unlike anything else. Stephan is a new contributor to IX, sharing insights from his own blog.