Luis J. Murgas

In a commoditized market, why do customers buy from you?

It’s time to go beyond quality, price and service as the standard answers and look to digital tools and the customer experience—in other words, how easy it is to do business with you. The customer experience is the journey customers take to find your business, make inquiries, place orders, receive updates, address concerns, and engage with you after purchase and during the useful life of the product.

While quality, price and service are foundational components of running a decent operation, we’re now operating in a world of faster competition and dizzying options. Those three components are standard features, not standouts. Customer experience is what truly differentiates your business.

A simple matrix looks at the different roles customer experience plays in moving a business forward. The four quadrants are on a sliding scale of high to low commoditization and high to low customer experience.

First Quadrant: High commoditization, high customer experience

Customer experience is an operational excellence exercise, one that is crafted and refined.

A 10-year Harvard Business Review study of 12,000 companies found that this type of organizational competence is hard to imitate. The gains in this quadrant can be a longer running competitive advantage with lower returns.

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Second Quadrant: Low commoditization, high customer experience

Finding a way to differentiate your product can lead to increased pricing and features that others don’t have.

Studying, reshaping and creating a smooth experience drives customers to choose you based on emotional reasons—they are rewarded, instead of frustrated, by interacting with you. Longer term, it means picking you as their starting point for other product searches.

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Third Quadrant: High commoditization, low customer experience

A business in this space could have a golden opportunity to address commoditization, customer experience, or both—and they should focus on it sooner rather than later. Staying in this quadrant is likely to lead to market irrelevance.

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Fourth Quadrant: Low commoditization, low customer experience

A move to this quadrant can generate a quick return, especially if the improvements significantly impact a customer’s result. However, the downside is that most physical innovations in products are easily copied by competitors.

The result is a short burst followed by the commoditization of the newer version of the product/service.

Since gains in the customer experience space are harder to imitate by competitors, focusing there gives you a longer runway to continue competing in the never-ending product innovation space.

Digital tools and access to scalable technology can help you invest in this journey. In fact, digital tools are another way your business can stand out from the competition. They are critical to making it not only easy to do business with you but also profitable.

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Using digital to stand out

Digital solutions continue to prove themselves as reliable investments as well as flexible tools to innovate the business model.

For example, let’s look at a customer experience case study: An overhead door manufacturer that used their B2B online portal to make it more profitable for customers to do business with them. They went beyond quality, price and service standards in a commoditized market to stand out to their dealers and distributors.

They started by reframing their perspectives and goals. That meant they didn’t just stop at asking how they could make it easier for dealers and distributors to do business with them. They also started asking how they could empower dealers and distributors to be more successful in achieving their own goals, as well as what role their manufacturing organization could play in that success.

The ingenious answer was to figure out how their digital order management tools could be placed in the hands of their dealers/distributors’ salespeople to serve their own customers and prospects.

The manufacturing organization invested in their digital tools with the goal of making it easy and profitable to do business with them. The new solution empowered their partners with driveway mobile tools:

• The power of visuals: Dealers’ salespeople were given access to digital tools that could create a high-quality, photorealistic image of a potential door at the client’s location. By simply uploading a quick image taken onsite, the customer could start making product selections to meet their needs and desires.
• A fully configured product: The system matches all customer selections with necessary parts and pricing to meet their needs, while ensuring that only valid combinations are available at every step of the way.
• Immediate and dynamic pricing: With a valid product configured, the manufacturer made investments to be able to calculate the pricing immediately. Before, all the various complexities used to force a “call for quote.”
• Close business on the spot: The system allows the salesperson to generate all the necessary information to close the deal on the spot.

Which option would your distributors prefer? To submit the order to the manufacturer and drive on to the next prospective sale? Or to return to the office, pull up paper or PDF catalogs from another manufacturer, try to recreate the customer’s vision, recalculate pricing and submit the information to the prospect to sign?

By enhancing and streamlining the salesperson’s experience, the manufacturer is empowering them to close more business, visit more potential prospects, improve their own commissions, reduce their paperwork and share valuable data—all with tools that work smarter.

Luis J. Murgas is a principal of Wipfli Digital. He has worked for a variety of industries including manufacturing, healthcare, insurance, and finance, for organizations including Fortune 100 companies, government agencies, the military, and start-ups.