How can a company liberate itself from the death spiral of product commoditization?
Executive Summary
Competing on price is generally a losing proposition—and a very exhausting way to run a business. But when a market matures and customers start focusing on price, what's a business to do? The answer, as counterintuitive as it may seem, is to deliver a better customer experience, says Watermark Consulting's Jon Picoult. Here Picoult urges insurers to follow the examples of Nike, Starbucks and Apple—companies that broke free from the commodity quicksand by creating an experience their target market was willing to pay more for.Competing on price is generally a losing proposition—and a very exhausting way to run a business. But when a market matures and customers start focusing on price, what’s a business to do?
The answer, as counterintuitive as it may seem, is to deliver a better customer experience.
It’s a proposition some executives would reject outright. After all, a better customer experience costs more to deliver, right? How on earth could that be a beneficial strategy for a company that’s facing commoditization pressures?
Go From Commodity to Necessity
There are two ways that a great customer experience can improve price competitiveness, and the first involves simply removing yourself from the price comparison arena.
