Webster says a commodity is an item in demand in the marketplace but which is supplied without differentiation across a market. For example, a soybean in Shanghai is pretty much the same as the one you could buy in Sheboygan.
Here is some 21st century tough love: EVERYTHING your small business sells is a commodity, not just soybeans. Any questions?
That includes every product your customers can hold, carry, break, drive, wear, eat – you get the picture. It also includes things you can’t see, like service. That’s correct: From this day forward, even service is a commodity. The ONLY thing about the relationship between your business and its customers is the way they feel and think about the experience they have with you. That’s it! EVERYTHING else is a commodity.
Instead of spending the next week detailing why the last sentence is true, I’ll show mercy and merely ask you to look around at your own experiences in the marketplace. How many sources do you have for whatever you may need or want to buy? The answer is anywhere from many, in terms of your physical marketplace on Main Street, to practically infinite, in terms of the virtual marketplace on the Internet. And I’m sure you’ll agree that if the search is refined down to a handful, at least two will be in a virtual tie on price vs value, product array and quality service.
So, when your small business makes it to a customer’s final two, what makes them choose the winner? Here are some classic reasons. The winner’s employees remember the customer’s name, or remember what the customer likes, or smile more, or act like they appreciate the customer’s business and actually say so.
Now let’s look at some 21st century reasons: The small business winner has a website where prospects and customers can shop, or has a blog and/or email newsletter from which useful information is delivered, or allows customers to follow them on Twitter, or notifies customers electronically when new products and supplies are available, or allows customers to comment on a website or online community about their experiences, or anything that recognizes that customers are busy and helps them stay connected, even when – perhaps especially when – the customer isn’t buying.
It’s not easy for small business owners to think of their wonderful offerings as just another soybean. But get over yourself and start thinking about the only thing that will differentiate you from all the other competitors: the classic things customers have always wanted and those 21st century elements that are brand new, but no less compelling.
Recently, on my small business radio program, The Small Business Advocate Show, I talked about the commodity thing. Take a few minutes to listen, and be sure to leave your comments.