Let’s see how good your memory is…do you remember Pan American Airlines? How about any of the following 12 Brands?
Do you know what these companies all have in common? They were all once iconic/recognizable Brands that no longer exist! Each went from iconic Brand, to market leader to market follower to one of many (a commodity) to being acquired or out-of-business entirely! These companies are proof that it is a very short journey from commoditization to obsolescence. So why do successful Brands become commoditized? Based upon our research here are the top 12 reasons:
- Market saturation/Too much supply
- Lack of perceived value/Inability to articulate value
- To many competitors
- Inability to differentiate product, service or Brand
- Competitors offering discounted pricing
- Internet providing “free” or “low cost” solutions
- Market believing they can get the same products from someone else
- Maturing market
- Lack of innovation/product development
- Ignoring trends, market place conditions, competitive forces, etc.
- Reacting to competitors (or the market) versus being proactive
- Rapidly changing technology/innovation
So what actions should a company take to avoid commoditization? Here are some best practices to avoid the commoditization trap:
- Find your voice…your unique market message (Leverage your Brand Positioning Strategy
- Understand how your customer defines value (Quantify the value you bring)
- Be an expert on the unique needs of your customer (Offer solutions to address their needs)
- Better leverage social media (LinkedIn, Facebook, Twitter and YouTube)
- Become the subject matter expert (SME)
- Weave a web of influence…avoid single-point failures
- Sell value…not price
- Assess and focus on your strengths…not your weaknesses
- Provide quality products/services at a fair price
- Deliver customer service excellence…delight your customers
- Make complex solutions less complex
- Create visions for new ways of doing things
- Don’t let your competition define you…articulate your Value Proposition