Prevent the Commodification of Your Business

There’s no doubt about it… times are tough. Regardless of the Fed’s pronouncements that the recession may be over soon, I’d bet not a single person reading this column (unless you run a porn site, but that’s a different story) isn’t feeling the pinch in one way or another.

Irrespective of your business or your economic theories, one thing that’s pretty ironic about the whole situation is that the Internet’s contributing to the pain many of us are feeling. But I’m not talking about the dot-bomb implosion. I’m talking about commodification.

Yup, commodification. For a long time, one of the most loudly touted benefits of the Web was its ability to let people around the world access companies 24/7. “Yes,” we were told, “you and your business will be available to anyone in the world any time of the day! Isn’t that great?”

To some extent, it is. In fact, most of us couldn’t imagine life without the Internet and the Web. It’s what we do; it’s where we live; it’s how we get business done. But the same qualities that make the Web so vital to our work speed, ubiquity, global reach, connectivity, and interactivity are also qualities that can work against us if we take them for granted.

That’s because the Web tends to turn businesses into commodities — no matter what that business is selling. Before the Web, businesses could carve out profitable little regional niches based on their skill sets. They didn’t have to worry about competition from the next state and definitely didn’t have to worry about competition from overseas. Location insulated them and allowed them to grow.

Before the Web, products also enjoyed the insulating benefits brought about by distance and location. In many ways, salespeople actually mattered. A customer coming in to your store could be sold because he or she didn’t have instant access to all the information in the world and definitely couldn’t pull up specs on competing products with the touch of a button.

We don’t live in that world anymore.

Today, one business is just as “far” away as any other business. Contracting your development work to a start-up in Croatia or Russia isn’t any more difficult than getting a bunch of programmers on the other side of the country to work for you — and the work is probably cheaper and better than what you could get from those U.S. programmers anyway. If you live in L.A., hiring a media-buying firm in New York is routine. If you’re looking for an ad agency and do your searching on the Web, you may be just as likely to hire a firm across the country as across town.

And once you get your shortlist of potential vendors, agencies, partners, products, and so on, comparing their stated features and benefits becomes a piece of virtual cake. Everybody’s got a Web site with descriptions of what they do, their clients, awards, portfolios, and so forth. Just download, print, spread out, and compare.

We’re all becoming commodities. No matter what business we’re in — from retailing to design, from media buying to application development, from Web development to industrial sales — now that our prospects and customers can compare us to our competitors with the touch of a button, our differences are rapidly disappearing.

So how do we survive? The answer isn’t just differentiation. You can only stray so far from the industry norm before you become unbuyable. No, the answer is to avoid commodification by emphasizing your business’s intangible aspects that can’t be easily copied or compared. Service, intelligence, value, and brand — these things and more are going to keep your company surviving and thriving in tough times.

Want some more ideas? Here are 11 tips to avoid becoming a commodity:

  1. Humans trump computers every time. We’ve all gotten so used to automation that it has ceased to become a competitive advantage. Remember when PowerPoint actually impressed people? The human touch can’t easily be copied.
  2. Service matters most. Likewise, though products are easily compared, features copied, and designs knocked off by cheaper competitors, service can’t be so easily duplicated. Concentrate on actually working for your customers with their best interests at heart, anticipating their needs, and standing out by serving them effectively.
  3. Details, details, details. The Devil is in the details, and he’s tough to tame. Creating an aura of quality starts with the smallest detail of every meeting, the presentation of every document, and the speed at which your Web site loads. Any competitor (especially young, cheaper upstarts) can copy what you do at a macro level, but only a true professional can get everything right down to the smallest detail.
  4. Analog makes an impression. Digital media has become so ubiquitous that we’ve all ceased to be impressed by its usage. On the other hand, analog media stands out. Revisit the handwritten thank-you note. Send gifts. Send professionally bound reports. Don’t always take the easy email route, especially for important things.
  5. Personalization doesn’t always come from log files. You can’t rely on knowing your customers by analyzing their behavior in your fancy-schmancy log file analysis program, market intelligence reporter, or sales report. Get out and talk to them. Don’t just look at what they do, try to find out why they do it. Tailor your communications accordingly.
  6. Put yourself in their shoes… and spend your own money. Testing your site isn’t enough. If you’re going to be serious about discovering the service glitches in your organization, you’re going to have to become a customer — even if that means spending your own money. You’re never going to know what they feel like until it’s your own cash on the line.
  7. Go long. Dot-bombs imploded because many were looking for the quick buck. Today, there’s a temptation to cut corners to get sales immediately. Don’t knuckle under. A happy long-term customer is worth far more in the long run (especially when you add in the benefits of word of mouth) than an unhappy one-time customer.
  8. Be easy to find. Don’t neglect your Web search positioning efforts. Read ClickZ’s Search Engine Marketing column, and go to Search Engine Watch to learn how it works. Then apply what you learn to your own site. The Web is now the first stop on a search for any business. If your prospects can’t find you in a search engine, you don’t exist.
  9. Think F2F for B2B ROI. Although world events have resulted in the decline of business travel, and electronic media such as video conferencing, Webinars, and email have become attractive alternatives, don’t neglect the power of face-to-face meetings with your customers. Anybody can send an email, make a phone call, or set up a videoconference. It takes a truly committed person to meet in person.
  10. Listen to the marketplace and provide unique value. Jupiter/Media Metrix just published a fabulous report on how interactive agencies can survive the current trends. I’d love to link to it, but I can’t; you have to pay big bucks to subscribe to the service. Sorry. But I pay the money, and I find it useful because having access to the thoughts and resources Jupiter offers gives me an edge. Jupiter has listened to the marketplace and differentiated itself by providing info you just can’t find anywhere else. If you’re different and provide value that just can’t be gotten anywhere else, you’re in good shape.
  11. Think! Yes, think. Things aren’t as they were a year or even six months ago. The world is constantly changing. You’ve gotta be one step ahead of the changes. Using your noggin is something that computers (and your competitors) can’t do. You’re only a commodity if you stop thinking.

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