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The notion that virtually all products and services have become commodities to some degree is no surprise anymore. The same is true for most B2B solutions. If there isn’t a directly comparable competitive option, there are always alternative avenues for a customer to pursue that are designed to deliver comparable results.
This is one of the biggest arguments against benchmarking. If your goal is to be “as good as” or “better than”, you are essentially making it an objective to become a commodity provider.
I recall hearing a long time ago that the market price of a commodity will eventually be equal to the average cost of goods for a given product or service. Doesn’t seem like a goal I would want to establish for my company.
So what do you do in order to rise above the expanding array of alternatives available in the marketplace that are chasing the same funding you are? One way is to forget about the benchmarking process, and to create an entirely new category for your product or service. Sounds good, but is often near impossible to attain. What else can you do?
Products can be made to appear similar, in form as well as function, and different iterations or approaches to deliver similar results will end up eventually being evaluated on the “lowest common denominator”, such as cost per unit of measure. Your product or service may be viewed as “indispensable”, but when viewed along with three other solutions that do the same thing, it is hard to stand out, unless you are the “cheapest”.
Instead, I would offer up that you need to make your company indispensable. What is it about your company that distinguishes you from your competition, in aspects other than product (features, functionality, design, etc.) or pricing? If you are not planning to be the low-cost provider, then you need to make sure that your customer is buying your company, not just your product or service.
The only thing that will engage a customer as much as a product that can’t be replicated anywhere else, or an outcome that can’t be delivered by anyone else, is a company that can’t be replaced by any other. Factors such as culture, flexibility, responsiveness, innovation, access, commitment, focus, accountability, and integrity are each measurable points of differentiation. Taken in total, these considerations create a compelling and complete story. Ask yourself: When a customer looks at my product (or service), how much of my company do they see?
If you take the time to strategically map out the elements that define the complete customer experience, you can readily find significant opportunities to stand apart from others in your space. Before you or one of your salespeople present a solution and a price, make sure you have already demonstrated the “fit” between your customers’ objectives, requirements and expectations and the relevant aspects of your company that assure a successful, enduring relationship. Doing so won’t replace the need for a competitive, reasonable price. But is should remedy the need to be the lowest price.
Image may be NSFW.
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