That's interesting … a post in Customer Experience Crossroads by Susan Abbott reveals an interesting tug of war going on between Marketing and Economics.  According to Abbott.

"…..Commoditization dissolves loyalty….The backdrop to this story is that the whole retail banking industry is characterized by increasing commoditization. Product and price innovations are quickly matched. Reasonably fast, accurate and responsive service levels are thought to be table-stakes to compete at all."

This is how I read the finding - and I'm taking a broader view than the December issue of Banking Strategies with it's concept of customer sacrifice.   The more a company makes it's products and services a commodity - the less loyalty it can expect - meaning that over commoditization might actually be going after short term gains and long term ruin.

Don't think about it just as a Banking Industry problem …… it's everywhere.

If you look at the PC Industry - it hardly matters which brand you buy (most PC's and monitors come from the same factories in China - anyway (you did not know that?) …. only the designs are slightly different) - it's all about price and processor performance now.  

So we might come to the concept that it's important NOT TO COMMODITIZE your service if you want it to survive - long term …or at least - move the "goodies" up the value chain so customers still want to do business with you after your price goes higher than any competitors (and there are tons of competitors out there than can undercut most companies bottom line prices……we've seen more and more of that happening - and it's both destroying many jobs and families while creating opportunities for new jobs (but often worse than the one's lost).

All of this churning - caused by commoditization - drives the engine of change - and it depends largely on the individual - to make change a friend rather than an enemy.  Often people are stuck in dead end jobs anyway - and commoditization forces them to have to change - and it ends up being better.   But often - it ends us being worse - much worse than what they had before.

And in some cases - you've got no choice - if you don't make your service a commodity - your competition will. 

The only way to stand out is in service, offerings, on site research - as I told The House Designers, when I still did their SEO, - you can't really compete on price because House Plans and the Architects are now perceived by house buyers and home builders (your target audience) to be a commodity (with dozens of sites offering more or less - the same thing) - you have to offer much, much more for your visitor  - or else people will stop buying from you unless yours is the lowest price for that thing (because there's no meaningful difference between them and the competition) - and that's what appears to be happening, more and more every day to them and many of the others in that segment. 

What's even stranger - most architects from that site all sell their plans on their competitor's sites - like eplans.com, globalhouseplans.com, and so on.  So not only are their own channels commodities - but they're competing against themselves!

I guess it's not so strange after all - many of the competing hotel chains in Orlando and Miami are owned by the same people - same thing with the restaurant chains.

The main difference in hotels and restaurants is branding, services and price - and that is it - it sure is not the product itself (be it PC's, architectural house plans, hotels or dining out) - which is pretty much the same thing - where ever you get it from - because it's a commodity. 

I am still working with one architect that's more open to change, but the rest have blinders on.

But doesn't the customer win with Commoditization?  Yes - but not if he or she loses their  "Commodized" job…and that's what happening …. big time. 

So if companies want LOYALTY (and want to be around to measure it)……it's time to consider they may be the next "PC" story.

SEO is now almost a commodity - not the higher end of SEO for Corporations - but on the lower end, for smaller businesses - everyone now has an opinion on SEO and how it should be done.  Everyone wants to do it themselves and not have to pay for it - do it cheap.

It's everywhere - everyone wants the "free" traffic Google provides or wants to use Search Marketing to drive traffic to their sites that they can control.  It's Ironic that just now ….. it's much harder to rank well because there's so much more competition (From everyone else who thinks it's easy and wants free traffic) - and from the Search Engines - indexing so much more content - the odds are against ranking well unless you have a lot of backlinks from relevant sites or are going after a niche category.

Many of the best of us moved up the value to chain to Web Analytics - because that's much harder to Commoditize - and way more interesting. 

But if, if 5 years from now - there's a book called Web Analytics - one hour a day ….. like there's one for SEO, and everyone wants to be a Web Analyst of their own data - it will be time to move on to something else. 

In a way, Google is enabling people to begin on that path with Google Analytics - but Google Analytics is way more powerful than what most use it for - so there's still a high end - as most people don't know how to use the advanced features of Google Analytics - and carry it all the way through - there's channel partners for that.

And Susan points off that LOYALTY pays off:

"….And there is pretty significant proof that loyalty pays: this rese
arch showed that loyal customers bring 24% more deposit business and 14% more consumer loan business to their primary bank, as well as being three times more likely to recommend their bank. These stats are not new, and many researchers have found similar data. [and dear reader, I'm sure you know this, even if you didn't know the stats!]".

Interesting and sobering reading on a Sunday evening.