You’ve got to love a good mash-up. Chocolate and peanut butter. Angry Birds and Star Wars. Cookie Monster and Tom Waits.
But sometimes things don’t come together quite so nicely. Many of us focus on marketing considered purchase products. We know that these are complex, often expensive purchases that take a lot of time and research. A commodity, on the other hand, is an item that takes little consideration because there is little differentiation.
Unfortunately, there are some industries that are becoming less and less differentiated (commoditized) at the same time as their goods and services are becoming more critical (considered). This is the dawning of the age of the Considered Commodity.
Look at health insurance or auto insurance, banks, credit cards, airlines. All of these categories lack differentiation and are suffering from extended price wars, a deep lack of trust, and a similar go-to-market approach. Even politicians have become commoditized in certain markets. A voter may have a party preference, but the party line is so strong that their candidates are all saying the same thing. It’s difficult to make a well-considered choice.
The considered commodity is creating decision-making challenges for people across the economic spectrum, but will have the widest impact on your less affluent customers: those who have spending power, yet need to be conscious of how they use their money. And just like the question of whether you put your chocolate in my peanut butter or I put my peanut butter in your chocolate, considered commodities can be led by either the considered purchase or the impulse buy.
Take health insurance. The Affordable Care Act ushered in a new age for health insurance marketers. Brands that had been speaking to a select group of benefits reps were presented with an opportunity to take their messages directly to consumers. But there were two main challenges. First, health insurance brands have largely been going to market the same way. Each company touts features – wide provider networks, weight loss programs, quick claims processing and smoking cessation, for example. It’s hard to have a reason to believe when everyone is talking about the same thing.
Second, the nature of the health care exchanges is such that consumers are purchasing on price. Whether they buy the platinum, gold, silver or bronze plan, there’s not a lot of differentiation other than cost. The market itself has become commoditized.
But let’s take a look at the reverse. When Diptyque launched their new skin care line, much of the buzz was around how they might be able to compete in the already-cluttered luxury cosmetics market. Eminence Organics, for example, has so many face creams that it’s hard to know which one is right. While cosmetics generally fall into the impulse purchase category (even for affluents), when there are so many more products to choose from and so much research is needed to make a decision, these items start to slide into considered commodity territory, due to lack of differentiation and brand connection.
A considered purchase isn’t going to happen if the purchase doesn’t get considered, and considered for the right reasons. This is where marketers and agencies need to focus their efforts. Here are some ideas to combat commoditization.
Get personal. Recent research by Ipsos on financial institutions showed that affluents are likely to trust their financial advisor as opposed to the institution the advisor works for. If you are in a service category, you must acknowledge the importance of your team that provides the service to your customers on a day-to-day basis. They are the face of your brand. Given the significant influence of word-of-mouth as a marketing tool, if you have a great team on the front lines and enough customers talking about the great service they get from your staff, this will clearly have a halo effect on your brand. This personal connection is critical.
Tell the right story. We’ve all got stories to tell. But you need to tell the right story at the right time in the right place. Considered commodity brands and categories are not doing it right. Case studies and testimonials have a place in the sales process. But give your customers – and prospect – news and insights they can use. Too often a white paper is only made available to people who have signed up for your service. How is that going to help you build a relationship with your prospects? Your ongoing marcomm efforts need to give people something different, something that sets you apart. You have a story to tell. Tell it.
Experience it. Give people a chance to experience what it feels like to be your customer. Maybe it is an experiential marketing idea. Or a week where prospective customers can come to one of your branches or call your toll free number to get an idea of what it really feels like to be a customer of yours. If you’re in a more tactile category, keep an eye on technology. Fujitsu expects to launch a tablet in 2015 that lets you feel textures. Could you use this to show that your seats are more comfortable than those on another airline?
All three of these ideas acknowledge that the customer is an individual, and that brands need to try something different to be considered. This is the age of the considered commodity.
But be bold and do it quickly. Otherwise everyone in your category will be going to market this way, and the methodology itself will be commoditized.