Commoditization is everywhere. With offshore development, noisy marketing
channels, worldwide internet commerce, the last true battle front that remains
is the Customer Experience (Cx).
Today’s buyer, either
B2B or B2C (Which is becoming less and less relevant. More on that later)
values service and convenience many times over price and product and expectations
have never been higher.
Take Uber and Lyft. Both ride sharing services offer exactly the
same thing. Get me from point A to B in somebody
else’s Hyundai Sonata. What’s the difference?
Switching cost is zero. Customers will
churn over a 3-minute wait time. The difference
is the Cx. How the driver greets you.
What happens if you leave your phone in the car? What is there is a dispute? How the company handles the Cx defines whether
you will renew or churn. Cx drives loyalty.
My friend Nick Mehta has built a great company
in Gainsight on Cx being a killer differentiation
and managing the Cx is now a whole category unto itself.
The flattening of the product
and price curves have driven comprehensive commoditization across broad
industries where price and product differentiation were formerly king not just
Uber or Lyft, but Boeing or Airbus, eBay or Amazon, Cisco or Juniper. Our
parents would drive across town to save 5 cents on a gallon of milk. Today, I shop at Wholefoods, and am willing
pay a premium, for a killer Cx.
Commoditization has flattened differentiation
and the only battle front that matters is the Customer Experience.
