No matter how mundane your product or service is, chances are people have different needs around it today than they did a few short years ago. As the world, economy, and culture changes, so do people. Their reasons for buying something yesterday may be different from their reasons today. As such, you need to always be looking at what your customers’ current needs are and then find ways to de-commoditize your product accordingly.
For example, most people think electricity is electricity. Whether you turn on your lights at home or at work, the current running through the wires is the same. Complicating the utility industry more is that in some locations, if you want to raise your rates, you have to get your customers to agree to the rate increase. So how can you de-commoditize electricity? Look at the customers’ needs.
Consider that most businesses these days have a lot of computers and servers and other equipment. They can’t afford for their electricity to turn off no matter how big a storm comes through. They also don’t want the electricity to vary in voltage, as that can harm sensitive equipment. So what if the electricity company offered “digital electricity,” which never went out and never fluctuated? Yes, it would cost more, but if the need is there, people will pay for it.
That’s exactly what happened when one electricity provider started offering its business customers digital electricity. Big companies like Microsoft, Google, and Yahoo signed up. But this electricity company shouldn’t stop there. Today’s homes also have computers, gaming equipment, medical devices, and other things hooked up to electricity. There’s no reason that consumers wouldn’t want digital electricity as well.
So look at your product or service and identify a new need people have. Then, put a service wrapper around the item so you can charge more for it.
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