An unexpected commodity…

One of our customers recently won a particularly large contract for the self service systems they manufacture, and had a post project de-brief with the customer last week. They were surprised when their Commercial Director observed that in a commodity market place their service capability was a key differentiator. While they knew their service capability was strong – they had worked hard to make it so – that their hardware was viewed as a ‘commodity’ raised a few eye-brows.

Two observations relating to this exchange – one, that strong systems can generate benefits within the related operational area and can also be harnessed as part of the sales and marketing drive to create competitive advantage. In these guys case, the slickness with which they run their support and repair functions became a key part of how they positioned themselves in relation to the competitors.

Two – it matters not a jot that we might think our products are the greatest thing since sliced bread, it’s what the customer thinks that counts. We may have spent man-years creating product features that we be feel sets us a part, but if the client thinks what we produce is an undifferentiated commodity, it’s an undifferentiated commodity.

Ultimately I suspect way too many organizations over emphasize the bits of their operation that just aren’t that important to their customers, and neglect the bits that are. But perhaps the more interesting thought is that our customer took a service desk and a team of engineers, something that couldn’t be protected by patent, didn’t require a huge R&D; budget, in essence an ordinary mundane function, and developed the systems and processes that turned it into a critical advantage. It makes you wonder how much potential we all have in doing the ordinary stuff exceedingly well.