No, this isn’t about pork bellies or wheat, corn or cattle futures. Rather, it is about the natural inclination of all of us to try to equate the value of a product or service to just price. If price is the only differing factor, it makes our decision much easier. Of course that is rarely the case.
When sufficiently analyzed, the vast majority of products and services have many differences, some subtle and some distinct. Not all of those differences, however, carry the same weight with all potential consumers of the product/service.
For example, a taxpayer expecting a refund will likely place much more value on having her return completed quickly than one who is expecting to owe money, and may even be willing to pay a premium for such speed.
I’m not talking about price shopping once you’ve decided on the product; that’s just being an intelligent consumer. I’m talking about if you’ve decided on a 50” LED flat screen television with 1080 dpi, then picking the manufacturer that has the lowest price. I’m sure there are many other differing features, some maybe unique, that Samsung, Toshiba, Sony, Panasonic et al have to offer. Yet to analyze them all would be mind-numbing and time consuming, so we may just go with the lowest price.
That happens quite often with life insurance and especially with term insurance. But even term policies (and certainly every other type of life insurance) have differences that could be very meaningful. For example, some 20 year term policies are convertible for 20 years while others only for 10 years. And while that extra 10 years of convertibility certainly has some degree of value, it would have no perceived value to a person not planning to covert.
So it is up to each of us not to let our product or service become commoditized. And how do we best do that? By communicating the value to the potential consumer. Because we are so familiar with our own products, we sometimes tend to think that the end user is also and neglect to explain the value. I know I am sometimes guilty of this. For example, did you know life insurance has a money-back guarantee? That’s right. All through the underwriting process and up to 10 days after you take delivery of the policy, you can receive a total refund just for the asking.
There are unique characteristics attributable to all products and services, be they architectural drawings, audits, wills or just our own personal services as an employee, and it is up to each of us to make sure that the end user understands those aspects that are meaningful to him.
I realize that consumers don’t care about every feature or aspect about our product or service. But some of those features are important to them, and if not communicated to them, they may take their business elsewhere. None of us, whether we are business people or employees, can afford to become a commodity.