MC: 0:00

Experience Action. Let's stop just talking about customer experience, employee experience and the experience of leaders. Let's turn ideas into action. Your host, Jeannie Walters, is an award-winning customer experience expert, international keynote speaker and founder of Experience Investigators, a strategic consulting firm helping companies increase sales and customer retention through elevated customer experiences. Ready set action.

Jeannie Walters: 0:32

Can customer experience really help if you are focused on selling a product that's really a commodity? That's what we're exploring today on the Experience Action Podcast.

Listener Question: 0:48

Hi, Jeannie, this is Ingrid from Guatemala, always listening to your podcast. I have a question. What if your product is a commodity: sugar, coffee beans? Would CX be the winning strategy? Are there examples of companies that have improved their business and gained growth?

Jeannie Walters: 1:15

The short answer here is yes. Yes, customer experience can still be a winning business strategy for products that are really commoditized. This includes making things that are maybe comparable one to the next.

Jeannie Walters: 1:28

You know our caller mentioned sugar or coffee. When you think about products like that, a lot of the consumer drive might be centered on price, on convenience, on you know what's available when I'm shopping. But what I want you to think about is there are things that we earn from customer experience that maybe aren't always translated exactly into the business dollars and cents. Those are things like brand differentiation. People will pay more for products that feel different to them, that speak to their values, that help them feel like they belong to something bigger than themselves. Now, the other thing about customer experience with commodities is that it can command premium pricing. People have shown again and again that they are more willing to pay for better packaging, shown again and again that they are more willing to pay for better packaging, better experiences, better products that feel and look a little different, even if they might not be that different when you get right down to it. This is about building a competitive edge with customer experience. So if we know that brand and perceived value is important for consumer decisions, why wouldn't we invest in customer experience? If the product itself is interchangeable, then that means we have to do something to differentiate from the competition. The way the customers experience the brand is what we're going after, and CX can elevate this commodity. Now the other thing that happens is people get very attached to these brands.

Jeannie Walters: 3:10

Think about something like Starbucks coffee. When we first were introduced to Starbucks on a national level, people weren't really considering coffee in the way that they are now. Starbucks really brought that idea to us and then they kept iterating specifically around their customer experience. In the beginning, they really invested in this idea of having a third place not where you work and not where you live, but a third place to sit down with a cup of coffee, get some work done and enjoy being part of that community. That investment in the experience really led to the growth that we all know Starbucks had. Now they are continuing to iterate and evolve and they've had some struggles in the last few years, but right now they are going back to what made them who they are. They are investing in those self-service bars that customers said they wanted back. They're investing in things like providing free refills if you stay in the cafe, and more features that are really experience-driven and less product-driven. That's because they know that's what works.

Jeannie Walters: 4:20

The other thing I want you to think about is how, when you have experiences that stand out, whether it's a commodity or not you tell people about it. We know that traditional advertising just doesn't work the way that it used to. We know that people have limited views into media, meaning that we can't reach all the people we used to be able to at once. People have their own ways of consuming information and entertainment, so the best thing we have in our arsenal is really word of mouth and referral business. The more that we can get our customers talking about their experiences, the more likely we'll get those referrals that drive more and new customers into our brands. So we talked about Starbucks.

Jeannie Walters: 5:08

Now I want you to think about things like Patagonia. Now, Patagonia is a company and a retailer that focuses on outdoor and adventure wear that type of thing and what they did was they really realized that their values around sustainability would attract customers who also cared about sustainability. So, while things like a cotton flannel shirt, you can find that in a zillion places, a Patagonia shirt has a different cachet, and that's because they have invested in making sure that the cotton that they use is sustainable that they have programs that really boost their loyalty with these sustainability-focused customers. Because they are able to, for instance, shop used products I believe it's called the Worn Wear program so they allow people to sell their used Patagonia products within their marketplace. Revolutionary and innovative ideas like that are really experience-based and not product-based, so I encourage you to think about what can you do here.

Jeannie Walters: 6:21

Another great example is Liquid Death. Now, this is a water product. Really, that's all it is. They've completely disrupted the bottled water market by focusing on mostly packaging. They stood out by having tall boy cans, aluminum cans and their graphics were, as they put it, heavy metal inspired. This has led to amazing growth, especially with environmentally conscious customers who didn't want to purchase plastic bottles. They liked the idea of the more recyclable option of aluminum cans. They also now provide boxed waters, which is also another sustainable choice, but this approach that they have had has led to revenues skyrocketing from $2.8 million in 2019 to $130 million in 2022. Now, water, when you get right down to it, is pretty much water, but they stood out because of the experience they were providing through their packaging, through their unique lens. So that's what I want you to think about.

Jeannie Walters: 7:29

If you have a commodity and you think, well, we just keep focusing on the product, how can we focus on the experience? I encourage you to do a few things. One is focus on the relationships, not just transactions. What are people doing with your product? How is it changing their lives? How is it helping their business? If you can tap into that, then you can provide even more experiences to build on that.

Jeannie Walters: 7:56

Think about what the airlines did decades ago now, when they started loyalty programs. They started realizing that, yes, people could fly any old airline. They could buy one ticket from United Airlines one day and they could buy one from Delta the next. But when they started these loyalty programs, they realized if we could keep people in our ecosystem and make them feel rewarded and recognized, then everybody wins. That is an experience-driven lens. Now I will say the loyalty programs also have their unique challenges, right, so you do have to think out about is this sustainable for our business? But the more that you can focus on not just what your product does, but what it does for your customers. That's really where you can identify with. How can we improve the experience.

Jeannie Walters: 8:51

A couple of years ago, Spotify started creating those year end videos, those custom things that told people here's who you listen to the most in the end of the year. So in 2024 your top artist was Taylor Swift. People started sharing that saying isn't this cool? Because the more that we can provide insights into behaviors, the more that we can share more personalized experiences, the more people want to share those. So that's another example where they didn't think about just okay, well, people can listen to music through Spotify. They thought about what are we really doing? What can we let them know about themselves? That's another great way to think about it. So focus on relationships, not just transactions.

Jeannie Walters: 9:38

You want to make convenience king. Convenience is such a driver in customer experience that the more that we can provide convenience in purchasing and using these commodities, that the more that we can provide convenience in purchasing and using these commodities, the more likely people will be to repeat and refer. If it is more convenient for me to go around the corner and buy sugar because the store is right down the street versus maybe having something pop up on my phone and say, based on your baking. We think you might be out of sugar. Would you like to order it and have it delivered to your home? There are so many convenience-driven factors in how customers are making decisions right now that that's a great thing to look at. How can we make repeat purchases and using our product as convenient as possible? That is experience-driven. So that's a great way to do it.

Jeannie Walters: 10:29

And you want to tell a bigger story about your brand. Think about what Liquid Death did. Think about what Starbucks did. They told a bigger story. It wasn't just a cup of coffee anymore. It was about the experience. year, if about the craftsmanship of the coffee. It was about getting together in community. It was about hanging out in a cool cafe with great music. So think about what is the bigger story that you can tell. Is it about sustainability and environmentalism? Is it about the workers.? Is it about your founders? Is it just about how people use your products? All of that can really parlay into brand loyalty and relationship building.

Jeannie Walters: 11:10

And, of course, you want to leverage technology. You want to lean in to understand the behavior of your customers, not just the transactions. So if customers are always buying your product a certain way at a certain time of year. If you don't understand why, that's a great thing to dig into. Ask AI to show you those patterns of purchases. Ask AI to show you, you know what, what if we were able to provide more supply at certain times of the year, would that actually help people. Really understand how and why your customers are making those purchases in order to improve their experiences.

Jeannie Walters: 11:51

And then the last thing I want to leave you with you know, when we talk about our CXI Navigator Framework, we talk about an area called experiential innovation. If we are not constantly thinking about how to disrupt our market, somebody else is. They are about to disrupt. Because. So we actually do something that we call a disruptor day, and this is where we get together with our clients and we talk about okay, if we were disrupting this market, what would we do? Because, even if it's big, magical thinking, in that moment you will find ideas that can grow. You will find ways , connect with your customer values, understand what the product is doing for them, and once you have those insights and those innovations, then you can really start staying ahead of those disruptors who are probably chasing you right now and you might not. even know it. So never be afraid of experiential innovation. So, speaking of that, our CXI Navigator Framework if you are curious about how you're doing on your customer experience journey, check out cxicompasscom. It's a free assessment. We give you some tools at the end to really move forward and understand where to prioritize your customer experience efforts. So I hope you'll check that out.

Jeannie Walters: 13:18

Thank you so much for this question. I know that sometimes it can feel like if you're in a commoditized market or if you're doing the same thing again and again, you might think well, it's working, it's not broken. So why innovate? Well, I'll tell you why. Because your customers want you to. They are waiting for innovation, they are waiting for disruption. So why not? Why not be the leader and go ahead and disrupt? Why not be experience driven? Because we know that will build brand loyalty, build customer lifetime value, give more repeat purchases and referred customers to your organization. It is literally a win-win-win. So, yes, the answer to the question is customer experience is a winning business strategy, even in commoditized markets. Thank you so much for this question. I can't wait to hear your next one. Thanks for joining me everybody To learn more about our strategic approach to experience. Check out free resources at experienceinvestigatorscom, where you can sign up for our newsletter, our Year of CX program and more, and please follow me, Jeannie Walters, on LinkedIn.