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The Old Brogue Irish Pub, Great Falls VA

By Larry Kilbourne

Products and services once perceived as unique offerings become commodities when over time in the eyes of consumers they are perceived as being indistinguishable from or substitutable by other products or services.

This process – commoditization – is the bane of marketing, whose core aim is distinguishing something as unique and valuable. Yet it is also a natural evolution in the life of most products or services where competition exists and where innovation has largely ceased. Pencils come to mind; PCs are certainly a candidate.

Not all brands, of course, become commodities. Some are so dominant within their niche that the brand name becomes synonymous with the product or service. We don’t think of making copies, but of making Xeroxes. We don’t ask for a paper tissue when we need to blow our nose, but for a Kleenex. And so on.

But for every FedEx, there are legions of products and services that have become commodities and hence no longer possess the uniqueness or differentiation that once set them apart. These pose a particularly thorny problem for marketing departments, both in recruiting new customers and retaining existing ones.

So what does this have to do with bars or pubs?

Simply this: despite the fact that most serve identical products, made and served in nearly identical ways, successful drinking establishments generally have highly loyal clienteles and have resisted the commoditization we see with so many other offerings.

When we consider why this should be so – why, for example, I prefer to take my drink at an Irish pub nearly 20 minutes away, when no less than a half dozen other drinking establishments, including an Irish pub, are within 5 minutes driving time – four elements suggest themselves.

They are: price, location, clientele, and the servers or bartenders. Of these four, I’d wager that price and location (aka convenience) are almost always the least important criteria. What are critical are the type of clients to be found at the establishment along with its proprietor and staff.

That (no surprise) is because people drink where they do primarily for the companionship and the sense of belonging they gain. Most of us who frequent bars seek out and find our own version of Cheers, where everybody knows our name.

But what is the relevance of this to marketing and commoditization? The only way – other than constant innovation – that I know of by which most products or services can hope to avoid becoming commodities is by establishing the sort of relationship with its customers we see epitomized in pubs and bars.

What is the epitome to which marketing need aspire?

• Yes, everyone really does know your name
• The bartenders (and probably most of the customers you socialize with) also know your preferences
• They ask How was your day? and What are you up to? each time they see you
• Because of this, they come to know you pretty intimately in terms of your worries and your hopes
• They – especially bar staff – come to be trusted advisors and confidants because of the interest they show in you and the honor they accord the confidences you share with them
• Over time they not only become close friends, but akin to family – sometimes closer than your actual family

If marketing is to avoid the bane of commoditization, it must learn how to treat customers like bars treat their regulars.

The corollary to this is that marketing - and sales - must approach prospects with the same skeptical eye that bars and bar regulars accord first timers. The unvoiced but universal question – among bar staff no less than regulars – is this: What is this person like? Will they fit in with the crowd here, or make us uncomfortable? Will we be a better bar for their presence, or will it diminish us?

The related questions for marketing and sales: Are the prospect's expectations for what we offer in line with our own? Once customers, will they bring additional value in the form of more business, referrals or testimonials, or will they complain constantly and make unreasonable demands?

Not every bar customer becomes a regular, either by virtue of deciding that the establishment isn’t their cup of tea, or, because the establishment decides the customer isn’t theirs. Southwest Airline's legendary founder, Herb Kelleher, was famous for 'firing' customers who in his opinion treated the staff disrespectfully or complained excessively.

But for those customers (and prospective customers) who appreciate the product or service you offer, and whose continued business is prized, more important in retaining them than anything - with the exception of product/service innovation - is building and sustaining a relationship over time. For a lesson in that - and in how to avoid becoming a commodity - I can think of no better mentor than one's favorite bar or bartender.

Copyright © 2009 by Larry Kilbourne, Ph.D. Dr. Kilbourne is an independent marketing consultant. He may be reached at lkphd@yahoo.com.