Commoditization is one of the most important business principles to understand as a luxury real estate marketing professional, if you are interested in market leadership.  Take real estate websites, for example.  The key features are the same on most sites: IDX search, Featured Listings, local information (available to anyone), etc.  These features become commodities.  Attempting to compete, on the basis of features that are readily accessible to your competition is futile.

What is a good way to decommoditize? Very little content on agent websites is unique or original.  That is why your blog is such a great opportunity to stand out. But, if your blog content is not original it too becomes a commodity.  A great blog is key, but you need more de-commoditize.

Here is an example of commoditization in action.  As a direct blow to Netflix, Amazon just announced that it will bundle its streaming video service with its Prime Shipping Service.  Why pay for both services when you can get streaming movies free as a Prime customer.   When all features are the same in a product or service category the only thing left is to compete on is price.

Over 100 tablet computers brands are expected to be launched in the near future.  For all of those that will use Google’s Android platform, the only way to differentiate one from the other is by features. Once they all basically have the same features price is what gets the axe. Soon smart phones and tablet computers will be given away as part of a bundle of other services.

We are not suggesting that you should offer lower commission rates to become more competitive.  We are suggesting that you develop a value added service that renders your competition irrelevant.

In China, which is now the world’s largest market for computers, Apple is planning on opening 24 new stores. In Shanghai, 40,000 people come to the Apple store every day.  With the high caliber of services offered at the stores, including classes and access to staffers who can answer your questions in person, the value added to your purchase runs circles around the competition.

How can you de-commoditize your luxury real estate marketing practice? Make your competition irrelevant by adding an extraordinary promise of added value! 


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