Designing Growth through Customer-Centric Services in Commodity Markets
service innovation / growth and competitive strategy / commodity markets
17 November, 2025
Escaping Price Competition by Reimagining Value
Commodity suppliers often face the brutal reality of price transparency and minimal product differentiation. Customers, empowered by online tools, are highly sensitive to cost and less engaged with their providers, creating volatile revenue streams and diminishing profitability. Traditional product-centric logic leaves firms vulnerable to relentless price wars.
The critical challenge for executives is to redesign their value propositions to move beyond commodities as standalone products. Instead, value must be co-created through services that support and simplify customers’ workflows and deliver meaningful experiences. This strategic shift enables providers to achieve sustainable differentiation and growth.
Embracing Service Design Thinking: A Human-Centered Innovation Approach
Service design thinking offers a comprehensive toolkit to facilitate this transition through a structured, iterative process focused on empathetically understanding customer needs and co-creating solutions.
This approach involves four dynamic phases:
- Exploration: Deep qualitative research including interviews, customer observations, and competitor landscape analysis. Immersions such as “service safaris” enable designers to experience services from the customers’ point of view, identifying opportunities and pain points that traditional methods might overlook. This phase often reveals layered insights: the end user’s interactions, emotional responses, and even intermediaries who assist in service usage.
- Creation: Collaborative ideation grounded in personas representing customer archetypes helps generate relevant, context-specific concepts. Creating low-fidelity prototypes such as role-plays, paper mockups, and simple video stories concretizes intangible service experiences, enabling teams to visualize processes and capture feedback before investing heavily in development.
- Reflection: Testing prototypes with customers and stakeholders through interviews and focus groups drives refinement. Narrative-driven storytelling prototypes, like animated videos featuring relatable personas, effectively communicate novel services and elicit detailed responses, building trust and engagement early.
- Implementation: Embedding new service models into operational and structural frameworks requires careful adaptation of internal capabilities and ongoing iteration in communications strategies. Regulatory and organizational complexities, typical in commodity sectors, must be navigated tactfully.
Lessons from a Utility Industry Transformation
An illustrative case is a gas supplier challenged by fierce price competition. The company traditionally catered to cost-sensitive customers through a single pricing model and digital self-service. However, paradoxically, many older customers delegated contract management to helpers, highlighting a disconnect between service design and actual user behavior.
The service design team identified targeted solutions to build loyalty and meet real-world needs:
Long-Term Customer Rewards: Subtler loyalty discounts rewarding tenure rather than aggressive new customer acquisition campaigns.
Senior Customer Discounts: Offering incremental benefits to an ageing demographic, framed positively to reinforce pride and confidence.
Combined Contracts: A novel service allowing an authorized helper (e.g., a family member) to administer multiple customer accounts through a shared interface.
Iterative prototyping, including “scribble” video narratives of these personas in context, guided refinements informed by user feedback. Users valued simplicity and convenience far more than high discounts and were cautious about complexity. The final launch featured a 24-month contract with fixed pricing and an administrative option enabling helpers to manage accounts, both delivering differentiated value in a commodity market.
Strategic and Organizational Implications
Executives must acknowledge that shifting to service-dominant business models demands:
- A wholesale mindset transformation: From product delivery to service orchestration that integrates cognitive and emotional customer needs.
- Cross-functional collaboration: Design teams must work alongside marketers, IT, legal, and operations to enable seamless service adoption.
- New competencies: Expertise in qualitative research, visual prototyping, narrative communication, and iterative feedback integration.
- Agile governance: Incremental innovation balanced with risk mitigation in a regulated, traditionally conservative environment.
Guiding Principles for Leaders Planning Service Innovation
See the bigger picture: Invest time in immersive, user-centered research to uncover latent needs and ecosystem interdependencies that may enable transformative service design.
Select the right prototyping: Utilize quick, adaptable, low-cost prototyping methods for ideation and testing, fostering collaborative creativity and early buy-in.
Communicate via narratives: Craft simple, relatable service stories that engage customers emotionally and cognitively, improving clarity and feedback quality throughout development.
Thoughtful Questions for Business Leaders
- How deeply does your organization understand customers’ real-life processes and emotional journeys beyond transactions?
- What capabilities do you currently have to prototype, iterate, and test new service concepts with customers before launch?
- How well aligned are your current pricing and service models to create trust and convenience rather than just cost savings?
- Who within your ecosystem influences the customer experience, and how could your services better support them?
- What organizational and cultural changes are necessary to shift your company mindset from product to service innovation?
- How prepared is your leadership to integrate human-centered design with strategic growth initiatives that transcend commodity competition?
Transforming commodity businesses through service design thinking offers a proven path to sustainable growth by creating distinctive offerings attuned to genuine customer needs and behaviors. This evolution requires visionary leadership, disciplined execution, and relentless focus on the human side of innovation.
At International Growth Solutions, we specialize in partnering with forward-thinking executives to navigate this complex transformation. Our tailored consulting services empower you to develop innovative, customer-centric value propositions, align capabilities organization-wide, and successfully implement growth strategies that break the commodity mold.
Ready to Drive Sustainable Growth?
Partner with International Growth Solutions to unlock your company’s full potential through tailored strategic consulting, interim leadership, and board advisory services—customized to meet your unique challenges at every stage of your growth journey.
- Strategic Consulting: Customized solutions for sustainable, measurable growth.
- Interim Leadership: Experienced CxO and executive support to lead complex transformation initiatives and growth journeys.
- Board Advisory: Trusted guidance on growth strategies, governance, and risk management in evolving global industrial markets.
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Inna Hüessmanns, MBA
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