What do Mini Cooper, Dell Computers and the music provider Pandora.com have in common? They all give their users a customized buying experience.
According to “Cracking the Code of Mass Customization,” a recent article in the MIT Sloan Management Review, mass customization is a great way to better align your business with customers’ needs and is probably easier to pull off than you think.
Authors Fabrizio Salvador, Pablo Martin de Holan and Frank Piller have conducted research on mass customization for the past decade and have reached the conclusion that “mass customization is not about achieving some idealized state in which a company knows exactly what each customer wants…. Rather, it is about moving toward these goals by developing a set of organizational capabilities that will, over time, supplement and enrich an existing business.”
Here are the three steps companies must take to begin mass customizing their offerings:
1. Identify space where customer needs diverge the most
Unlike mass production, which tries to fit universal customer needs, mass customization begins with figuring out how shoppers’ desires differ and deciding upon the most useful product features to customize.
2. Achieve levels of mass production reliability
One of the challenges of mass customization is ensuring it doesn’t impede upon supply chain operations. “For this, the business needs a robust process design — the capability to reuse or recombine existing organizational and value-chain resources — to deliver customized solutions with near mass-production efficiency and reliability,” the authors explain.
3.Minimize complexity and offer sets of options
If mass customization offers too many choices, customers may find the selections too overwhelming and spend their money elsewhere. However, companies can minimize this risk by implementing a system that offers a set of options based on personal information provided by the customer. This principle can be seen in action on Amazon.com, where its personal recommendations for each user are based on the individual’s past purchases.
While the authors concede that it is difficult to make the organizational changes to implement mass customization, they claim that doing so will lead to long-lasting competitive advantages. For those wanting more information on how to get started, “Cracking the Code of Mass Customization” offers some very useful and practical advice.
Colored eggs image courtesy of Flickr user RichardBH, CC 2.0
