Customer Centric

This article has been published on the Marketing and Strategy Think tank’s blog:
“The end of this afternoon is warmful and sunny. I am cruising with my new BMW on the sea side. I can enjoy the multiple options that I have configured to get the car built according to my needs. It is now 5.00 pm on my beautiful Quai de l’Ile watch from Vacheron Constantin. I played the role of a watchmaker as I could choose from 400 different possibilities directly on a touch screen. I had some fun this morning when I have associated my personalized tee-shirt with my Converse sneakers designed by myself. I am sure to impress my friends as I picked-up my own design out of a range of millions of different options. Anyhow, the killer at Tom’s party tonight will be my own branded M&M’s“

Personalization or customization is becoming the Holy Grail of consumer centric strategies.

Whatever the product or service you are looking for, you will get the opportunity to adapt the product/service to your needs.
The development of new technologies (internet, ADSL, Flash) has allowed user friendly interfaces and a better alignment between on & off line activities. The Build-On-Demand manufacturing process is the natural implication of offering such diversity to final consumers (and the other way round).
This option is usually ranked within the top preference criteria by consumers (e.g. ranked in the Top 10 for on-line buyers in France, source FIA.Net.com research, May 2008).

What is the best way to achieve customization?
As always, there is not a single answer and it depends heavily on the brand’s objective: acquisition, retention, cross-selling, image, awareness…

A review of current practices and initiatives across various product categories can give us a good sense of the most appropriate approach related to a specific brand building objective.
This review is not exhaustive and some specific sectors could be further analyzed based on your comments and suggestions.

You can access each of the brands’ website by clicking on the links on  page 2 (bottom of this page).

Usage
The consumer is able to influence some core characteristics/functionalities of the product.  The success of  Dell and  Firefox stems from their ability to define your product/service based on the functionalities you want. It is cool to blend your own wine with Elite Vintners.

Services
The objective is to provide consumers with personal recommendations in order to propose the most appropriate offer/product. It is more popular within sectors where standardization of production and deep portfolio of products are common practices.
Vichy cosmetics provides you with almost a dermatology consultation on-line which does support a credible products’ recommendation. The retail chain H&M offers the opportunity to design your own character according to your body’s shape and then try virtually different combinations of clothes.

What does make the difference vs competition?
Fulfilling the needs of consumers is nice but ultimately this approach needs to support a clear differentiation vs competitors within the same category.

Some highlights
- Personalization could be a generic proposition in some product categories (cars, computers and sport shoes) which is minimizing the impact of such initiative
- Personalization (and not tailor made) for some major luxury brands is not necessarily a major pillar (e.g. Louis Vuitton) or is not strong enough to create a significant gap vs competition (e.g. Lonchamps)
- A clear added value is brought by brands differentiating themselves through a personnalization based on 2 dimensions: design+usage (Vacheron Constantin or Elite Vintners) or usage+service (Vichy or H&M)

Overall Conclusions

• Personalization is extremely relevant in product categories where emotion plays a key role into the consumer’s decision process (e.g. cars, luxury goods…)
• Accessories can be an effective way to achieve personalization without impacting the integrity of the product (e.g. Harley Davidson, iPod)
• It helps to build image on the long term if there is an on-going up-date of personalization features (e.g. Firefox)
• Customization based on services is relevant for mass-products and retailers
• Personalization doesn’t mean automatically much higher price than standard products

My personal takeaways would define an effective customization as a balance between specificity to the brand, combining design & usage and new features released regularly!

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