Collaborative Customization: The Exploring Experience
First, customers sacrifice when forced to make difficult and multidimensional either-or choices, such as length versus width, complexity versus functionality, or amount of information versus relevancy. The inability to resolve these trade-offs with mass produced offerings propels many customers to work with such mass customizers as Dell, Andersen (windows), and Ross Controls, all of which employ collaborative customization, a process by which a company interacts directly with customers to determine what they need and then produces it for them. Collaborative customizers let customers explore ways to obtain what they desire in one dimension of the product without having to sacrifice in another dimension.
Figure 5-2: Approaches to customization (types of sacrifice)
Dell's customers need not buy standard computers off the shelf of the nearest big box retailer but instead can go online to order only and exactly the system they want. Ross Controls customers no longer must wait months for a new product to come off the line. Instead, they explore with their ROSS/FLEX integrator potential improvements in their processes through successive, rapidly manufactured prototypes. And Andersen customers no longer have to wait for their homes to be built to see what the windows will look like. Instead they get to see the final outcome on a computer screen after exploring myriad possibilities with an Andersen distributor. A host of celebrated companies—adidas and Nike in athletic shoes, Tennant in floor-cleaning equipment, The Hartford in insurance support, Build-A-Bear Workshop in stuffed-animal toys, McGraw-Hill in textbooks, to name a few—embrace collaborative customization as a means of reducing the sacrifice prevalent when customers face too much choice and unnecessary trade-offs. The end result: a new kind of design experience.
Consider choosing a pair of eyeglasses. Few people can walk into a store and easily figure out exactly what frames they want by wading through the row upon row of empty frames placed in tray after tray on shelf after shelf. Yet Japanese company Paris Miki draws exact eyewear specifications from each interaction with consumers, thanks to collaborative customization.
The Tokyo-based company, one of the largest eyewear retailers in the world, spent five years developing the Mikissimes Design System. This design tool both eliminates the customer's need to review myriad choices when selecting a pair of rimless eyeglasses and turns the design interaction into an exploring experience. The optician first takes a digital picture of the consumer's face, which the Mikissimes Design System analyzes for distinctive attributes. The system also takes into account a set of adjectives selected by the consumer about the kind of look he desires (formal, traditional, natural, sporty, elegant, etc.). The system then recommends a distinctive lens size and shape and displays the lenses on the digital image of each consumer's face. But this only begins the exploration. The consumer and optician next collaborate to adjust the shape and size of the lenses (by rotating, enlarging, or even using a mouse to create a new curve) until both of them like the look. In similar fashion, they together select from a number of options for the nose bridge, hinges, and arms until the consumer discovers the pair of eyeglasses he desires—exactly. The final step: the optician presents a photo-quality picture of the customer wearing a pair of eyeglasses that have yet to be produced. (One more thing: the customer receives the actual glasses, mass customized, in as little as an hour.)
Collaborative customizers work with individual customers to change first the representation of the product and then, once the customer figures out his true needs, the product itself. Customer and customizer thus mutually determine the value to be created. The customizer relinquishes some control of the process, allowing the buyer to participate directly in decision making and even some of the setup work. Build-A-Bear Workshop, for example, is basically a retail factory, but one that cements a relationship not only between the company and its consumers but also between the guest and the stuffed animal. As Chief Executive Bear Maxine Clark told us, “When guests pick out exactly the right stuffed animal they want from our thirty-odd assortment, by the time they themselves stuff it to just the right amount, take a heart and then close their eyes to make a wish on it, and then choose clothing and accessories in concert with our associates, they are so connected to their stuffed animal that they become friends for life.” The seemingly necessary trade-offs found in selecting and using most mass produced goods vanish when customers more richly explore their unique needs in this way. Ideally, in addition to getting exactly what they want, customers often uncover aspects of their own wants and needs that they never before knew existed.
Adaptive Customization: The Experimenting Experience
The second kind of customer sacrifice occurs when customers are presented with too many finished goods or too many component parts and must engage in an unwieldy sort-through process. Here, companies should adopt the approach of adaptive customization. In this case, neither the product itself nor the representation of the product is changed for the individual customer; rather, the good or service itself changes as needed, with or without customer input, using customizable functionality embedded into the offering.
If the universe of customer demand spans an enormous set of possibilities, it's imperative to use some form of adaptive customization. For example, Lutron Electronics Co., Inc., of Coopersburg, Pennsylvania, makes lighting controls (switches, dimmers, etc.) that allow for an immense degree of customer-unique variation. With the exception of cookie-cutter buildings, such as franchise restaurants, every customer's environment is unremittingly unique.7 The shape, decor, and window placement of each room vary. Additionally, weather conditions affecting external light change from day to day and hour to hour, as do the composition of people in the room and the way those people use it. So, while Lutron collaborates with customers on some issues (such as matching colors of switch plates), it makes use of adaptive customization by having customers experiment with the lighting system in their own office or home. The company's GRAFIK Eye System, for example, connects various lights in a room and lets users test and then program different effects for, say, lively parties, romantic moments, or quiet evenings of reading. Rather than having to adjust separate light switches for each use, customers spend time up front programming settings until they find the right combinations. They then achieve the desired effects merely by punching in the programmed settings each time they use the room.
Collaboration remains the right approach when each customer must choose from a vast number of elements or components to get the desired functionality or design. When alternative combinations can be built into the product, however, adaptive customization becomes a promising alternative for efficiently making many different options available to each customer. And the process of experimenting with the possibilities becomes an experience unto itself. For example, Select Comfort of Minneapolis, Minnesota, designs and manufactures the Sleep Number Firmness Control System: mattresses that contain air chambers that automatically adjust to the desired firmness level of anyone who lies on them. Using a handheld controller, people can play with various levels of firmness, and couples can even select different levels on each side of the bed. Similarly, Peapod, an online grocery-shopping and delivery service based in Skokie, Illinois, and owned by Royal Ahold of the Netherlands, eliminates the sort-through sacrifice inherent in going to a grocery store filled with aisle after aisle of items. Its PC software and online service enable customers first to create personal shopping lists to store only those items they want to peruse. These lists can be recalled at a moment's notice. For less frequent purchases, customers can search product information through various sorting methods (such as price, brand, or nutritional content).
With adaptive customization, customers independently derive their own value. Adjustable controls, as represented in Lutron's programmable settings, Select Comfort's handheld controller, and Peapod's software, allow customers to experiment time and again with different combinations and permutations. Once they have figured out what is right
for them, they no longer have to sort through all the alternatives each time they want to use the good or access the service. As Joel Spira, chairman of Lutron Electronics and the inventor to first put a microprocessor in a lighting control, says, “Creating adaptive controls differentiates us from the competition, and the way we do it lets customers easily and even enjoyably figure out the settings right for them.” This approach to Mass Customization, fundamentally different from collaborative customization, also creates customer-unique value.8 The adjustable nature of the designed interaction with the product itself promotes the experimentation required to find that value.
Cosmetic Customization: The Gratifying Experience
When customers sacrifice not on the basis of a product's functionality but based on its form—how it is packaged or presented, where or when it is delivered—then companies exploit cosmetic customization. Based on what we call form-of sacrifice, this third approach presents a standard good or service differently to different customers. The product is not customized (as with collaborative) or made customizable (as with adaptive); instead, a standard offering is packaged specially for each customer. By wrapping the good in a customized representation—perhaps through custom printing or packaging, tailored marketing materials, personal placement on delivery, private labeling, or personalization of other stated terms and conditions—each customer obtains the ego-gratifying experience of seeing the item personalized “just for me.”
Hertz does this with its #1 Club Gold program. Each customized element alters only the representation of its rental cars and not the base product itself. Yet it is enjoyed by customers because each instance of customized packaging clearly shows that the company values the customer. Similarly, Zazzle, of Redwood City, California, created a simple but exceedingly effective website for customizing illustrations on T-shirts, mugs, mouse pads, and just about anything else on which anyone would want to place text, a logo, graphics, or any other form of image. Consumers simply select the type of product they want to cosmetically customize, often choosing size, color, and so on, and then upload the text or image they want to place on the item. The site's design tool lets consumers orient the design and otherwise modify it to fit their exact desires. Very quick, very simple, very “me.”
In the business-to-business arena, Whirlpool Corporation successfully wrapped its next-day delivery program, called Quality Express, around its standard Whirlpool, KitchenAid, Maytag, and Roper appliance lines to create customer-unique value. Originally, dealers could order any quantity of appliances they wanted—as long as it was a full truckload. This meant that dealers couldn't always tell consumers when their appliances would arrive, because it depended on what and when others would order. Now the company schedules each distributor for a set number of deliveries per week—five, four, three, two, or one—based on annual volume, and efficiently delivers exactly the right set of appliances each dealer ordered (thanks to a sophisticated logistics system that integrates manufacturing plants, regional warehouses, local distribution centers, and contract trucks via real-time information). Furthermore, because Quality Express can deliver every day, Whirlpool uses the service to accommodate retail customers that have an unusual need outside the normal delivery schedule, with a focus on making each dealer feel special. Quality Express also adds other tailored services to personalize each delivery. At home-builder sites, for instance, uniformed drivers uncrate boxes, re arrange door swings, and install ice makers immediately before mortgage closings. The drivers even call from cell phones en route to make sure the dealers prepare for the delivery.
For many companies, cosmetic customization provides a starting point from which to offer customers a personalized experience. While the basic functionality of their product remains the same, cosmetic customizers signal an acknowledgment of the diverse form-of requirements found among their customers. They postpone many activities in order to perform them before the watching eyes of the customers, who feel that the performance is being staged just for them. As former Whirlpool executive Ralph Hake said about Quality Express, “The value we provide to our distributors is visibly demonstrated whenever they see our truck coming down the road, and in every added service we perform for them, with them, or in front of them.” Whether delivering appliances to distributors, images on T-shirts, or people to rental cars, this approach admittedly appeals to the desire for personal gratification inherent in each one of us. By customizing the representation of a standardized offering, the customizer gives its customers personalized attention.
Transparent Customization: The Discovering Experience
Finally, when customers must repeatedly perform the same task or provide the same information, they encounter repeat-again sacrifice. Such impositions serve only to bother customers and detract from their overall experience. In such cases, transparent customization does the trick, providing individual customers with a tailored offering without letting them know explicitly (through representational changes) that it is customized for them. Customers see the value of the offering only through its standard representation.
ChemStation, a manufacturer and distributor of industrial cleaning goods in Dayton, Ohio, transparently customizes the formulation of individual cleaning products for a wide variety of commercial uses—from car washes and truck depots to restaurant kitchens and paper mills. It doesn't bother sharing the details regarding the particular compounds used to address a customer's cleaning needs. Instead, it tacitly formulates exactly the right combination for each customer and then represents everyone's customized good as being the same “ChemStation Solution.” Every customer even gets the same company logo emblazoned on the side of every storage tank. As a result, customers focus more on how nice and clean their facility is and less on the specific attributes of the supporting product, the exact nature of which remains elusive.
Transparent customizers fulfill the needs of individual customers in an indiscernible way. Instead of requiring customers to take the time to describe their needs, transparent customizers observe behaviors over time to determine predictable preferences and then presciently fulfill those preferences. Of course, a business must have the luxury of time to deepen its knowledge of customers and to move progressively closer to meeting individual preferences. To become a transparent customizer, a business also must have a standard package—like a ChemStation tank—into which it places the product's customized features or components. In this way, transparent customization is the exact opposite of cosmetic customization, which has standard content but a customized package.
Businesses ripe for transparent customization include those whose customers don't want to be bothered with direct collaboration, often because the company asks them to repeat information they've already provided. For example, to avoid annoying customers by asking the same standard questions every time they check in to a Ritz-Carlton hotel (“King size or two doubles? Low floor or high floor?”), the chain established a less intrusive means of learning about individual needs. Its associates observe the preferences that individual guests manifest or state during each stay, whether it be for hypoallergenic pillows, contemporary jazz radio stations, or perhaps even Pepsi over Coke. The company then stores that information in a database and uses it to form a learning relationship with individual guests, thus eliminating unnecessary service intrusions on subsequent visits. The more frequently someone stays in Ritz-Carlton hotels, the more the company learns, and the more customized goods and services it fits into the standard Ritz-Carlton room, thereby increasing the guest's preference for that hotel over others.
Ritz-Carlton, a unit of Marriott, chose transparent customization specifically because its management wants to create a mystique around the fulfilling of guests' individual preferences. How the hotel does it may elude them, but guests discover they've had a particularly pleasant experience whenever they stay at a Ritz-Carlton. Similarly, ChemStation founder George Homan hit on this form of customization because he realized that his potential customers all wanted to run thei
r business and not manage their industrial soap: “We want them to discover the value we provide as they're using the soap, not think about what it is or how it gets there. We don't want our customers to ever think about how our product gets there, only that it always is there.” Every order for soap, as with every request at a hotel, is a routine sacrifice. In any industry, those companies that practice transparent customization eliminate unwanted intrusions, simplifying interactions to let customers discover the offering's essential nature.
Choosing the Right Approach
Which approach should you choose? There's no simple answer to that question. As summarized in table 5-1, not only does each of the four types of customization address a different kind of sacrifice, but also each acts as the basis for a distinct kind of experience. Manufacturers and service providers must discern the uniqueness of their offerings, ascertain the sacrifices their customers currently experience, and then identify which form of customization will yield the best results. Often a combination of approaches is needed to address complex sacrifice issues.
Table 5-1 Customization distinctions
Customization approach
Characteristic
Collaborative
Adaptive
Cosmetic
Transparent
Sacrifice addressed
Either-or
Sort-through
Form-of
Repeat-again
Nature of offering
Customized
Customizable
Packaged
Packable
Nature of value
Mutually determined
Independently derived
The Experience Economy (Updated Edition) Page 15