Mass Customization

Whether you are a small business owner, or a consultant tasked with helping your client find ways to increase revenue, mass customization is a helpful tool to have in your toolbelt. In the modern market, customers have increasingly shown that they want options in what they buy. To satisfy the demand of the market, mass customization can give companies a competitive advantage by satisfying specific customer needs while keeping per-unit costs low. It’s a tool that benefits both the consumer and the business.

What Is Mass Customization?

So, what is mass customization exactly? The mass customization definition is the process of looking creatively at goods and services offered and creating pathways for customization in order to satisfy specific customer needs. It is both a marketing and a production technique that allows for flexibility and personalization for the end user. It is also referred to as made-to-order or built-to-order.

Mass customization is often thought of in conjunction with the fashion industry, but it has widespread implications for companies in any industry. Think of the everyday purchasing choices you make. The color of your new smartphone, or furniture brands that allow changes in fabric or leg styles to meet specific tastes. Once you become aware of mass customization, you begin to see it everywhere.

4 Approaches To Mass Customization

1. Collaborative Customization

Companies that use this method work hand in hand with their customers to meet their specific product needs. This is highly specific and requires great flexibility in your business, one of the challenges of mass customization.

2. Adaptive Customization

Companies use adaptive customization when they want to provide a standardized product that the end user can customize themselves. This can necessitate a higher level of technological capability in the end product in order for the customer to have the freedom to make changes.

3. Cosmetic Customization

Companies provide a more standardized product, but give it to different groups in a different presentation. In these cases, customization usually takes place at or near the end of production. It is typically a matter of packaging, marketing, or adding benefits to a product.

4. Transparent Customization

These companies provide a unique product or service to their customers without overtly stating that they are customized. They typically do this by gathering information about their customers’ preferences by simply observing their choices over time.

Mass Customization Examples

Let’s look at some mass customization examples through the lens of the 4 types of mass customization to give you a greater handle on how they can be developed and applied:

Collaborative Customization:

• • Independent Financial Advisors

Customers personalize the services they take advantage of and how they structure their portfolios.

• • Paris Miki

Japanese eyewear retailer that walks clients through a highly customized process to eliminate the need to try on hundreds of frames.

Adaptive Customization:

• • Alexa from Amazon

Alexa is easily programmed by the end user with specific commands.

• • Lutron Electronics Company

A lighting system where clients can set their own mood and function preferences through a wide variety of available switches.

Cosmetic Customization:

• • Modular home builders

The bones of the product are the same, but they offer customers the ability to make it feel like “their own” by changing certain aspects.

• • Planters Peanuts

The basics of the product they offer never changes much, they have continued to develop packaging, sizing, flavor and combination options to target more markets.

Transparent Customization:

• • Pandora

They are masters at taking your preferences and selections and changing what they offer you based on the information you provide.

• • Ritz Carlton

Instead of asking customers for feedback, they simply observe their choices, make notes on each customer, and provide the same options at their next visit.

What Is The Goal For Mass Customization?

You may think mass customization is simply about giving your customer what they want, when they want it. Taken at face value, that definition could present challenges and send you scurrying to meet your clients every whim. This would clearly not be profitable in the long run. This makes us ask: what is the goal for mass customization?

The goal of mass customization is for companies to engage more directly with their customers, either through direct contact or observation. This allows them to anticipate needs, create fresh solutions, and meet specific demands. This builds a more mutually beneficial relationship for both the client and the company.

In order to avoid the trap of trying to meet every customer’s highly specific need, businesses should view mass customization as a process of aligning with their customers' needs. This is done by developing 3 key capabilities:

1. Solution Space Development

Identifying the areas where customers' needs differentiate in order to develop solutions.

2. Robust Process Design

The ability to define and design processes where customization takes place through reusing or re-combining resources in order to offer the customized product.

3. Choice Navigation

Helping the customer navigate customization options through communication or technology so they don’t become overwhelmed by their options.

There are several additional benefits to mass customization that should be mentioned. It gives companies an edge over the competition in both marketing strategy and the end product. Offering similar products that are customized towards the end of the production process also minimizes inventory and increases efficiency.

Challenges Of Mass Customization

Although mass customization is a viable option for many companies, any organization interested in implementing this strategy will need to be aware of some of the challenges of mass customization that can arise.

• One Size Fits All

Although mass customization will work in many markets and types of organizations, it isn’t a one size fits all solution. There are many industries where it just won’t fit. No one is interested in a custom light bulb, for instance.

• Higher Costs

Although mass customization can save the manufacturer money, it often creates a higher price point for the customer. This can reduce the size of the market for the product.

• What if I don’t like it?

One of the challenges of mass customization is when the product gets returned. Because it was developed specifically to fit the likes and dislikes of the customer, returns tend to be less likely, but they still happen. For this reason, many companies don’t have a return policy.

Take Away

Mass customization is a fantastic strategy for many organizations, but it’s not for everyone. We advise firms to take a step back and look at the product or service they offer, then find points in the manufacturing processes where clients’ needs tend to differ. These points show you where you may have an opportunity to offer mass customization with profit-bearing potential. If your organization needs business strategy help, write us. We have a team of ex-MBB consultants with high-level experience that can help take your business to the next level.

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