Mass customization is the sweet spot between customized goods and mass production. It’s the idea that the product a consumer receives may not be one of a kind, but it will have some unique features. NikeiD is one of the forefathers of mass customization, allowing loyal customers to choose the color of their canvas, laces, and Swoosh.
While the benefits to the consumer are apparent — receiving a product that better meets their preferences — many companies wonder how mass customization will benefit their bottom line.
Here are 5 benefits of mass customization that can make your company more competitive.
Mass customization allows companies to charge a premium for their product. While the costs of incorporating customized elements into a product will be slightly higher, that nominal increase is covered with a savvy pricing strategy. In this sense, mass customization is the perfect upsell.
Adding customized elements doesn’t have to be a costly endeavor, or disruptive to production lines. Apple found the perfect mass customization option with iPods and iPhones by offering after-market product engraving for personalization. The product was already completely assembled and ready to be shipped or engraved, depending on the customer preference. Small producers can offer the same type of mass customization with a Ponoko’s offering.
This strategy also helps move customers through the sales funnel. Those who were debating purchasing your product in the decision-making phase of the sales funnel may be tipped over into transacting when they see this benefit.
Improved Customer Satisfaction
Offering customization options improves customer satisfaction when they purchase a product or interact with a company. Studies show that personalization leading to a positive customer experience improves customer satisfaction by up to 20%. This improvement correlates with a 10-15% boost in conversion rates.
If the customer feels as though they’ve received something valuable for their money, or something that suits their sense of individuality, they’ll have a better relationship with your business. The higher the satisfaction, the more likely they are to engage in word-of-mouth marketing or user-generated content — both of which are incredibly valuable.
Reduced Customer Churn
Another side effect of better customer satisfaction is reduced customer churn. In other words, your company will retain more customers due to the perceived value derived from mass customization.
Your customer will also enjoy the experience of having items customized to their tastes over more generic products. As such, they’ll keep coming back to you for more rather than looking to the competition.
One of the primary concerns for companies looking to incorporate mass customization is the impact on the production line. While production will be affected, it’s typically not as disruptive as one might think. In many cases, the production process isn’t affected until near completion or the customized components are created and ready for assembly. This element is where mass customization and pure customization vary the most.
Still, mass customization does impact production times and supply chain management. Businesses must take a strategic approach to minimize disruptions and ensure consistent streamlined production. Don’t hesitate to consult an expert in this area when exploring this opportunity.
Improved Inventory Management
One of the biggest impacts on the bottom line will be decreased inventory management costs for companies. These savings tend to dramatically outpace any increased production costs with mass customization. By using a just-in-time fulfillment strategy, your business can minimize overhead costs by reducing inventory storage and management.
Again, this becomes an issue of change management as it will alter the supply chain. Working with a specialist or consultant to reorganize and execute these changes can help mitigate frustrations and ensure a smooth transition into mass customization.
The Main Types of Mass Customization
Now that you understand the benefits of mass customization, you can determine what approach works for your product and organization. There are 4 main types of mass customization:
- Collaborative customization: In this process, the business and client interact closely to create a custom offering. Software as a service (SaaS) platforms with customized features are a prime example.
- Adaptive customization: There are various preset customization options available, and the consumer can choose which ones they want. A sundae bar is a perfect analogy for adaptive customization.
- Cosmetic customization: This is a high-level form of customization that changes the face of the product to offer more solutions. For example, selling soda in various predetermined sizes of cans and bottles so the consumer can choose the best fit for them.
- Transparent customization: This form of customization uses consumer data to create personalized options. When you see product suggestions based on your online shopping cart, this is transparent customization.
Choose any combination of these strategies to create your own mass customized approach to offering better products and reaping the rewards.
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