8 steps for successful product customisation.
Customisation and the creation of personalised offers has gained a lot of attention over the last few years and there has been much focus on the empowerment of consumers in a digital era. A recent study by Bain & Company showed that consumers would pay 20% more for customised products. However, this is not the only benefit from the higher involvement of the consumer. It also increases product identification and can have a positive effect on loyalty by creating a stronger relationship with the product and the brand.
But before you embark on a product customisation programme we suggest you consider these 8 critical factors.
Offering a greater range of options is always a question of costs and profitability. Therefore, organisations need to consider carefully what the actual value is they are creating, rather than blindly following a market trend. Not only assessing the costs for production but also considering the ways in which consumers will benefit from the customisation and understanding their needs to know if the offer will be valued and bought.
Understand your production capabilities
Organisations must carefully assess their capabilities and the feasibility of the customisation option they want to offer. One of our clients, a luxury automotive manufacturer wanted to increase sales by offering customisation for one of their top models. One of the changes made was offering 22’’ wheels as an additional option. However, their manufacturing plants only had capabilities up to 18’’ wheels, the bigger wheels would have to be fitted post-sale, impacting upon profitability and customer experience.
Identify the most suitable product in your portfolio
Not every product is suitable for customisation. Businesses need to think about what in their portfolio gives them the greatest flexibility for alteration, also taking into account how they can attract a broad range of their consumers, without the risk of losing customers. For example, Cadbury invariably launches product innovations with their core line of Dairy Milk to have greater flexibility and limit risks.
Engage customers in the process
Give your customers a feeling of ownership. A recent study found consumers are willing to pay more for a product when they were involved in the assembling. This ‘IKEA-effect’, which gives a higher level of value and appreciation of the final product as a result of being involved in the product’s creation.
Avoid too many options
A potential risk for customisation can be a too varied offer. The famous jam-study by Iyengar and Lepper shows that more consumers made a purchase when having a choice between 6 different flavours of jam, compared to an offer of 24. This highlights the potential risks of product variation. Especially when there is lack of familiarity with the product, complexity and choice overload can lead to a loss of interest and ultimately the termination of a purchase.
Make it a great and sharable experience
Key to successful customisation is understanding the customer journey and making it an enjoyable process. Businesses must understand what the appeal is for their consumer when deciding which approach to take. For example, when purchasing customised trainers from Converse, at each step a different feature is chosen such as model, colour and size, which makes it easy to navigate and to overview the process. And of course with the growth of social media you can let your customers share the whole experience with their friends and followers.
Leverage new technology
New technologies should be harnessed to increase the levels of customisation. The most famous example in recent years being Coca Cola’s use of digital printing for their ‘share a coke’ campaign, swapping the company’s logo with common first names. Going a step further in the process of personalisation through digital print is Heinz with its ‘Get Well Soup’, which gives Facebook fans the possibility to send a personalised can of soup to their family and friends.
Make it mobile
Figures are expected to show that in 2014 online retail sales made via mobiles to grew in the UK by 62% to a total of £7.92 bn. Tweets made with a ‘Share a Coke hashtag’ in 2014 exceeded 235,000 . It is now a business necessity to ensure you create an experience that is enjoyable across the all the different channels of purchase.
by Philip Cooper and Marietta Benkhoff.
To understand more about ‘Make it mobile’ see our presentation on successful App Development.