We all want our products and services to stand out from the pack. We know we have to customize and personalize, but how? What do we do when compliance won’t let us change so much as a comma? Where should we even start? In The Experience Economy, James H. Gilmore, and B. Joseph Pine II address many of these questions. For a 25-year-old book about consumer preferences, it is still impressively relevant. As we think about retaining differentiation, especially as we scale, they provide four types of customization to utilize.
Before we look at each type, it’s worth mentioning why customization “works.” Average (and below average) products, goods, and services leave customers with what they call a “sacrifice gap.” Think of the old sales expression, “good, fast, cheap – you can only pick 2!” Whenever a customer feels that they’ve made a sacrifice to use our offerings, there’s a gap. When a better-differentiated service eventually comes along, this sacrifice gap becomes the competition’s opportunity.
In the same way a seed can find its way into a sidewalk crack and grow into a flower, competition can easily find entry points into undifferentiated businesses. Customization helps us seal off those cracks by closing the sacrifice gap in the customer’s mind, and not just on some theoretical spec sheet. Proper customization helps us form better impressions, curate better experiences, and create lasting memories.
The four types of customization are:
Collaborative: where the provider and the customer collaborate on a solution together. Think socially interactive, ex. Build-a-Bear. Question: At what part of our process do the most engaging conversations happen? How can we put a spotlight on those more?
Adaptive: where the customer dials in settings based on available options. Think customer variations in how they use a product, ex. Sleep Number mattresses. Question: What options do we present that recognize one size does not fit all? How does the client respond to that control?
Cosmetic: where the customer can alter the form but not the functionality. Think of choosing an exterior feature, ex. the color of a car. Question: what physical representation does the client carry off into the world? Does it signal the value they feel like they are getting? Can it be made to do so more?
Transparent: where the customer receives an experience they may not realize or recognize as having been customized for them. The customization process is invisible. Think of social media feed algorithms working behind the scenes to present to your preferences. Question: What do we do to anticipate and meet a client’s or prospect’s needs? What makes them say “it’s like they just knew.”
Customization is simultaneously offense and defense. We can use it to attack average and we can use it to protect against specialized attackers. When we reduce customer sacrifice we let the client’s own impression help justify the value they receive. When our goods and services are experiential, they create impressions, and those impressions can be used to create memories. The best way to get people talking about what we do is to do something worth talking about.
Consider each of the four and where they apply from the perspectives of offense and defense. Feel free to mix and match too. We have a creative opportunity to do excellent work everywhere from design to delivery. By focusing on the differentiators we depart from average and create truly special products and services.
For a longer than this but shorter than the book version of the concept, see “The Four Faces of Mass Customization” from HBR (Jan-Feb 1997). For a deep dive read “The Experience Economy” and compliment with Tyler Cowen’s “Average is Over.”
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