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Pizza Hut recently added 10 new crust flavors, specialty recipes, new toppings, new drizzles and new sauces to its menu to offer customers a pizza that can be customized 2 billion different ways, built exactly to their liking. When it comes to selling a consumer on a product or service, brand appeal and emotion play the starring roles. One way for brands to add value to the customer experience is through offering customization, which facilitates the consumer’s transition from passively interacting with a brand to being an active participant in the final product or service that he or she receives.
Last summer, Coca-Cola ran the “Share a Coke” campaign during which the company offered a “personalized” customer experience by replacing its can’s logo with 250 of the most popular millennial names. Despite production complexities due to lack of scale, the campaign was extremely successful and even reversed 11 years of decreasing sales for Coca-Cola in the U.S.
Now, more than ever, consumers want and expect a customized experience with a brand. In fact, 25 to 30% of online shoppers are looking for customization options when buying a new product or service, according to a 2013 survey from Bain & Co. It’s fair to predict that the trend will only continue, considering the types of toys that are popular in today’s market. Build-a-Bear allows a child to customize his own stuffed animal and watch it come to life before his eyes. At a higher price point, American Girl’s “Just Like You” doll enables a child to customize everything from her “best friend’s” skin tone to its eye color and hair style. When these expectations for customization are learned at a young age, consumers’ desires for expressing their unique personalities and having something tailor-made to their needs becomes a permanent part of their buying patterns.
B-to-C companies aren’t the only ones hip to providing a personalized customer experience. B-to-B companies have been offering mass customization for years, and the Internet has greatly increased the possibilities. Dell took hold of the PC market by offering customized computers to the exact specifications of each customer, which essentially allowed users to assemble their own machines online before having them shipped to their front doors.
The UPS Store is another example of a B-to-B business that has initiated a personalized customer experience. According to research from UPS, after learning that “90% of small business owners would prefer to do business with other local business owners,” UPS took action to target the small-business niche and launched a Small Business Solutions portal that allows the brand to connect with small businesses and provide personalized services, products and offers.
While customization is becoming the status quo, there are challenges associated with successfully providing a personalized customer experience. For one, companies must define specific limits in which customers can personalize their experiences. Failure to do so can lead to unnecessary costs and complexity. Second, brands must learn to be flexible and proactive as they shift from a system of mass production to a system of mass personalization. Without being able to foresee what consumers or customers will want next, systems based on tightly integrated processes without room for change will no longer be effective.
While customization can add cost and complexity to a company’s supply chain, it also can result in higher business profits due to a price premium for the customized products, more loyal and satisfied customers, greater word of mouth, enhanced customer feelings of creativity and freedom of self expression, and precise product or service taste matching.
There is a tremendous amount of customer segmentation in today’s market, and being able to offer niche products is a great advantage. Personalized customer experiences are the present and future of sustained business growth, and all B-to-B and B-to-C companies will need to look for these opportunities in order to keep up.
Mitch Duckler is the managing partner of FullSurge, a strategic consulting firm based in Evanston, Ill.