The SIM Framework

Mass Customisation

Mass Customisation is the final stage that seeks to build 1-to-1 relationships so as to fulfil unique needs and wants at an exceptionally competitive price. It is used by organisations that wish to differentiate their clients to the ultimate level through a process of 1 to 1 Marketing combined with mass customised technology and techniques.

Customised products have traditionally been made to order by craftsmen and have therefore been costly and delivery times have been long. Now organisations can offer both custom products / services and low costs, that previously were only associated with mass produced commodity items. Examples included Gateway Europe and Dell where you can build your own PC, and Acumin Corp. where you can design and purchase customised vitamin pills.

But Mass Customisation is more than products and technology. Its is very much one of processes. Customer processes that first creates a high degree of trust and then requests customer's permission and support to hold their detailed, perhaps intimate, personal profiles. Product development processes that develop and market components. Acquisition processes that allow customers to interact and design their own products and services. And organisational processes that respond to their unique personal needs, both now and throughout their lives.

Using the profiles, customers are offered selected products that they can then further tailor to their personal needs. As they are working at a product component level, they are in effect participating in product design. This requires interaction with the system and the use of powerful support aids so that the customer can visualise and test the product.

This appears to require greater customer capability and knowledge as well as motivation, but with appropriate human computer interfaces the complexity and knowledge requirements can be hidden. Motivation comes through having a custom product at a mass produced price! Alternatively, the customer can work together in tandem with an Sales Assistant (IFA in Financial Services), either in the client's home or remotely. Either way, tools like expert systems, computer based training, and simulation systems, make the process easier.

In many instances, customers will undertake customisation over a period of time and during the process they will make reference to company and other information sources. Customers should be allowed to switch between different interactive mediums and these should be integrated so that he or she does not have to repeat information. This is further discussed under Communications.

The various methods to mass customise products and services are explained below. Because each product or service is unique, then a product profile needs to be kept but this provide further opportunity to adapt the product or service, or to clone further offerings. Once the customer has experienced a quality custom product, he or she is likely to return for repeated visits, knowing that the learning curve is now less steep. Often it is just a simple case of updating personal profiles and then re-ordering.

Further more, marketeers will have access to a wealth of detailed consumer data that can be used to attract other customers, perhaps at the Mass Personalisation level.

Definition: A two-way intensive relationship for purchasing a product or service to a particular unique specification. Customers typically define the offering from "the ground up" (i.e. they customise the offering). The company then assembles the product and delivers it according to the customer's delivery specification. With some products there is an ongoing adaptation of the unique product or service.

Business Value:

• Provide exceptional value for money products that meet unique personal needs.
• Attain high customer retention rates.
• Increase customer's life time values.
• Obtain detailed consumer information.
• Increase profitability.

This Mass Customisation stage requires a long term investment in technological support, organisational capabilities, and marketing thinking and culture. Whilst many technology components already exist, integration with the interactive mediums will take time.

Information examples are:

• Benefits and process of Mass Customisation.
• Suggested starter products and services (these could be promoted by custom e-mail).
• List of sub-assembly components with their descriptions and cost.
• Rules for combining the components.
• Suggested tailoring and options.
• Choices of assembly options (from DIY to on-site custom build and fitting).
• Choices of delivery options and payment methods.
• Options for ongoing adaptation and eventual conversion or disposal.

Tools & Techniques could include:

• Advisor tool to recommend a starter product.
• Simulator to assess the performance of the offering under various situations.
• Tools to capture and compare various designs.
• Monitoring tools to continuously check the suitability of the purchased product.
• Reminder services to encourage further adaption, replacement, disposal, or further purchases.

Technology: As per Mass Personalisation plus:

• CBT to assist the client in his/her decision making.
• Expert system to drive the dialogue and to suggest options.
• CAD and simulation to design, test and price the virtual product.
• Monitoring systems to identify customer's met and unmet designs.
• Rule based systems to ensure viable and legal products and correct processing.
• Component Based Technology and Development for flexible design, production, and administration.
• Tight integration between marketing, sales, production and administrative systems.
• Integration between the different interactive mediums.
• Organisational and technological architectures to integrate and co-ordinate these diverse developments.

Example Financial Services Sites:

• Chubb & Son Inc. (Customise insurance products - Masterpiece / Renaissance)
• USAA Insurer Customises service based on comprehensive DB of life events and interactions

Methods of Mass Customisation

Pine defines 5 fundamental methods of Mass Customisation (which are not mutually exclusive):
 

• Customise services around standard products and services.
• Create customisable products and services.
• Provide point-of-delivery customisation.
• Provide quick response throughout the value chain.
• Modularise components to customise end products and services.
    Pine suggests 6 ways of componentising.

For more information on these methods of Mass Customisation, follow this link.

Next is Acquisition Cycle

JS

External Resources
 

1. Godin, Selth, Permission Marketing, Simon & Schuster
   • You can download (96K in RTF format - can be read by MS Word) and read the first 4 chapters of this book.
2. Pine, B. Joseph II, Mass Customization, Harvard Business School Press, Boston, Mass., 1993.
3. For more examples of companies undertaking Mass Customisation see the Database of example companies.
4. See the full list of resources for this web site for other related resources.

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