This article was first published on 14 January 2014 in the BT Let's Talk GTM Blog.
Remember the nineties, when dot.com hadn’t quite dot.gone? And business gurus were full of inventive ideas about how to capture, retain and grow customers?
One of those ideas was mass customisation. Coined by Joseph Pine in Mass Customisation: The New Frontier in Business Competition (Harvard Business School Press, 1993), the notion looked at managers tailoring their products to meet their customer’s unique needs. Or as some put it – to give customers what they wanted, where they wanted and when they wanted it.
Mass customisation was the opposite of mass production, which depended on scale and efficiency for its success. Whether manufacturing furniture, white-label kitchen appliances or mobile phones, mass production was and is about customers getting what the company produces, as opposed to getting exactly what they want.
For those of us who remember when a craftsman produced a unique piece for a single customer, mass customisation struck a chord. Okay, it wasn’t quite the return of cottage industries, but it had the potential to turn around the tidal wave of mass-produced rubbish filling our homes.
Mass customisation meant a more sustainable future because it offered customers precisely what they wanted. In effect, they would likely pay a premium but keep whatever they bought for longer, even for a lifetime.
But there was a glitch in this wonderful concept that was going to change the world: technology. Ideas often outstrip the technology to implement them.
Remember the Apple Newton personal digital assistant, launched in 1983 to revolutionise personal computing? Great idea. Unfortunately, the technology wasn’t ready until 2007, when Apple launched the iPhone.
So people got really excited about mass customisation. Then things went quiet for the next twenty years because the technology to turn the idea into reality didn’t exist.
Until, guess what? The folks who brought us mass customisation in 1993 returned, this time with the technology. Look no further than 3D printing as proof of mass customisation.
Instead of ink, the 3D printer uses plastic, brass, ceramic and steel to manufacture an uploaded image. Walk into Shapeways, a 3D-printing marketplace in New York, and manufacture what you’ve designed using one of their printers.
Why buy a home-dining set from a big-box retailer, who manufactured it in a low-cost labour market and shipped it half-way across the world? Instead you can design and manufacture a dining set using a 3D printer at a location close to home.
This is clearly disruptive technology. We can see power shift from the corporation to the individual.
So what does that shift to the individual mean for organisations? For a start, we must understand that we need to involve our customers in producing – not just consuming – our products or services. So we can give them what they really want.
Nokia’s reluctance to manufacture the flip-phone that its Asian customers wanted is a case in point. The inflexibility of its product teams, who considered it a design heresy, cost the company its premier market position.
Asda, the UK supermarket chain, involves its loyal customers in strategic decisions like which products to offer and how to arrange them in stores. Some of its customers get early access to products and give their opinions. Good customers earn the right to be part of the company’s decision-making process. Asda recognises the power of the individual and the importance of mass customising to meet their needs.
Proctor & Gamble also saw the importance of involving customers in the product development process and began redefining its route to market. It expects 50 percent of its future products to come from third parties, outside the company. That is, from its customers and suppliers.
BT has similar aims for the Concept2Market process that it runs across the business. In 2006, it started to think about how it could improve customer experience.
One element involved was the approach to product and service development. At the time managers within the company were the chief architects of product development. But it wanted 50 percent of all product-development ideas to come from outside the company, mainly from customers. It has made significant progress toward achieving this goal.
Ultimately we need to adapt our business to work with, not against, the power of the individual.