When is Customization Appropriate? Or Not?

I recently wrote about four different kinds of customer experience that could be thought of as the natural results of whether your business is capable of (1) interacting efficiently with customers, and (2) customizing different treatments for different customers.

Bottom line, the degree to which you have the ability to interact with customers and customize your treatment for them will determine whether you are capable of delivering only a mass customer experience (everyone gets the same thing), or a niche experience, or a targeted experience, or a one-to-one customer experience.

The comments to my original post reflect everyone’s general belief that the most superior of all these four types of customer experiences must be the one-to-one experience, in which an individual customer is able to specify exactly what he wants or how he wants it (through efficient interactive contact), and the business can then render this individualized treatment for the customer.

But not all businesses are created equal here. There are some types of businesses whose customers would benefit from individualized treatment, and other businesses for which customized treatment might not be so useful.

Consider the difference between a bookstore and a gas station, for instance.

Suppose you walk into a bookstore and the proprietor remembers your name and says “Hey, welcome back, Don! I know you like Carl Hiaasen, and we just got his newest book in…” You’d probably find yourself being more and more loyal to that bookstore, because they are on the lookout for the kinds of products you like.

But now think about if you drove into a gas station and the proprietor said something similar: “Hey, welcome back, Don! And guess what? We have a new shipment of 89-octane in, just the way I know you like it!”

Not so compelling, right?

The point is, when you sell to customers whose needs are all different or highly personal (like a bookstore, camera and electronics retailer, grocer, clothing store, etc.), then each customer is likely to benefit from the fact that you remember his or her particular needs or preferences.

But when you sell to customers whose needs aren’t all that different from the needs of other customers (like a gas station, or maybe an airline, or a car wash), then customers don’t benefit as much. This doesn't mean it isn't useful to remember names and faces, and to display civility and friendliness (every business should try to do that), but when everyone has the same needs from whatever product or service you're selling, then remembering any individual customer's preferences won't create that much of a benefit.

On one level, this means that before you launch willy-nilly into a “one to one” type of service offering for individual customers, you need to consider just how compelling a benefit this kind of service would represent for them.

But on a second level, it also means that the more you can take apart the actual product-service offering and consider all its various components – including packaging, configuration, ancillary services, additional products, pre-authorizations, and payment terms – the more likely it is that you’ll be able to find those particular product or service attributes that your customers do prefer to be tailored to their individual (and different) needs.