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Test Yourself...
Can you think of any other investment that you can make in your business that will give you benefits like these?
Let your customers design and purchase their own tailored product or service
It doesn't matter whether you are selling products or services. It doesn't matter if you are selling to consumers or to other businesses. The chances are that your customers would be delighted if you could tailor your product/service to everyones individual needs. Mass customisation technology allows you to do this in a cost-effective way.
Here are some ideas of how some companies might use mass customisation:
- A clothing company might sell custom designed, or personalised clothing
- A jeweller might want to make customised wedding or engagement rings.
- A furniture manufacturer might make custom built furniture that match the colours of peoples living rooms.
- An insurance company might want to offer tailor made insurance policies that can be unique for each customer.
- A computer hardware retailer might make PC's that are custom built to their customers specifications.
The possibilities are endless. The key of mass customisation is to be able to offer these services inexpensively and
in large quantities.
Increase profit margins and the value of your product
If you are selling something which is truly unique, then it follows that you become the sole supplier. This monopoly will enable you to increase the cost of your product (and hence profits). Your customers will not mind this because they will be buying something that has a unique value to them, which they cannot obtain elsewhere.
Gain a competitive edge and increase your market share
The reason why your customers buy from you instead of your competitors is because you are doing something that they perceive as
unique. Mass customisation enables you to take this concept to the extreme by being able to offer something unique for every
individual customer.
This makes it very difficult for your competition if they are still selling "one size fits nobody" solutions.
If customers find that they can buy something individual and unique from you for a good price then your offering becomes more attractive and you will be able to gain market share
Reduce your cost of sale
It is a well known principle that every time you gain a new customer or a new order it will cost you something. The cost can be a direct financial penalty, or an indirect penalty in terms of time. It is a simple fact that if you can lower your cost of sale, then you can increase your profits.
Many business owners find they have to spend a lot of time and money explaining the benefits of their offer. If you are already selling a customised product, then this problem is even bigger as you must also explain all of the options you provide.
Mass customisation enables you to reduce the cost of sale by allowing the customer to configure their own product or service and by automatically providing the customer with the information they need. This doesn't require human intervention so it costs less.
As the customer can place their own order without a salesperson, you may also find you can gain extra savings in your sales process.
Increase the lifetime value of your customers
When you become the sole supplier of something, you are the only person that customers can turn to for upgrades. What's more, because you have sold them something personal you can gain repeat sales on it.
For example, imagine that you sell customised shoes. Every few months, you could out a sales letter to your customers asking whether they would like to buy some more shoelaces for their product. Your offer might be attractive to them, because you are offering the exact kinds that will go with the shoes they bought.
Bypass costly distribution channels
Many firms are forced to make sales through middle-men such as wholesalers or distribution companies. This inevitably lowers profit margins. When using the Internet, you can bypass all of these extra levels and sell directly to the end-user. This can save you money or it could give you a financial edge over your competitors.
Save a fortune on market research
If there is one thing that is certain not to change, it is the fact that everything changes. There are very few businesses that can afford to ignore what is going on in their market place. The good news is that if you are using a mass customisation system, then you can be the first to spot a new trend in your market. This is because your customers all buy something unique; it is possible to see what kind of things are becoming more popular. Without mass-customisation you might see that some products are selling better than others. With mass-customisation, you can see what characteristics of a product are becoming more popular. Not only can you respond faster, but you don't have to spend on market research.
Sell your products or services on the Internet, 24 hours a day, 7 days a week
It would cost a lot of money to keep a sales force working 100% of the time. However computers don't take breaks and they don't charge by the hour. The Internet makes it possible for you to be taking orders even when you and your staff are asleep. People around the world live in different timezones and they can still buy from you, even though you might be 12 hours apart!
Open a new sales channel for your business
If you can already take orders by phone, fax or post, then using the Internet will expose you to even more business. For many people, shopping on the Internet has become a way of life and they find it much easier and convenient than traditional sales channels. Anything that makes it easier for people to buy from you will ultimately benefit your business.
Offer greater variety and convenience to your customers
Everyone wants to make their customers happy. It is almost dreamlike to consider the possibility of being able to offer every customer exactly what they want. However mass customisation technology makes this dream a reality. By splitting your product or service into smaller interchangeable "chunks" you can increase what would normally be a few products into millions of different alternatives.
This is particularly important in cases where you have to carry stock - imagine how much it would cost to stock 10 million different lines without mass customisation!
Sell to new kinds of customers
Mass customisation opens up new markets for you. Not only does it allow you to sell new types of product/service, but it if you use the Internet then you can reach people all around the world. This means that you can find new niches that were previously unattainable to you.
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