Customization doesn’t bring efficiencies

September 17, 2012

Note: This posting is based on my weekly “Thank God It’s Monday” which is offered to help companies thrive!

This week’s focus: configurable products and services

Being a “customizer” doesn’t create efficiencies. More often than not, customization brings tremendous inefficiencies in sales, order administration, engineering, manufacturing operations, service, etc.

  • Your team is forever chasing experts to answer and resolve normal, routine configurability questions that arise.
  • You require significant human intervention to accommodate complexity and variety simply because information isn’t available–the business isn’t set up properly.
  • Your team is challenged to pull together quotes for products and services that can actually be delivered.
  • Your team is challenged by the fact that nothing is standard; everything is a special.

Companies must evolve their business processes to cost-effectively meet the challenges product and service complexity bring. If customizers don’t take action to improve efficiencies, they will continue to suffer margin and operational challenges that only mount.

Failure to address these challenges will keep you and your company from thriving.

Thought for the week:

“Don’t confuse enthusiasm with commitment.” – Paul J. Silvia

What do you think? I welcome your blog comments!

___

Dave Gardner, Gardner & Associates Consulting

http://www.gardnerandassoc.com

© 2012 Gardner & Associates Consulting  All Rights Reserved

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How to excite a la carte customers

July 13, 2010

Customers expect companies to offer more than a “one-size-fits-all” product or service. The à la carte customerTM wants to be in control of what they buy. A prospective customer wants to know what is available, at what price and, if we’re talking about a manufactured product, how long it will take to produce.

Traditionally, companies with configurable products and services build and maintain elaborate, electronic menus—often referred to as “configurators”—that describe the array of options available. Many companies offer so many choices that prospective customers are overwhelmed leaving them to wonder, “Where do I start? How do I begin to understand what product or service is appropriate for me?” For example, Dell’s website, dell.com, offers a vast array of choices yet does not go far enough in helping a prospective customer converge on the best solution based on their individualized needs.

Most companies discuss their products and services using industry-centric language which may align poorly with the language and expertise of the prospective customer. If a prospective customer doesn’t understand a company’s lingo, there’s going to be problems. Here’s an example.

Imagine you have just arrived in Malaysia and you are taken to a local, traditional buffet. You know nothing about the food you see. Some things look like insects, some things look raw—you are going to have many questions. There will be language differences that make it difficult to communicate with your local host. There will be a lot of “yeses” and head nodding but you wonder, “Did she really understand that I can’t tolerate anything spicy? When she tells me it’s not spicy, can I trust she understands my definition of ‘spicy?’” It is no different speaking to a prospective customer who does not possess expertise about your products and services.

If a company does a poor job of helping prospective customers make appropriate choices through its selling tools, it forces the prospective customer to speak with someone to help them figure out what to buy or, worse, turns the prospective customer toward competitors who more effectively help an individual decide what they need to buy.

Sometimes, a prospective customer will connect with a knowledgeable sales agent and, at other times, the customer will speak to a sales agent who knows little more about the company’s offerings than the prospective customer. The prospective customer has no means to determine the skill and expertise of the sales agent taking their call. If the product or service doesn’t meet the customer’s expectations, the customer may never buy from that company again. The unhappy customer is likely to share their negative experience with others.

Most configurators fail to offer what prospective customers really need. What are the best practices that companies of configurable products and services must employ in next-generation configurators?

  • The configurator needs to be assistive to the prospective customer and the sales agent. Prospective customers require more than a “product selector” or “service selector” as traditional configurator solutions are presently constituted. Prospective customers need much more than an elaborate menu presented with little guidance about how to order or configure a product or service tailored to their individualized needs. Consider the trusted advisor role a waiter satisfies in a high-end restaurant—the waiter provides guidance and expertise to help the customer order a wonderful meal from a myriad of possibilities.
  • Configurable product and service providers must offer guided selling solutions that teach a prospective customer how to buy based on the essential mission or application required of the product or service. To do this requires matching customer-required attributes with attributes inherent in certain products and features.
  • Prospective customers need to know they are selecting the appropriate product or service based on attributes they have previously been prompted to provide. It is far better to fit the solution to the customer’s actual needs than let them buy something based purely on price that will disappoint them later.
  • Configurable product and service providers need to provide different entry paths to help a prospective customer converge on a solution—the tools must help the novice or infrequent purchaser as well as the expert.
  • Prospective customers need to have the opportunity to learn about products and services they never dreamt existed, creating excitement and engagement.

Has any company created what I call the “next-generation configurator?” Not that I am aware of. Most companies that have implemented configurators have done what I call Version 1.0 but need to be thinking about Version 2.0.  Version 2.0 offers companies an opportunity to distance themselves from the competition.

These best practices for offering and presenting configurable products and services via next-generation configurators will turn customers into committed, raving fans. That’s exciting!

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

© 2010 Dave Gardner


Dave Gardner’s “Thank God It’s Monday” 01MAR10

March 2, 2010

This week’s focus: customer choice

Back in 1961, Hertz ran a very powerful and memorable ad campaign built around a compelling theme: “Let Hertz put you in the driver’s seat.”

Not only did this ad campaign create the image of a customer ending up in one of Hertz’s rental cars, it suggested that Hertz puts the customer in control of each transaction and the relationship. What could be better than a customer driving the relationship? This simple ad set the stage for Hertz being the world’s largest car rental company.

How is your company putting customers in the driver’s seat enabling your company to thrive?

Thought for the week:

“It’s not your customer’s job to remember you. It is your obligation and responsibility to make sure they don’t have the chance to forget you.” Patricia Fripp

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com


Dave Gardner’s “Thank God It’s Monday” 22FEB10

March 1, 2010

This week’s focus: customer choice

Mike Dreyer, CIO of VISA Inc., has been quoted as saying he doesn’t want technology to be a limiting factor in implementing any good idea. A wonderfully refreshing thought!

Too often, people reject ideas that would better serve customers with weak rationales: “that won’t work here,” “that’s not how we do it here,” “it’s too hard to do that,” “we’ve never done that before,” and my personal favorite, “the system can’t handle it.”

Is your company artificially constraining customer choice?  Or, are you, like Mike Dreyer, taking the lead to make sure that good ideas find their way to the top so you can delight your customers and help your company thrive?

Thought for the week:

“What leaders see on the surface can be discouraging–people, even very able people, caught in the routines of life, thinking short-term, plowing narrow self-beneficial furrows through life.  What leaders have to remember is that somewhere under that somnolent surface is the creature that builds civilizations, the dreamer of dreams, the risk taker. And, remembering that, the leader must reach down to the springs that never dry up, the ever-fresh springs of the human spirit. John Gardner, On Leadership, page 199

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com