The Rise of [Service Mass] Customization

FIA Middle Management WorkshopVienna, Austria 2015

Mark A.M. Kramer

Agenda / Overview

Agenda

● Introduction● Exploring [Service Mass] Customization (SMC)● The Applicability of SMC for FIA Automobile Clubs● Tools to Implement Service Mass Customization● Conclusion (of the presentation)● Group Work (start - continue in afternoon)

OverviewIntroduction: what to expect in this presentation / workshop

To explore how “customization” can increase value for members of Automobile Clubs

Our Goal!

Florian travels differently

Concepts / DefinitionsIdeas explored in this presentation and workshop

What is [Service Mass] Customization?

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The concept “Mass Customization” first appeared as a term in Stan Davis’ (1987) book: Future Perfect.

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The concept “Mass Customization” first appeared as a term in Stan Davis’ (1987) book Future Perfect. What Davis foresaw was a time when notions of ‘mass production’ and ‘mass markets’ had ended, and where every customer could have goods and services tailored to their individual needs and wishes. In effect, each consumer would represent a market size of one.

Mass Customization

Mass customization, in marketing, manufacturing, call centers and management, is the use of flexible computer-aided manufacturing systems to produce custom output. Those systems combine the low unit costs of mass production processes with the flexibility of individual customization.

Mass Customization

The process of delivering wide-market goods and services that are modified to satisfy a specific customer need. Mass customization is a marketing and manufacturing technique that combines the flexibility and personalization of "custom-made" with the low unit costs associated with mass production. Many applications of mass customization include software-based product configurations that allow end-users to add and/or change certain functionalities of a core product. Sometimes called "made to order" or "built to order."

"Mass Customization is a process by which firms apply technology and management methods to provide product variety and customization through flexibility and quick responsiveness."

Davis, 1987; B.J. Pine II, 1993

"Mass Customization is the ability to provide products tailored to individual customer needs on a large scale at, or close to, mass production efficiency using flexible processes."

Da Silveira. Borenstein, & foliate, 2001; Hart, 1995; Heiskala, etc all.,2005; B.J. Pine II, 1993.

"Mass Customization can be understood as a means to achieve a competitive advantage for service organizations."

- Maarten ter Harmsel

Mass Customization

B. Joseph Pine II's 1992 book "Mass Customization: The New Frontier In Business Competition" describes four types of mass customization:

1. Collaborative Customization2. Adaptive Customization3. Transparent Customization4. Cosmetic Customization

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Mass Customization

Each type realizes that customers are heterogeneous and want different combinations of product features and benefits

Collaborative Customization

Companies work in partnership with individual customers to develop precise product offerings to best suit each customer's needs.

● Co-creation● Dialogue with customers

● Co-creation● Dialogue with customers

Adaptive Customization

Companies produce standardized products that users can alter to fit their needs

For businesses whose customers want the product/service to perform in different ways of different occasions [contexts]

Transparent Customization

Companies provide unique products to individual customers without overtly stating the products are customized.

● Customers needs are predictable or deducible

● Cutomized, but unknown to customers

Cosmetic customization

Cosmetic Customization - where companies produce standardized products but market the products in different ways to various customers.

● Standard product presented differently for different customers

● Personalized presentation

Exploring [Mass Service] CustomizationCurrent practice and applicability to FIA Automobile Clubs

2. Exploring [Mass Service] Customization

● Introduce examples of mass customization in goods■ Provide useful examples for inspiration■ There are many examples, I will select examples that can be

useful for FiA Middle Management participants○ Service Mass Customization as a solution for FiA Members○ Explore examples of how Information and Communications

Technologies (ICTs) are transforming business ■ The digitization of products & services■ Connected customers

Customization Inspiration

Customized Products / Services

http://www.nike.com/fr/fr_fr/c/nikeid

http://www.tailor4less.com/en-uk

https://www.outfittery.com

Customized InformationPersonalized Routing & Intelligent Agents

Customized Maps & Routing Service

Customized Maps & Routing Service

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Siri

Intelligent agents - cutomization on demand

https://cdn1.vox-cdn.com/assets/4222613/cortana-windows-phone-theverge-5_1020.jpg

Context awareness - auto-customization

https://www.google.com/landing/now/

https://d13yacurqjgara.cloudfront.net/users/19894/screenshots/2041153/googlenow_dribbble3.gif

Customized MobilityMobility Services

Just in-time mobility

On demand mobility

On demand mobility

Mobility On-demand Car-sharing

Mobility On-demand

What do all these services generate in common?

What do all these services generate in common?

BIG DATA

Customer Insights

AGGREGATE

Customer Insights

BIG DATA

Service Customization Some more examples

Personalization through cross-service integration

Pay As You Drive - Automobile Insurance

Pay As You Drive - Automobile Insurance

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Predictive Maintenance

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Challenges to Service Mass CustomizationHow to implement Service Mass Customization (SMC)

4. Challenges to Service Mass Customization (SMC)

● FIA Automobile Club Perspective○ Conducting market research

■ Gathering data on customers■ Understanding customer preferences■ Challenge of developing highly personalized experiences for “End-

user” / Customer● End-user” / Customer Perspective

■ Relationship to Automobile Club■ Data Privacy / Trust

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“The greatest problem of the information economy is privacy.”

-Stan Davis

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SOURCE: http://ubiquity.acm.org/article.cfm?id=380745

Implementing Mass CustomizationSelect tools and methods to help implement customization

The Applicability of Service Mass Customization for FIA Automobile Clubs

● Service Mass Customization and modularization○ Service design / Experience design○ Customer Journeys / Personas

● Service Mass Customization and Customer Integration

Tools to Implement Service Mass Customization

● Service design tools○ Customer Journey Mapping○ Co-creation methods○ Persona development

● Market research tools○ Social media / Communication channels○ Collaboration / Focus groups○ The role of BIG DATA

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Methods: Forrester CURA

CURA Framework - Mass Customized Product Strategy

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Group WorkIntroducing the activities for the workshop group activity

Group Work | Persona Development

Persona Development to help understand the archetypical “Automobile club members” in order to modularize and create customized service experiences

"One key challenge for service mass customization is to translate information about consumer preferences gained through market research data into narrative descriptions of archetype customers."

- Haas, Kunz.

How to Master the Challenges of Service Mass Customization – A Persona-Based Approach

http://userforge.com

http://personapp.io

ConclusionConcluding remarks, Inspiration and Questions and Answers

Conclusion

● Inspiration and encouragement to pursue Service Mass Customization

● References and learning materials● Questions & Answers

“Mass customisation organisations never know what customers will ask for next. All they can do is strive to be ever more prepared to meet the next request.”

-Joseph Pine II

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SOURCE: http://www.economist.com/node/14299807

“Customers do not want choice, they want exactly what they want.”

-Joseph Pine II

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SOURCE: http://www.economist.com/node/14299807

The Paradox of Choice

Personalization

Personalization, also known as customization, consists of tailoring a service or a product to accommodate specific individuals, as opposed to general groups. A wide variety of organizations use personalization to improve customer satisfaction, as well as for advertising. Personalization is a key element in social media and recommender systems.

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The Role of CRM

“Customers do not want choice, they want exactly what they want.”

-Joseph Pine II

Merci / Thank you / Danke

Mark A.M. Kramer | @MAMK | +436603602256 | mark@kramer.mobi