Still, company-wide understanding of issues throughout the value chain need not be synonymous with consensual decisions. “The trick is to be very clear about which decisions need to be made where,” asserts Moeller.
Companies also need to focus on the customer experience. Instead of offering thousands of choices, Wharton’s Jerry Wind advises companies to group customizable elements into distinct, modular packages. Booz Allen experts agree that modular packages provide more manageable ways for salespeople to deal with customization, and tend to be somewhat easier for customers to handle. Special solutions that involve choices that are not on the customization “menu” need to be only for a small subset of the account base.
Know Your Mission
Ultimately, Booz Allen experts say that many of the difficulties companies have with customization relate to how clearly the company understands its business. Oliver says that at Toyota, for example, every employee is drilled in the company’s three values — quality, durability, and reliability. The QRD mantra “actually permeates across functions,” says Oliver. This common understanding of the company’s goals has not only sped up the production line, it has also shaped and made Toyota’s marketing more productive as well, according to Oliver.
Wharton’s Hoch says that companies with a high level of operational efficiency often have a clear sense of their most desirable customer. “For instance, Dell does provide a lot of value, but if you don’t know a lot about computers and you don’t want to wait two or three weeks, they don’t want to do business with you,” he says. Southwest is another company whose operational efficiency is driven by a clear idea of who its customers are and the kind of value they are looking for in an airline. “If you feel that you want to be called by your first name and you want an assigned seat and you want to be part of a frequent flier club and all that kinds of stuff, Southwest says, 'Sorry, you’re not our customer,'” he says.
While a company need not be as operationally focused as Dell or Southwest to succeed, understanding both the true cost and the value of its products is essential. Reaching that level of corporate self-awareness, and tailoring products to reflect that understanding, really can’t be done without strong communication between sales, marketing, and operations. As Booz Allen’s Oliver says, the cross-functional dialogue that smart customization entails is “a nontrivial challenge.”