Consumers today are inundated with a barrage of promotions, advertisements, and information, and businesses face an uphill task in getting their message across. Sellers often find customers buzzing across into the open doors of wilier competitors. Three aspects of customer-centricity are helping businesses avoid this predicament.
Three facets of customer orientation
In the early ‘50s, retailers mailing out their promotional leaflets would often personalize them with hand-written names of the recipients – an example of personalization. Sometimes they would include material in their mail envelopes relevant to the addressee family demographic; farming implement brochures for farmers, fashion brochures for housewives, book brochures for the children – an example of customization. Further, some savvy retailers would take into account locality preferences for products, and send discount coupons or special offers for these products to customers within the given locality, and thereby drive demand further – an example of localization.
Quite obviously, customer orientation implies a deep understanding of the customer’s unique needs, tastes, and preferences. For marketing communication and strategies to have impact, a business needs to weed its customer data for inaccuracies and superficialities, and then tweak its messaging through in-depth customization, personalization, and localization.
Though these are tried and tested concepts, the terms are often used interchangeably and incorrectly in a wide variety of contexts. The simple examples below help define and differentiate each term a little bit better.
Personalization: We built it just for you!
Personalization is typically producer driven. A firm decides what marketing mix to provide a customer and builds a new product or service. The consumer is primarily passive with respect to the product or service characteristics. For example, an automobile manufacturer may look at student demographics, budgets, and preferences and come to the conclusion that the car that is most likely to appeal to a typical student has a low-price point, just two doors, an 800 cc engine, a sporty exhaust note, and brightly colored graphics.
Personalization is a game changer when a manufacturer understands its customer so well that its offering is specifically built around all of his or her stated and unstated needs. A well-personalized product or service delivers outstanding customer experience, and this happens only when a firm has invested significantly in collecting and analyzing customer data, to glean actionable insights.
Across industries, products and services, and especially digital services, float or sink based on the levels of personalization. This is most visibly seen in the successful online news portals and book stores that track visitor behavior through cookies and deliver user delight through an extremely personalized bouquet of offerings.
Customization: You can make it look like it was built just for you!
Customization is consumer initiated. The customer chooses from among the wide array of choices provided by the seller to customize the offering specifically for individual preferences and tastes. Thus an auto manufacturer may provide a range of customization options such as alloy wheels, a high-end music system, race kits and other optional accessories that do not come as standard, to capitalize on the varying budgets for a car purchase even within the student demographic.
In addition to the benefits of personalization, this ability to mix and match features further enhances the quality of a consumer’s interaction with a product or service. By gaining some amount of control in tweaking the characteristics of the purchased service or product, the consumer is able to express or enjoy his or her unique identity.
Customization can be as simple such as choosing the colour of a car, or complex such as understanding and tweaking the settings of a phone or website, or deciding the best configuration of a laptop. The online news aggregator, Google news, allows users to customize their news feed by specifying their interests by category, region, news outlet type, or even keyword. The user can thus create an extremely customized news website that throws up highly relevant news articles. Also, Dell, the computer manufacturer offers various models of customizable hardware for personal or business use. Customizing one’s laptop does require rudimentary knowledge of technical terms such as the difference between an HDD (Hard Disk Drive) vs an SSD (Solid State Drive). While this example may appear relatively simple, advanced customization will require more specialized knowledge that may not be possessed by all consumers.
Thus, customization while promising a high degree of customer satisfaction also demands a high degree of customer engagement. And this can be a dilemma. For allowing a customer too many choices can either please of confuse a customer. Power users would revel in the experience of being in the driver’s seat, making decisions from a myriad choices to tweak the product to their satisfaction, whereas customers not comfortably tech- savvy enough to make those choices would end up disgruntled, dissatisfied, and disengaged, moving on to products that while less customizable, are far simpler to use.
Businesses therefore must walk the thin line between simplicity and complexity, offering ‘just-enough’ customization options based on a nuanced understanding of the customer’s knowledge, abilities, and needs.
Localization: we make it look like we made it just for you, but it depends on who and where you are!
Localization is again primarily driven by the producer. The provider of goods and services fine-tunes the offerings to suit local tastes and preferences. For example, an auto manufacturer may need to localize all their products for the particular conditions of the local markets they sell in. This may include firming up the car’s suspension for the country’s poor road infrastructure, or naming it appropriately taking into consideration local languages and cultures.
Localization is a challenge primarily for MNC’s and requires a keen understanding of often difficult to decipher local cultures, customs, and tastes. Getting it wrong can make or break a company in the marketplace, as quite a few repeatedly discover. A car that sells well in many markets, will fare poorly in other markets for which it is not localized. Websites that fail to offer language options in a multi-lingual market place will fail to expand to potential. Products and services have often had to be renamed because of cultural faux-pas, or features retro-fitted or modified as local preferences were better understood over time.
Take for example an auto manufacturer that names a student-targeted car after a popular local musician. The car would sell only if the musician was popular among the student community, and not just among the larger populace. Similarly, for websites offering products and services to multi-lingual rural markets, no amount of personalization or customization options would appeal to a customer unless conveyed and explained to her in a language she could understand. Hence localization is the additional layer over and above personalization, and customization, that makes customer orientation truly effective.
Balancing the Three-legged Stool
Personalization, customization, and localization are the three legs of the customer orientation stool. Each one is needed and in the right lengths for a great customer experience. Getting the stool balanced requires not only a significant effort in understanding the customer, but several thoughtful decisions need to be made on questions such as the best trade-off between convenience and complexity, research costs and product pricing, and understanding consumer behavior better versus protecting consumers privacy concerns.
Answering these questions right and implementing an effective customer orientation strategy is the key to succeed in getting your customers to make a bee line towards your door.
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