Customization as the Abdication of Design

In an earlier post, it was considered that customization is a form of satisficing, an unhappy compromise between the cheapness and availability of mass-produced products and the expense and patience that must be abided to have something personalized.  But very often, customization represents an abdication of design: the maker provides an array of options for customers to customize the product to their own liking, because the designer has no idea what that might be.

The drawback to this approach is that it assumes that the customer has expertise.   To choose the product options that would best serve their needs, the customer must be highly familiar with the product, their needs, and the correlation of the two.   Where customers are not experts, their choices are made almost randomly, or at best on specious and superficial reasoning: the customer may choose a frivolous option (the color of a vehicle) over a more functional one (its cargo capacity).   

A second drawback is the additional effort necessary to learn the customization tools, which can often be overly complicated, again resulting in poor choice that will be discovered later.   This may be manifest in the inability to use a specific tool for a specific reason, or in the cognitive overload that results from too much choice, which causes customers to disengage or make a superficial decision to simplify the buying process, to the detriment of the ownership experience.

While the company may feel that it is exonerated from dissatisfaction due to the skill and choice of the customer, the customer still regards the product as unsatisfactory holds the maker to blame for his dissatisfaction.   The company is not typically held liable in the legal sense, but this is merely a short-term mitigation, as the customer’s perception of the maker is diminished considerably.  A disgruntled customer is seldom a repeat customer, and often a dissuader of other prospects.

There are of course mitigations to this risk: the maker may help the customer to understand their options and their impact on the ownership experience, or to visualize the totality of their choices before the purchase is made, but a mitigated compromise remains a compromise – it is “less bad” rather than “better” in terms of having a meaningful impact on the outcome.

Personalization to Mass Production to Customization

On its most fundamental level, design is about fashioning something (vehicle) to deliver a benefit to a person (beneficiary).   The more specific the benefit and person, the better a designer is able to tailor the vehicle to serve the beneficiary.   Where the designer does not know much about his beneficiary or the benefit that is being sought, he can at best design a general-purpose vehicle that delivers a weak benefit to a broad audience, and at worst he will design a useless vehicle that delivers no benefit to anyone.  And this is the problem of customization.

Before the advent of mass-production, personalization was the natural way of things.   Each maker designed each object for a specific use by a specific person.   Mass-production required compromise: to be efficient, a machine must make perfectly identical products regardless of the specific needs of the people who will buy them.   And this was a compromise people were willing to accept for the sake of having goods available and affordable.

The next phase in evolution was a step backward toward personalization, but not quite achieving it perfectly: the notion of customization meant some combination of mass-production and personalization, generally favoring the former: mass-produced objects had the same basic qualities, but certain of these qualities could be altered to suit the needs or tastes of the individual customer.  But the customizable features were defined by the maker, and the customization options were held to a very narrow range.   This represents a better compromise, but is still a compromise.

And this compromise describes the present state of design, as it has for the past hundred years or so.   The degree of customization varies by product and maker, but is still constrained to specific features and specific variations that the maker selects.   Consumer satisfaction with this compromise seems to wax and wane: there is always the demand for products to be better suited to the needs of the customer, but an unwillingness to compromise on the price and immediacy of possession.

So in the present time, the majority of personalized products are only affordable to the wealthy, and the demand for personalization by the less affluent is both inconstant and inconsistent.  There is some interest, but not the willingness to pay to achieve it.   Makers attempt to better understand these demands, and are in some instances willing to serve them if there is sufficient interest that is supported by a willingness to pay and to wait.

For the most part, we remain stuck in the era of customization, flirting with the notion of personalization in a superficial way.

Standardizing Customer Experience

A common fallacy and much-favored fantasy of customer experience design is the notion that there is “one best way” to go about performing a task – buying a car, managing an investment portfolio, communicating with friends – toward which all people would gravitate if only it were put before them.   This never ends well, and often ends tragically.  The fatal flaw is not in the execution, but in the very belief that customer experience can be standardized.

Scientists readily admit that their study of the human mind is very primitive.  Even studies of the brain as an organ are confounded by its unfathomable complexity: 100 billion neurons, each of which may have up to 100,000 dendrites and axons, each of which communicates with others through a complex and scalar combination of electricity and chemical signals.   At one time, it was theorized that a single brain could have more than 300 trillion constantly changing connections, and this number has since been increased significantly as understanding of even the basic mechanics has expanded.

In simpler terms, the variations in brain activity are for all concerns infinite.  There is no standard brain, no standard mind, no standard behavior, and no standard customer.   The various ways that people think and act are grouped into hundreds of cultures, and each culture is merely a sloppy amalgam of what is presumed to be commonalities.   And even people of largely identical culture can have radically different perspectives.   And with all of this in mind, the attempt to discover the “one best way” for all people, for all minds, for all brains, is a fruitless enterprise.

From a practical perspective, we can easily define the most efficient way of accomplishing a task – the fewest and most simple steps to effect an outcome – and declare it to be “the best way” to accomplish a goal.  But customers will reject it in favor of less efficient but more psychologically comfortable ways, and sometimes may reject the goal itself.

Standardization is an imperative of the Industrial Era – it’s far more efficient (hence cost effective) to make millions of products that are identical clones of one another than to customize products to suit the needs of each customer.   And this mentality has carried over into the service industry: if we can force customers to yield to our preferred processes, we can serve them more efficiently.   But “efficient for us” does not guarantee “desirable to them,” as many have discovered through ghastly and expensive failures.

In the present day, the imperative is for personalization and flexibility, making products and the processes to obtain and use them as flexible as possible to accommodate the myriad of ways in which a customer might approach any given task.  While it is sometimes claimed that it is impossible to know, this excuse no longer holds water – we are now connected enough to the customer to observe their behavior in granular detail, but few bother to do so, and many fail to take what they observe into account.

Flexibility also does not necessarily mean chaos, if a solution is elegantly designed.   Consider the most popular word-processing program: there are over 30 ways to make a word or phrase appear in boldface.  The existence of so many options does not render the program a chaos, as each user is able to find his preferred method, and may even use different methods in different instances to accomplish the very same goal.   They are not compelled to learn “the one best way” to set text in boldface, and are not restricted to it when some other method would be more suitable.   The myriad of options are simply and obsequiously available for them to choose at their leisure.

And this is the gold standard of customer experience – the service each customer wants, the way that he wants it.   While customers may satisfice in the meantime, the market and the future belongs to the firm that will undertake the effort to provide it.   It may take rather a long process of evolution toward this end, but given the competitiveness of present-day markets, it is inevitable.

Price Discrimination and Customization

It's likely important to prefix this meditation with a comment on the concept of discrimination - as the word itself is so closely linked to politically sensitive issues of race, gender, etc., that it's difficult to consider in its intended context without those issues intruding.    In short, "price discrimination" is an economic concept that pertains to charging different prices to different customers - and for the purpose of this piece, it is intended to deal with reasons for discrimination that can be objectively substantiated.

To further disambiguate, I'm setting aside price discrimination as a concept related to the goal of revenue maximization, which takes as its sole consideration the customer's willingness to pay and, in effect, seeks to inform the decision of the supplier toward the goal of asking as high a price as possible to fully absorb consumer surplus. That is the context in which it is most often considered, but the context least germane to my present train of thought, which focuses more on price discrimination as an effect of cost.

That said ...

Creating a product that is customized to the needs of a specific customer requires price discrimination in the highest degree. In part, it is a matter of financial necessity - where customization for the needs and desires of a specific individual require additional production cost, the additional cost must be borne by someone.  In another sense, it is a matter of ethics that the additional cost be borne by the very individual whose demands necessitated that they be expended.

Said another way, a customer who desires something extra should (and generally does) accept that the cost of the "something extra" is added to the price he is charged for having it. It's not really considered where the "extra" is a discreet product: a customer who wants shoes and a matching belt pays the cost of the belt in addition to the cost of the shoes, whereas another customer who simply wants the shoes does not pay for the belt (provided the two are not bundled by the retailer, such that he must purchase the belt to obtain the shoes).

It becomes slightly less straightforward when the purchase is perceived as a single product, especially a complex one, but my sense is that customers generally understand and accept the concept of additional features that add cost to a basic product: a vehicle with power windows costs more than a vehicle of the exact same type that does not have this added feature.  This comes as no surprise and raises no objection.

And the complexity becomes even greater when hidden factors create discriminate prices for the same good: a shirt costs far less at the factory store than in a department store in another state because of transportation costs; or the shirt costs more when purchased form a shop in a mall than it does from a strip mall because of the higher rent the shopkeeper must pay.

It was simple enough to understand before the Internet came about, but broad knowledge of market details (the price of goods in various places) and complete ignorance of others (the factors that cause the price to be different in various locations) led to something of a calamity: customers cried "unfair" when the same article had different prices in different locations, particularly when the locations were in the same general vicinity (the same item costs considerably more at two shops in the same town).

It's a bit ironic that the notion of "fairness" is raised at all. The alternative approach, to charge the same price in all locations, means that individuals who purchase the item in locations where it could be had for less (lower transportation cost, lower shop overhead, etc.) must now pay more than their fare share to subsidize the cost of making the item available in places where it costs more to provide it. It that sense, the objection to price differences is a demand for unfairness.

Dragging myself back to the notion of customization: the demand of a customer to have a product tailored to his specific needs and desires must necessarily be accompanied by a willingness to pay a price that covers the cost of tailoring it, as differentiated from other customers who accept the "standard" product or have a list of customizations all their own. This is true whether the differentiation is the result of differences in the physical product (an item with or without a given feature) or in the location (an item sold in one location or channel versus another).

This results in an increasing complexity in the structure of cost to produce and furnish a given item to a given customer. For a firm that chooses to customize, there can be no standard price, nor any way to give the customer an expectation of the price until there has been a long discussion of the variables involved.

This places a great deal of burden on the customer, such that many product decisions must be made and communicated to the vendor before a price can be given.  Pricing by feature is fairly standard practice in certain industries, generally those that provide high-cost items that are infrequently purchased: buying a car or having a house built is a very complex purchasing event and customers accept and expect that the price relies on the features chosen for their product. Buying a computer, with all the options and related costs, is likewise complex.

But the same level of complexity is involved in decisions of far lesser magnitude: ordering a hot dog from a street vendor requires the customer to make a set of decisions: what kind of sausage, what kind of bread, what additional toppings to include. However in this situation, the customer's options have no effect on the price of the item, and the vendor merely includes them - but they are not gratuitous: the cost of the most expensive options is borne even by customers who do not choose to have them. Their cost is so negligible that customers are largely indifferent to this fact, and may often be oblivious to it.

In that instance, it is largely a matter of magnitude - a customer doesn't demand a three-cent discount at a deli because he opted not to have mustard on his sandwich, but he might be outraged at a $20/night "resort fee" at a hotel to pay for a pool, sauna, and workout room that he never used during a week-long visit (which hotels get away with because of business travelers who expense their bill and don't pay much attention - another factor entirely).

But because of the freedom of information, customers are becoming increasingly aware of and concerned about price discrimination, and the vendor of a product that can be customized at all must be sensitive to the reaction the customer will have when every modification impacts the price, and especially where invisible factors cause price discrimination, they are increasingly intolerant of it.

And it does seem like a no-win situation: to offer the same product at the same price to all customers requires a great deal of coordination (and even collusion if the same manufactured item is sold through competing retailers), and customers who expect to get a better price for accepting a standard product are hostile to the notion of paying more to absorb the cost of serving more finicky customers.

The net result of this on customer experience is also conflicted, between the customer's desire to have a highly customized product, yet to be quoted a firm price in advance of providing any information whatsoever about the customizations the customer desires; and the vendor's desire to offer an attractive price for a product most people want, and yet be able to serve the demand for customization.

All things considered, it's a problem to which I can see no solution - and what's more, it is a dilemma that more and more industries will continue to face as customers become increasingly demanding of customization.

Customization as Abdication, Part 2

I sense I may have been too oblique and abstract in my last post, in which I suggested that burdening the customer with designing their own product is an abdication of the responsibilities of the producer. I've got an example that will help to concretize that perhaps a bit more:

There's an Asian restaurant in my area that gives customers two options: you can order an item from the menu (standardized product) or you can go to the stir-fry bar and pick out your own ingredients and sauces and hand them to a guy who will toss them into a wok for you (customized). I've never gone for the customized product here, and have seldom seen anyone else doing so.

The entire reason I go to a proper restaurant (not merely a QSR when I need to cram something in my guts to make them stop complaining) an pay a premium is because I value the skill of the chef - he has the expertise to know what ingredients to combine and in what proportions to make a "good" dish. The service that I am paying for is the expertise of a skilled professional who knows what he's doing and will make better choices for me than I am capable of making for myself.

In all fairness, some customers clearly feel otherwise. If no-one at all wanted the customized offering, the bar would have been taken down at some point and replaced with more tables - it's a huge waste of cash for the restaurant to chop up so much product and throw it away at the end of each day (which I hope is their practice) - so to my earlier point, different customers prefer different things, and it's probably wise for the restaurant to offer both extremes.

Another example is a chain I saw in Dallas, steakhouses where the patrons cook their own steaks. I can't say much about that place, as I never set foot in one and find the very notion laughable - but they're still in business, which means that a sufficient number of customers actually delight in this option.

But to the point ... if a restaurant merely provides ingredients and equipment, and customers must come up with their own recipe and cook their own food, then what value does the restaurant provide to its customers? They peel and chop the vegetables, start the fire, and that's it. Hardly worth the significant difference in price between a restaurant meal and cooking at home, and I sense that's part of the reason that there is a great revival of interest in home cooking.

And to go further ... if all restaurants were to move to this business model, how does one restaurant differentiate its service from that of the one next door? If the only difference is in the choice of ingredients, I don't see that as sustainable: if the only advantage you have over a competitor is that you have parsnips, and customers seem to value that difference, they can match your offering the next time they place a grocery order.

And as usual, I feel the need to state I'm not arguing for either extreme, though I do sense the pendulum has swung too far in one direction for certain offerings, to the point that providers fail to provide sufficient value. There is no single answer of how much of the design, and even the labor, in producing a product ought to be laden upon the customer - while I do like having some choices, I also expect a vendor to apply some expertise in identifying a product that suits my needs. It's their job, and it's what I'm paying them to do.

Customization as Abdication

One of the drawbacks of customization is it places the burden upon the customer to decide what options best suit their needs. There’s a careful balance to be struck between the extremes of burdening the customer with design decisions and restricting the customer a standard offering.

The era of mass production was very much about standardization: a product could be produced very efficiently if every unit is exactly the same and the customer can take it or leave it. Henry Ford’s statement that “a customer can have a car painted any color that he wants so long as its black” reflects this attitude – and he held fast to it until he began losing ground to competitors who offered other choices.

In recent years, technology presses us a perhaps too far in the opposite direction. While it is in some instances delightful to be able to pick and choose among hundreds of qualities, features, and options, it’s now become quite a chore to have to tell a product manufacturer all of those details.

I don’t see a way to arrive at a perfect blend for every customer. No matter how you balance the freedom of choice against the burden of having to choose, someone will tell you you’re making it too hard and someone else will tell you that they feel constrained. You will never get that right for all people.

But more to the point, my sense is that technology is pressing us too far to the opposite extreme, where the customer is burdened with many choices – not just from different providers, but from providers who refuse to design a product and instead lay that task on the customer.

You can wrap that in whatever rhetoric you please, but it comes down to a lack of competence, or perhaps a lack of moral fiber. If the producer makes the decisions, the producer is to blame if customers don’t accept the product. If he can duck the responsibility of making a decision, but instead depend on the customer to do so, then the customer must accept the blame if the final product doesn’t suit his needs.

And that is the abdication of service. If a producer cannot provide a solution to a customer’s needs, but merely follows the customer’s preferences without lending any assistance to the decision-making process, the question becomes: what is that producer really doing for the consumer?

Ultimately, the producer of a product contributes value to his customer by providing a solution. The physical good produced is merely a means to that end, and likely less important than the intangible element that makes the physical product of value.

To be clear, I‘m not arguing in favor of the opposite extreme of standardized products and no customer choice –a balance must be struck that does not go to the exact opposite extreme of requiring the customer to design a product that serves their own needs. In may instances, the customer doesn’t know – and what he is paying for is your expertise in determining a solution, not merely to make a thing according to someone else’s directions. To refuse to provide any assistance is to abdicate the role, and responsibility, of a service provider.