In my last post I wrote about how personalising a product or service means you need to know lots about the person. And that means having lots of personal data. On one hand most people want the very best deals and meaningful interactions with organisations whose products and services they need and want. On the other hand, there are a growing number of people who are uncomfortable about who has access to our personal data, why they have it, and what else they are doing with it (or what might happen to it unintentionally).
Whilst the idea of personalisation is appealing to many, there’s a deep debate about how we balance the innovation and convenience of personalisation with the security and privacy implications.
This post is about personalisation, but from the perspective of ‘Mass Customisation’, one of the ideas that Joseph Pine wrote about 20 years ago.
First, a bit of background on the idea. Pine describes how we’ve progressed through clear economic phases:
- In the early days, most markets were centred around the commodities we produced as an agrarian society; the output from farming land and animals. For example, we bought and sold coffee beans in sacks.
- Some people started to process these raw materials and package them up for a particular need – these raw materials had been ‘customised’. They became goods, and over time we stopped caring about who supplied the raw materials – we ‘commoditised’ them. We bought and sold pre-ground coffee in packets.
- Then, over time, many started to use the available goods to create services, adding further value and of course charging a higher price still. We stopped caring so much about who supplied the goods behind the service, and we commoditised further. We bought and sold fresh coffee by the cup.
His main point was that this is a repeating trend: we customise to create value, and in doing so, we end up commoditising.
In his book, and later in this popular TED talk, he asked the next logical question: so what’s after services? What happens when you customise a service? His view, I think generally accepted, is that you get an experience. A service tailored in some way. Here’s the coffee analogy: the service providers not only grind the beans for us and make us a coffee, but we are invited to relax in big comfy arm chairs, listen to jazz and eat muffins. A specific customer journey. A specific environment. A specific view of added value, and importantly about finding new ways to make and sustain the profit margin.
And it makes perfect business sense: coffee beans cost less than a penny; a packet of ground coffee costs a few pounds; and fresh coffee costs £1.50 a cup. Yet a visit to Starbucks for a skinny-latte-extra-shot-no-foam-Norah-Jones-serenade costs nearer £5. And guess who’s making the good profit margins.
As ever, a picture helps:
But here’s what’s interesting: what comes after experiences?
The logical answer is that it will be the customisation of experiences. But what does that mean, exactly? Pine believes that it’s all about transformation – helping you transform yourself, physically, intellectually or emotionally. But having thought about it for a while I believe that it’s much more specific than that.
To me at least, customising an experience means understanding when you have the experience. And where. And with whom you share it. And a whole range of other things that depend on your context. I’ve come to think of these as specific ‘moments’.
I believe that as we’re moving from the service economy and into today’s emerging ‘experience economy’, we’re starting to see the early signs of a new economy around personalised experiences. At specific times of day, like when you get up. At specific locations, like your place of work. And specific social contexts, like going out for a family meal.
Just as companies differentiate themselves today by improving the customer service and the customer experience, I believe that they will look for ways to add new value by personalising customer moments. When you walk into a store. When you get engaged. When the weather changes and you need to change your route to work. When you’re moving house.
Just look at what Google are doing with their personalised digital assistant application, Google Now. They take data from your daily routine, your current location, your social and search activity, plus other digital breadcrumbs and provide up-to-the minute recommendations/ suggestions about what might matter to you – right now.
I recently came across this quote from Alain de Botton:
“Most of what makes a book ‘good’ is that we are reading it at the right moment for us…”
This really struck a chord and the idea of moments has become very clear to me now. And how understanding context is fundamental to getting personalisation right (and why so many get it wrong). Pine’s idea of Mass Customisation is an important one, and something that I think will come to life as we develop better tools to help us express context – who, what, when and where matters to us individually.
Personalisation. It’s a matter of time. And of moments.