How disruptive is the following statement to your way of thinking about business?
“Customers don’t want a choice; they want exactly what they want.”
If your business model is based on a 20th century mass production paradigm, this observation about 21st century consumers by acclaimed author and business coach Joe Pine might spell trouble.
But what if you re a custom artisan? What impact do 21st century consumer attitudes and the mass customization movement in business have on your livelihood?
In 1992, Mr. Pine wrote Mass Customization: The New Frontier in Business Competition and articulated an emerging business paradigm, mass customization, in which companies abandon mass production standardization and begin to make particular things for particular customers. In 1999, Mr. Pine co-wrote The Experience Economy: Work is Theater & Every Business a Stage in which he coined the phrase, “the experience economy,” and posited that consumer experience is just as much an economic offering as goods and services and that customers will pay a premium for an exceptional experience. This year, he’s co-authored Infinite Possibility: Creating Customer Value on the Digital Frontier, which focuses on the digital innovations behind mass customization and the potential and challenges that technology like new social media brings to the experience economy of the 21st century.
In a Nov. 26, 2011 interview for the BBC radio program “Peter Day’s World of Business,” Mr. Pine touched on ideas from these three books, and his comments can serve to raise questions about the impact of mass customization and the experience economy on the world of custom artisanal production.
Here are some key points from the interview.
Although many businesses have tried to introduce mass customization into their offerings, this is a difficult transformation. The number one obstacle they face is the mass production mindset. Mass production is designed to be “pushed” by efficiency, the need to utilize materials and equipment in the most cost-effective manner possible. Mass customization, on the other hand, is “pulled” by customers’ choices.
Mass customization has added a new element to the classic economic dyad of standardized goods and customized services. When companies mass customize goods, they become service businesses that help customers figure out what they want. “Mass customization automatically turns a service into an experience.” If people enjoy that experience, they will pay a premium for it. The experience, like “the Apple experience,” then drives demand.
Social media, like Facebook and Twitter, are helping people makes choices (and figure out what it is they want), and engaging in social media is taking up a significant amount of consumers’ time. Social media is an important part of the experience economy today. There is a great opportunity for reaching customers through social media.
On the Internet, however, “everything wants to be free.” Companies can attract eyeballs online, but how do you get people to pay for these experiences? If you’re an advertiser, you can make money from eyeballs, but how do you build value into the virtual worlds of social media?
The key to building value in the virtual world is to NOT abandon the real world, but to create an “augmented reality” where the virtual benefits the real world. A GPS device is now a commonplace example of an “augmented reality,” but there are more possibilities. For example, the Netherlands-based company Layar can turn your cell-phone into a browser that can layer the world you see through your phone camera with information. Take a look at this demonstration video.
That augmented reality is remarkable stuff. So, what do X-ray specs have to do with custom artisanal production? (Is there a CustomMade app yet?)
For now, let’s focus on mass customization and the experience economy and their possible impact on custom artisans. At first glance, it would seem custom artisans have a jump on this paradigm, just as they appear to have a head start on the maker movement. Providing particular goods for particular people is the custom approach. As for providing experiences for consumers, custom artisans have been contributing to a wide range: the satisfaction of having heirloom furniture to pass down to your children, the profound connection one can achieve through a unique gift custom made for a spouse, the sense of pride when your investment in a custom home remodeling project is realized, or the joy of owning a commissioned work of art.
In prior blogs, we’ve discussed other writers who have noted that companies like Nike have made the average consumer familiar with customization and technology has put it within their reach. Previously, I made a distinction between the service a consumer receives from a custom mass producer and from a custom artisan. A custom mass producer is providing participation in a brand. A custom artisan is providing craftsmanship.
However, Mr. Pine’s attention to the experience component of consumption has led me to consider another question: are there two custom mindsets, the “mass” and the “traditional?” If so, what happens to the traditional custom experience if the experience of mass customization becomes the dominant model for consumer expectations about custom production in general?
Please share your comments and thoughts.