Want Better ROI On Customized Products?
Here’s What You Need To Know
Companies are always trying out new marketing strategies to attract and retain customers. One such recent strategy to have taken the world by a storm is about customized products. Before we get dipper into the details, let us ask the most fundamental question: What are customized products?In simple terms, these products are tailor-made keeping in mind specific customers, markets, and occasions. Overall, these products look quite like the others in the market. However, the former has different colors, sports different logos, and is generally presented in a unique environment.
Customized products are targeted toward niche markets and are generally thought to deliver high returns of investment. An Investopedia article tells us that customization offers marketers at least two benefits. One is that it helps in identifying and segregating the market in terms of a niche. One example of this niche could be teenagers interested in hiking.
The other benefit of mass customization is that products targeted toward such a narrow audience do not cost much. Let’s see what kind of products this niche audience comprising teenagers would use. Some of these products are T-Shirts, rugged shoes, backpacks, etc. Now if a company interested in this audience customizes these products and later sells them to it, you could say that this company is in the mass customization business. Essentially, this company has broadcast its message to an extremely narrow audience at a very low cost.
While customization can be used in several industry segments like financial products, and software, it is more used in the retail industry. Many marketing gurus consider mass customization as the last frontier in competitive marketing.
It won’t be wrong to assume that mass customization has taken mass production to new levels. There have been at least 4 types of mass customization. These types are:
- Customization that requires collaboration
- Customization that adapts itself
- Customization that is transparent
- And finally, customization that is cosmetic or superficial.
While there have been several companies using mass customization strategies, successful companies undertake the following steps:
- Researching the market: They figuratively sieve the market trying to identify needs, gaps and other niches.
- Identifying the market: This step follows the first step. The target audience is identified and is defined as tightly as possible.
- Profitability: There is no use arriving at a target market unless it is profitable. Profit margins vary from one company or an industry segment to another.
- Messaging: All marketing is messaging, and customized marketing is smarter messaging
- Distribution: Finally, your customized products must be well distributed to the target audience
Successful companies generally follow the above template while customizing their products and distributing them to their customers.
Now let’s see the benefits of product customization. These are:
- When companies use customization smartly, they generate more sales.
- Since per unit production is low, profit margins are high.
- Brand recall is higher in comparison to standardized products.
- Customer stickiness goes up.
- Naturally, market shares also go up.
At this stage, it would be important to note that customers can be retail as well as institutional. But how can marketers judge the ROI of their customized products?
- Consider checking whether these products are useful or not. T-shirts, mugs, pens, etc are highly useful for the intended audience.
- What is the number of impressions per product? This means how many times is a particular product being used. Pens are used very intensively and so are laptops. In contrast, T-shirts are used maybe once a week.
- Another way the ROI can be measured is by checking the stickiness of the consumer with the product. Generally, customized products that have a strong emotional appeal are well received by the customer, more information here.
While customization sounds like a modernistic approach to promote yourself, it is important to note that it takes the right placement and product to work its magic.