CURMUDGUCATION: Personalization and the Outliers

CURMUDGUCATION: Personalization and the Outliers:

Personalization and the Outliers

Henry Ford was an early proponent of personalization. "Any customer can have a car pained any color that he wants," said Ford in 1909, "so long as it is black."

There have always been limits to personalization. I like to wear hats, but my head is some sort of extra-large melon, so while hat manufacturers may offer choices to fit the personal size preferences of many customers, I'm an outlier. Many times I'm just SOL on a particular hat.

Imagine that all your potential customers are like a big bell curve. Aim too narrow, meeting the personal preferences of the fat part at the peak, and you will not capture as much of the market as you'd like. Or if you're up for it, imagine a line plot-- the sweet spot is in covering the cluster at the center while ignoring the outliers who are off in their own little corner. You can predict what the majority of your customers probably want-- to be sure of hitting the outliers, you would have to cover the entire charter, including areas that were completely empty. Spread out to offer every option that every customer on the diagram wants, and on the thin ends you'll be losing money. Burger King could offer pineapple and bananas as burger toppings, and somebody might even order it, but they would never sell enough to cover the cost of stocking those ingredients. Maybe nobody would ever choose banana at all, and BK would be out the money. They could advertise they were offering perfectly personalized burgers, but they'd be losing money to do it.

Personalization as a marketing strategy has to aim for the sweet spot where you are hitting maximum customers for minimum. You can only do that by recognizing that some customers have personal preferences that it will cost you too much to meet, and so those outliers must be cut loose. The CURMUDGUCATION: Personalization and the Outliers: