What I learned this week is that companies aren't primarily pursuing configured products to drive higher margins. A long held belief of mine was rocked the other day during an internal research review. Michelle Boucher of Aberdeen is running a study on customized and configured products. As we started to review the pressures driving companies to tailorable products, I naturally expected to hear that companies offer customized products (engineer to order, assemble to order, etc.) to drive higher levels of profit. "One-to-one marketing," "batch size of one," and other concepts running through my head I sat back and listened for the answer ... that didn't come. In fact, higher profit margins was very low on the list of priorities.

So why Customize?
Admittedly, some industries are compelled to offer custom products. Architecture, building products like windows and doors, and industrial equipment like valves are products I have learned from in the past. These industries offer custom product because they have to. And yes, they charge more for them. But other industries offer configuration as well (although I haven't heard about Levi's make to fit jeans in a long time, so I assume that project went by the wayside). In the end, it appears that the primary driver is to increase fit with customer needs and improve customer satisfaction. It appears that the goal is not to get a higher margin from the order, it's to get the order in the first place! There is a lot more to the report, but this one finding was so different than my expectation that it had to qualify for "what I learned" this week. As I told the team, "that's why we do the research!"

So customizing and configuring products is not primarily intended at driving higher margins as I have believed for some time. Who knew? I didn't, if you did let us know about it. Or was this an anomaly in our preliminary findings? Let me know what it looks like from your vantage point.