Product Configuration: Balancing Customer Experiences and Pricing

For any company to be successful and grow they have got to exceed customers’ expectations consistently – to only meet them is to flat-line sales. Yet there is also the need for delivering exceptional products as part of the experience.

Aligning the two using product configuration can be the most profitable strategy of all.

The Experience Argument
Much as been written about delivering exceptional customer experiences, including the Three “Ds” of Customer Experience from Harvard Business School and the excellent work that Joe Pine has done over the years on this topic. Managing channels like a marriage, with all the conflicts and the rewards, must be a core focus of any company if they are going to deliver exceptional customer experiences over time. The bottom line is that channel partnerships are emerging as one of the most powerful asset any company can have today.

The Innovation and Products Argument

Grow or die is the mantra is nearly very technology-driven company on the planet. From nearly every component and semiconductor manufacturer to the accelerated product lifecycles of most tech products, companies live and die by meeting their market windows. Be early with a product generation and your company can win exceptionally high market share; be late and be viewed as less viable, weak and out of touch with the market.

With so much riding on the ability to keep up with innovation and product designs, every insight, element of intelligence, and piece of data gleaned from customers is critically important. As Blue Ocean Strategy has shown it is not in the rigid, highly spending hierarchical approaches to development that innovation flourishes; it is in the perspective of making the right decisions at the right time to open up new markets. Product configuration can help out by accomplishing the following:

• Launching new build-to-order and product configuration-based products entirely through dealer and online channels. Using sales configuration or quoting and product configuration systems as the basis for launching customizable products entirely through indirect channels can accomplish some great objectives. First, it can give your indirect channels exceptional levels of ownership for product strategies specifically developed to enrich them. Second, in the grow or die world of high tech products, being able on the launch date to roll out a fully configured product configurator is powerful. It makes a global statement: we believe in our resellers and their ability to sell these customizable products and they will exceed any customer expectation. What a tremendous vote of confidence for any channel program. Both Cisco and their product configuration strategies and the HP product configuration strategy do this often.

• Services, services, services and answering the question “are you strong enough to serve?” Let’s face it, for resellers their lifeblood is finding unmet needs in the client base that for many of them, go back years and years. How can product configuration be used to fuel their fact-finding and the ability to get to those unmet needs? Ask yourself this question often if you are in a grow or die industry like networking equipment industry.

• Data mining those quotes and product configurations abandoned. This can show you where your product strategies are falling short relative to customers’ expectations and also serve to provide ideas for Product Lifecycle Management efforts in the future.

Bottom Line: From those companies competing in grow or die industries and all of those struggling to make product introductions count, it’s time to look at how product configuration strategies can help you grow by making every customer experience exceptional, and by learning what matters most to your customers.

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