I've written in the past about the concept of mass customization and its effective use in manufacturing environments such as Levi's and other companies.

However, bank-ers have not effectively used mass customization yet. One notable exception is USAA, the first company to replace individual memory with institutional memory so that service is seamless regardless of who answers the phone. USAA has been extremely successful in capturing customer feedback and learning more about their likes and dislikes.

USAA images every document sent to and from every customer and makes the record available to any service representative talking to a customer. In addition, it has developed event-oriented products to meet the complete set of client needs associated with events such as auto purchases, home purchases, and others.

The company also continually integrates new information from customer behavior to refine its understanding of customer preferences, becoming a continuous learning organization, while creating mass-produced product packages to individual clients.

The use of technology is critical to understanding customer needs and preferences and receiving continual behavioral feedback from the marketplace. First USA, Capital One, and other premier credit card companies have over 3,000 tests going on at any given point in time to learn more about client preferences. They use technology to determine individual client needs.

Their retention rate and conversion ratios are much higher than their competitors' due to this continuous learning process and the ability to customize a process that is geared to customers' individual needs.

Bankers need to become better at offering products beyond "one size fits all." The use of product packages designed around events, stages in a person's life, or a customer's credit history could be key to effective mass customization in the banking industry. Offering combinations of banking and other vendors' products for a customer's wedding day, baby arrival, or college education is one way to achieve mass customization.

Other examples include product packages for the "unbanked," using less costly alternative delivery to make the package economically viable to both the client and shareholder, and other bundling opportunities to meet the needs of customers of different credit qualities and appetites.

The key to all these examples is a total commitment and focus on customer satisfaction. Companies such as Federal Express have developed a common vision that motivates every team member to move toward a single direction. Focused vision with customer-specific marketing can mobilize the entire enterprise toward achieving a sustainable competitive advantage.

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