On the front end, personalizing products is a great idea that can give you a distinctive edge over your competitors. On the back end, however, offering personalization can wreak havoc if not implemented correctly.
First things first: Will you be personalizing the products inhouse or outsourcing the service to an engraver, embroidery shop, or printer? George Mollo, president of Nanuet, NY-based consultancy GJM Associates, suggests the latter if you’re just testing the waters or are a relatively small company.
“It all depends on the volume and the outsourcing costs vs. buying the equipment and doing it yourself,” Mollo says. “The volume point really gets down to cost analysis — how much it will cost to have a staff and the cost of the machines. When you’re doing enough volume that you can pay for all of this, then you should stop outsourcing and move your personalization inhouse.”
The manufacturers or suppliers of the products you intend to personalize may even be able to do the work themselves and then drop-ship the items to the customers.
Before you can determine whether handling personalization inhouse would be more cost-effecient than outsourcing it, you of course need to know some basic costs. A hot stamp machine, which puts foil stamping on invitations and other stationery, is generally in the $3,000-$5,000 price range. The cost of an engraving machine ranges from $15,000-$40,000 for one that does metal etching to $40,000-$80,000 for a laser engraver. On top of that, you have to buy design software and fonts to use with these machines, at a cost of up to $8,000.
And don’t neglect to budget in maintenance costs — as well as unexpected downtime. “One thing you always want to ask the manufacturer is how quickly replacement parts can be available,” says Matt Mitchell, marketing director of Charlotte, NC-based wedding accessories merchant Exclusively Weddings. “Replacement equipment and replacement parts are also a part of the overall cost, even when you have a service contract, but you have to factor maintenance and repair in because you know it’s going to happen.”
EASY DOES IT
Nonetheless, many companies do find that personalizing products onsite is less expensive than outsourcing. It is also quicker and provides them with greater quality control. The key, says Katie Camardo, vice president of operations for Shelburne, VT-based gifts merchant The Vermont Teddy Bear Co., is to start off slow.
“Offer personalization on a few products at first and work the systems through,” Camardo says. “It’s something that consumers like, but don’t bite off more than you can chew. Once you can get an efficient system in place, though, you can maximize turnaround and overdeliver what the customer is expecting.”
Vermont Teddy Bear’s flagship product is handmade stuffed bears that come with personalized outfits. The NASCAR bear, for instance, wears a jumpsuit with the recipient’s name stitched on it; The New Baby Bear has the baby’s name and date of birth embroidered on its bib.
Manchester, VT-based The Orvis Co., for one, started by offering personalization of just a few items before launching its Gifts for Men spin-off catalog in fall 2005. Orvis can now personalize leather cell phone holders, wallets, and backgammon sets with an embossing machine; engrave monograms on watches, knives, and brass luggage tags; and embroider monograms on apparel such as polo shirts, wrinkle-free shirts, and travel vests. It performs the personalization at its Roanoke, VA, distribution center. (See “New book teaches Orvis a personal lesson,” page 92.)
“We see personalization a couple of different ways,” says Ryan Shadrin, communications manager for Orvis, who oversees the personalization strategy. “First there’s the customer service benefit, and we also see it as a way to make special products more special to the consumer.”
Making special products more special requires some specialized skills. After all, not a lot of people in the job market have experience running engraving and embroidery machines.
Instead of waiting to find staffers who already know their way around the equipment, you may have to settle for hiring people who can learn quickly. “It’s almost impossible to find someone with experience using these machines, but occasionally you get an employee who has worked in a printing company or a trophy shop,” Mitchell says. “You hire knowing you need to train people. You need your folks to show up and get the work done because of the turnaround time.”
Vermont Teddy Bear’s Camardo says that training on the personalization machines is simple enough, but you still need to hire people with the specific skill sets. For instance, it helps if the employees in charge of personalizing products are detail oriented, and even the slightest background in the embroidery business is a bonus. “In general, within a week we can get new employees up to speed, but no more than two weeks,” Camardo says.
Your order-takers need special skills as well, Camardo continues, as they are the go-between between the consumer and the personalized product. Accurate typing skills, along with an attention for detail, are a must.
DOING THE TWO-STEP
Once your machines are installed and you have your staff in place, personalization becomes a two-step process, says Larry Maher, vice president of sales and marketing for Mach2K, a Cincinnati-based catalog management software developer.
When taking the order for a personalized product, “you have to capture the information correctly and do exactly what the customer wants, and make sure it’s spelled the right way and in the right font,” Maher says. “You also have to send the customer some sort of electronic feedback to make sure you will be personalizing the order exactly the way the customer wants it. You can e-mail them a proof or make the proof available on your Website.”
Having the customer sign off on the proof helps minimize errors and ensures that the customer has a clear understanding of how the final product will look. For instance, many consumers don’t understand the difference between initialization, in which the letters are presented in “first name, middle name, last name” order, or a monogram, in which the initial of the surname is typically larger than the other initials and placed in the center.
Vermont Teddy Bear is experimenting on its Website by adding additional steps to the online personalization process. With the businesswoman bear, the consumer now has a toggle option for “initials” or “monogram,” and the pick ticket, which stays with the product from order to packing, will indicate which style is correct.
In contrast, Exclusively Weddings takes what it calls a “dinosaur” approach to make sure that Bob and Carol receive their wedding invitations, and not Ted and Alice’s, as well as to cut down on errors. “We’ve passed on some newer technology to make sure we have the order right,” says Mitchell.
At Exclusively Weddings, whoever is taking the order — whether it’s a rep in the contact center or the distribution center worker taking the order off the database — enters the information by hand into the Mach2K ordering system. The person receiving that will hand-enter the order into a second software system, HeNCE (Heterogeneous Network Computer Environment, which creates parallel programs to run on multiple Unix workstations). Then, as part of the reverification process, the proof is sent back to the customer for approval.
Though Mach2K and HeNCE can interact with each other, Mitchell says the humanization of the process — having people hand-enter the information on each system — helps reduce errors. “Two people won’t make the same mistake,” says Mitchell. “We want to find the mistake; we don’t want the customer to find it.”
Still, mistakes do happen, and when they do Vermont Teddy Bear will make it right even if the customer placing the order was at fault.
“If a customer has a problem with the item, we’ll redo it. Most of the time, it’s the person who receives the gift who catches the error, so the gift-giver may never know,” Camardo says. “Generally we pride ourselves in taking care of customer, and that includes a lifetime guarantee for the products.”
But what happens to that $1,500 shearling coat, for example, after the wrong initials are put on it? Both Orvis and Vermont Teddy Bear include erroneously personalized items in their annual tent sales, in hopes of recovering some of the costs.
Orvis has had some luck with reselling erroneously personalized items. “If it’s a common name or group of initials, we might put it aside in first-quality stock,” Shadrin says, “and should someone order that product with that personalization, we’ll pull it and send.”
New book teaches Orvis a personal lesson
Following the October launch of its Gifts for Men spin-off catalog, The Orvis Co. has been in the process of overhauling the way it implements personalization. The company had beefed up its operation because of the additional personalization offerings in the new book, says communications manager Ryan Shadrin, who oversees Orvis’s personalization strategy, and it learned a lot about the process as a result. The most important lesson: The marketing department needs to be on the same page as the people implementing the personalization.
“In the past, the people in [Orvis’s Roanoke, VA, distribution center] didn’t know what items were going to be personalized until they were ordered,” Shadrin says. “We had people from the center up here [at Orvis’s Manchester, VT, headquarters] in March, and we went over what fall items will be personalized, where they can be personalized, and how. We talked about everything from thread colors to fonts and got into the brass tacks of personalization.”
The Gifts for Men catalog included a full-color insert about personalization. Items that could be personalized were indicated with a maroon “P” within the catalog. But as Christmas 2005 drew closer, the marketing team added the maroon “P” to items online that were not called out in the catalog, creating considerable confusion in the distribution center.
George Mollo, president of consultancy GJM Associates, says this does not come as a surprise to him, as that lack of communication seems to be the most common in the industry: “There should be constant communication between the marketing department and the fulfillment center. I’m surprised how many companies don’t know what each hand is doing.” Especially as companies grow, the marketers may not be talking with the merchandisers as much as they should, and both departments need to communicate more with the back-end operation. (For Mollo’s tips on the subject, see “Better operations through communication,” page 94.)