A re-examination of service standardization versus customization from the consumer’s perspective

The purpose of this paper is to investigate the pros and cons of service standardization (vs customization) from the consumer’s perspective, the key factors influencing consumers’ preference for standardized (vs customized) services and the outcomes of service standardization (vs customization).

The authors conducted a qualitative study and two behavioral experiments to test the hypotheses.

The authors find that the advantages of service customization include greater perceived control and higher consumer satisfaction. The drawbacks of service customization include greater perceived risk. These findings also suggest that consumers’ preference for standardized (vs customized) service depends on their consumption goal. Specifically, consumers with a hedonic goal tend to prefer customized services, while those with a utilitarian goal tend to prefer standardized services. These effects are moderated by their need for uniqueness.

The qualitative and experimental studies in this research reveal the antecedents (utilitarian vs hedonic goal) on consumer preference for service standardization versus customization, as well as the consequences in terms of perceived risk, consumer satisfaction and perceived control. The experimental studies were conducted with Chinese and American consumers, respectively, which lend credence to the robustness of the findings.

Results of the present research provide new insights into service standardization versus customization and have significant practical implications. In particular, service organizations should consider designing the appropriate service mode based on consumers’ characteristics, particularly their consumption goals and their need for uniqueness. If the customers focus on efficiency and functionality, the organization should try to provide standardized services. In contrast, for customers who are seeking fun and a novel experience, the service firm should try to tailor to their hedonic needs.

While previous research identifies “heterogeneity” as a key characteristic of services in general, the present findings qualify this received wisdom. In particular, the authors show that consumers’ preference for service standardization versus customization is a function of their consumption goal and need for uniqueness. Thus, the present findings refine the current understanding of service heterogeneity, which makes a significant contribution to the services marketing literature.