Bringing Customized Products Into The Customers Home - custom clothing company is model for other small businesses - Brief Article

Nation's Business, May, 1999 by Michael Barrier

A handful of companies specialize in selling custom-made women's clothing to upscale customers in their homes. It's a form of selling that the CEO of one such company believes could become more popular in the years ahead--and not just for clothing.

Karn Koto has run Barbara Koto, a New York City-based company that bears her aunt's name, since her aunt died in 1995. Koto employs around 15 workers, most of whom do tasks such as hand looming and hand knitting.

The sales force consists of 45 independent representatives, almost all of whom initially were customers. Sales reps and customers alike are attracted by word of mouth. "It's very social," Koto says.

Is clothing uniquely suitable for such in-home sales? "I think it would be a wonderful marketing strategy for a variety of different businesses," Koto says, "because it's not necessarily the product you're selling. It's the service: being able to go to somebody, at their convenience, at their home."

Barbara Koto used to ship directly to customers, Koto says, "but we found that created a lot of anxiety because they'd lost that human touch."

The garments now are delivered to the sales reps, who in turn deliver them to the customers, so that if there's a problem, the reps can take care of it immediately.

As Koto says, "There's definitely a cost associated" with such personalized service, and that cost must show in both the product and service, so that the customer is aware of what the money is going for.

"We do these wonderful, very intricate, woven suits," Koto says, "and they look like the price attached to them." That expense is not as visible in other garments, she says, "where you don't necessarily see the work."

Any company that wants to follow a Koto-like model will thus have to find ways to raise what Koto calls the "perceived value" of a good or service.

Customization is no longer exclusively the province of small companies such as Barbara Koto. Already, large manufacturers ranging from the Gateway computer company to the Cannondale bicycle firm are offering customized products through the Internet.

The opportunity for small businesses, Koto suggests, lies in finding ways to extend customization much further, through the kind of individualized service that large companies may not be-able to provide as easily.

"The people who figure it out," Koto says, "will make a ton of money."