Spreadshirt: Quality and NPS are King! Visit at Spreadshirt's Leipzig Headquarters

Last week, just before my departure to HBS where I participate in the 2009 GCPCL, I had the opportunity to spend a full day at Spreadshirt's new German Headquarters and factory in Leipzig. Three colleagues from the Aachen team and I had meetings with Spreadshirt CEO Jana Eggers, Communication Guru Andreas Miles, Company Speaker Eike Sievert and other members of the Spreadshirt team. After a briefing we started our day with a tour through the factory, followed by more than six hours of discussions and talks about the various business aspects. It was great fun and learning.

Spreadshirt went beta in April 2001 as the brainchild of Lukas Gadowski, at this time a student in Leipzig, Germany. Their PR sheet calls "Spreadshirt the "things you wear" answer to the growing desire for personal branding -- letting customers quickly create one-of-a-kind, high-quality, expressive apparel." With t-shirts as the company's specialty, customers can create branded merchandise with a range of around 80 printable items, from sweatshirts and jackets to t-shirts and dog-shirts. Spreadshirt also is owner of La Fraise, the European Threadless clone.

Next to the idea of mass customization, the possibility for users to open their own online shop to sell their creation to others has been part of the business from the start. Spreadhsirt thus is part of the new generation of mass customization companies that not just let consumers design a custom product but also harvest a niche opportunity for a specific design. It was a nice opportunity to contrast Spreadshirt to my visit at Zazzle earlier this spring. More than 500.000 Spreadshirt-powered shops are open for business today.

A great example of how Spreadshirt enables new kind of business ideas is the CNN Headline shirt, one of Spreadshirt's great successes. Since 2008, CNN one-off headline T-shirts. On their homepage, you can click a little mini T-shirt icon next to a headline, and poof, get a T-shirt made with that headline, time-stamp, and CNN logo on it. The initiative has been nominated as one of the Top-3 marketing ideas in 2008, and until today, thousands of different T-shirts have been created, all one of a kind and on demand in one day. But exactly the same infrastructure is also offered to consumers who want to create their own headline store with headlines from their local school paper.

These are my key takeaways about Spreadshirt from my visit:

1. Quality rules. While at my visit at Zazzle everyone talked about their great online technologies, at Spreadshirt everyone was obsessed with quality. Almost every statement started with "Spreadshirt wants to be the quality leader in our segment" et al. Continuous quality in products and printing is a number one objective for Spreadshirt. They even have a sophisticated testing lab to test all possible fabric / color combinations before a new shirt or fabric goes online. While focus of quality sounds like a great statement, though, I am not sure whether customers really always honor superior quality in this product category. Would be worth while a more detailed study!

2. Self expression is a HUGE market. When asked what is the particular product they sell, Jana frequently answers "self expression". And this is a very nice way to look on mass customization (bringing it also in live with Joe Pine's recent thinking on authenticity). Expressing ourselves is an inherent demand of every human being. Offering custom goods in a meaningful way is a great way to tap into this market. But not many companies are positioning their MC offering in such a way.

3. It's all about metrics. Next to quality, the company totally went NPS. The net promoter score is an industry measure to identify customer satisfaction and loyalty. And as enthusiastic customers are the best prerequisite for sustained growth, Spreadshirt has a good reason to confidently look ahead: Spreadshirt's NPS of 42% places it in the top quarter of many famous online firms.

The NPS (http://www.netpromoter.com) is based on the assumption that the customer's willingness to recommend a company to others is directly related to their satisfaction and loyalty. The value of the NPS is determined with the help of one question: "How likely is it that you would recommend company XY to a friend or colleague?" The possible answers range from 0 (unlikely) to 10 (very likely). Enthusiastic customers that decided on 9 or 10 are identified as promoters.  Would be nice to have a study on NPS ov various mass customization companies to compare.

4. Focus on one category. While Zazzle and Cafepress, Spreadshirt's main competitors, have a wide array of products in their assortments, Spreadshirt focuses on apparel (or "things you can wear"). In this category, however, they really have the long tail of products. But talking to their warehouse manager confirmed my old experience: Whenever you give ´plenty of colors to people to choose from, they select while, black, and blue.

5. Mass customization manufacturing is personal. While we were visiting during a slow time of the year (summer vacation period, no special holidays), the factory was quite busy in processing orders. Most orders are fulfilled in a rather complex – and human labor demanding – way by printing the design patterns on foils, cutting these and applying them by hand on the final shirt (and this in a high-wage country like Germany!). Here I was astonished by a young and motivated workforce that did these labor intensive jobs in an apparently joyful way.

6. Digital printing is on its way. Fast. While custom digital printing on different fabrics in large scale has been discussed for ages, the technology finally made a great jump and seems to be ready for scalability.

7. Give it a personal touch. I really liked the idea that Spreadshirt's factory workers have been empowered to provide direct feedback to customers which created a shirt an employee really like. She then can put a "love mark", a small note, into the package expressing her appreciation for the design. To not inflate the love, however, the amount of love marks every employee gets is limited. Nice idea!

8. Bad IP legislation hurts. When moving through the factory and following the order taking process, it became obvious that one of the largest cost drivers is IP protection of designs and phrases. Huge boards in the factory showed examples of "no go" designs and words. It is amazing which simple and easy phrases and terms you can protect at the trademark office, allowing no-one else to use it. Another reason why the world should become more "creative commons".

This issue also addresses the fine line a mass customization company has to go when selling self-expression. When I want to express myself, I am not happy when I cannot use easy symbols like a red star (protected!) or any Olympia related stuff (very much verboten). In some blogs, Spreadshirt is called an "IP Nazi" for turning back too many designs. But with some lawyers making a nice business of ordering shirts with "forbidden" items and then sending a cost note and dissuasion, you better be careful and turn back your customers.

Managing this trade-offs is one of the specific trade-offs a mass customization company has to manage.

9. The market for mass customization still is a tiny niche, but growing rapidly. Confirming the research we recently finalized for our SERVIVE project (an EU funded project on mass customization or apparel), the Spreadshirters confirmed our assumption that customized products are still addressing a very small fraction of the market only. The core task today is to educate the market, not so much surprising it with ever new offerings. Most consumers just have never heard about the opportunity that there is something else then ready-made stuff on the shelves. Sounds strange to you when you are reading this blog and this lengthy posting until here, but these people exist. And they are the majority!

10. It is FUN to work for a mass customization T-Shirt company. Almost as much fun as working for a nice university. Young people, no ties or suits, plenty of room for exploration, and producing creative intellectual outcomes.

Comments

[GlobeCorp.biz]

Dell, for instance, allow people to choose the design of the back of their laptop. Though, they don't let people print their own picture or drawing to really cutomize the device, like Spreadshirt does.
I look forward to see, in the future, car manufacturers have a true online customization service. Sure, the time will come. Just when ?

[Jana Eggers]

1 and 10 are my favorites. Thanks for giving us a taste of what we look like from the outside in.

Re: 2, self expression includes wearing brands or logos that show who you are. You mention this preference in your post on open innovation and brands: http://tr.im/vpz6. That 33% of people that prefer to have the ODS logo are the same folks buying from our Shop Partners... those partners who are there for a community.

Jana Eggers
CEO, Spreadshirt