The Tailor-Made Value Strategy
Customize the fit while keeping price comparable to standardized alternatives.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 97%
The Tailor-Made Value Strategy combines narrow specialization with individual product design. First, the provider selects customers it understands deeply. It then investigates how each customer's economics, operating preferences, or constraints differ from standard assumptions and builds the offer around those differences instead of forcing the customer into a preset matrix. Commerce West applies this to loans and deposits, adjusting structures for the way a privately held company actually manages inventory, cash, or account tiers. The crucial pricing rule is to remain comparable with mass-market competitors rather than charging a luxury premium for every customization. That moves the buying decision away from price and toward fit. Because the finished solution works like a tailored suit and a direct substitute may not exist elsewhere, customization also produces retention without relying on contractual lock-in.
Origin
Commerce West built its business-banking model around customized loans and deposits. Tjan described creating a nine-tier money-market account for one client and tailoring commercial credit without relying on standard FICO boxes or matrices.
Core principles
- 01Privately held companies operate differently even when standard ratios make them look similar.
- 02True customization adapts the product rather than merely selecting the nearest standard box.
- 03Matching market pricing lets fit, not a discount, carry the value proposition.
- 04A solution that cannot be easily replaced creates natural retention.
How to run it
- 1
Select a knowable niche
Focus on a customer group whose businesses and recurring variations the team can understand in depth.
Pro tip Customization becomes scalable when variations repeat inside a narrow market.
- 2
Diagnose the operating reality
Study how the customer's inventory, cash flow, balance sheet, preferences, or workflow differs from the standard model.
Watch out Do not mistake choosing from a preset menu for genuine tailoring.
- 3
Build around the difference
Change the structure of the core product and relevant supporting services so they fit the customer's actual operation.
Pro tip Give the customized configuration a clear identity inside your system so it can be delivered consistently.
- 4
Neutralize the price objection
Keep pricing in line with credible standardized alternatives so customers compare fit rather than dismissing the offer as a luxury.
Watch out Customization that destroys unit economics is not a sustainable advantage.
- 5
Deliver irreplaceable fit
Make the result materially better suited to the customer than an off-the-shelf alternative, creating a reason to stay.
Pro tip Retention should come from usefulness, not artificial switching barriers.
In the wild
A Commerce West client asked for nine tiers because nine was the owner's lucky number. The bank created a named account in its system with nine different APR and APY tiers rather than directing the client to the closest standard product.
→ The customer received a deposit product that other banks had never offered in roughly 40 years of banking experience.
Commerce West evaluates how each privately held company manages inventory and how that affects its financial statements. Instead of using a single FICO-driven matrix, the bank structures the loan around the individual business while keeping pricing comparable with larger banks.
→ The borrower receives a better-fitting product without making price the main competitive issue.
Common mistakes
Calling product matching customization
Selecting the nearest standard option still leaves the customer inside the provider's existing box.
Using discounting as the differentiator
Tjan's model competes on tailored fit while keeping pricing comparable, rather than buying volume through lower prices.
Customizing customers you do not understand
Without deep niche knowledge, bespoke structures can create complexity and risk instead of value.
Is it for you?
Best for
Specialist service firms that understand a narrow market well enough to customize delivery efficiently.
Not ideal for
High-volume commodity services where customization costs more than customers value or introduces unacceptable risk.
From the transcript
“we customize and tailor make loan now think about that Joe so every loan is tailor made like a suit”
“the difference is it's going to be tailored made to you”
“it's not about the volume it's about the quality”
From the episode
Banking on Innovation ft. Ivo A. Tjan
Ivo A. Tjan