Should Your Business Customize Its Products?

What are customized products?

A customized product has been changed to meet a customer’s specific needs and preferences. Instead of offering standard off-the-shelf items, you give customers the ability to make the purchase unique to them. 

For example, you can buy a regular Ralph Lauren polo, or you can customize your order by adding a monogram, custom embroidery or text on the sleeve. Nike By You, for instance, allows customers to choose the colors and images for their favorite Nike shoes. 

What’s the difference between personalization and customization?

While personalization and customization may seem like the same thing, there are a few fine distinctions between the two. Personalization involves using customer data to create an experience that feels unique to each customer. In comparison, customization allows customers to make changes to the item based on their preferences. 

Receiving a promotional email using your name in the subject line is an example of personalization. When Amazon suggests items for you based on your purchase history, that’s also personalization. Buying a phone case that you designed yourself would be an example of customization. 

Examples of product personalization and customization

• Coca-Cola’s Share a Coke campaign: Coca-Cola made a splash in 2014 with its Share a Coke campaign. It featured bottles with popular names to inspire customers to seek out bottles with their own name or the names of loved ones.
• Gainful: Gainful offers customized greens, protein powder, hydration packs and preworkout. You’ll start by taking a five-minute quiz to help the company understand your goals and dietary needs. Once you’re finished, you’ll receive your supplement recommendations.  
• Spotify Wrapped: With Spotify Wrapped, Spotify analyzes each user’s data and presents it in a well-designed, engaging slideshow that ranks each user’s listening habits. Users can learn what artists and podcasts they listened to the most, where they rank among their top artists’ listeners and what subgenres they’ve been enjoying. When Spotify Wrapped comes out at each year’s end, customers flock to social media to share their listening trends. 
• Enfagrow’s personalized advice for babies: Enfagrow, a baby formula company, provides advice and product recommendations based on a baby’s age and development stage. Plus, parents can receive emails that include coupons and special offers. 
• Function of Beauty’s tailored hair products: Function of Beauty creates tailored shampoos, conditioners and body washes based on each person’s preferences and hair type. After completing a short quiz, customers can get exactly what their hair needs. Customers can also choose the scent of their products and list a name on their bottles, making Function of Beauty’s products truly unique. 

What are the benefits of offering customized products?

Offering customized products increases customer satisfaction and attracts new customers to your business. When customers can tailor products to their specific needs, they’ll have a better experience overall. They’ll also be more likely to continue doing business with your company.

Since customized products have a higher perceived value, you’ll be able to charge more for these items. This can lead to increased profit margins and higher revenue. Customized products will also elevate your company’s brand, helping it be seen as more customer-focused and upscale.

Finally, customized products will help you create more data and actionable insights about your customers. This information can help with your future marketing and product development. 

Why are customized products increasingly popular?

Part of the reason for this new trend, dubbed the “market of one” by Michigan State University, is increased competition. Most of the marketplace has become optimized to the point where companies are seeking out new ways to stand out from the crowd. Offering custom products differentiates your business.

“If you don’t customize your product, at the end of the day, there isn’t much that separates you from your competitors,” said Cameron Zoub, co-founder of Whop.

Allowing your customers a hand in creating exactly the product they are looking for adds significant value to the product and the customer’s time. It also creates a personal connection between the customer and the product and, by extension, between the customer and your business.

Personalization also brings you closer to your customers by making your business seem more human and authentic. “Personalization adds a human element to any brand by making it all about the consumer, as opposed to the product,” said Jason Brown, CEO of Persona Nutrition.

Adding a personal touch to your products ensures they hold more meaning for your customer. Given the benefits, you might be tempted to jump in and offer customization right away. But before you make the leap, there are a few things you should consider.

Should your business offer customized products?

The next thing you should do is determine whether customization makes sense for your business. “If it takes substantial resources and distracts from the core business or if it’s not feasible financially, then it may not be beneficial,” said Antonella Pisani, founder and CEO of FACT Goods.

Not all businesses or products lend themselves to personalization or customization as an option. Think about what your business offers and whether that product or service can be tailored to individual customers as well as whether your business has the capacity — both financially and in terms of staff — to support it.

Your business should offer customized products if…

• Your target market values customized products and is asking for them.
• You have the staff, technology and processes to support offering customized products.
• You’re operating in a niche market and looking for ways to differentiate your business.

Your business shouldn’t offer customized products if…

• Your target market values convenience and low costs over customization.
• Your profit margins are thin, and you don’t have the resources to support the endeavor. 
• You can’t guarantee quality control with your customized products. 

Strategies for customizing products

The customization trend is heavily rooted in human psychology. People love to feel special, talk about and identify aspects of themselves and receive products made specifically for them.

“Once a customer [has personalized a product], they’re more likely to see it as a representation of themselves and thus are often more content with the product,” said Michael Anderson, manager of organic search at collystring.

It is vital to have a plan for how you’ll execute this business strategy or else you run the risk of annoying your customers. If they spend too much time filling in information into a quiz or survey without getting the product or service they’re looking for, they might walk away frustrated.

Most customers have limited attention spans and don’t want to spend too much time on a quiz or inputting information. So, make sure your setup takes less than five minutes to complete and that you have access to technology that can accurately and effectively analyze the data.

A combination of human touch and artificial intelligence (AI) is an effective way to make sure you are fulfilling your customers’ expectations. The AI can quickly analyze the data, and you can ensure that the details are correct.

Customization or personalization can bring significant value to your business and add a new level of connection with your customers, but it shouldn’t be forced. Take the time to consider if and how you should implement this strategy in your business.

Kiely Kuligowski and Sean Peek contributed to this article. Source interviews were conducted for a previous version of this article.