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Should Your Business Customize Its Products?

As customer data becomes widely available, many companies offer customized products.

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Written by: Jamie Johnson, Senior AnalystUpdated Aug 27, 2024
Chad Brooks,Managing Editor
Business.com earns commissions from some listed providers. Editorial Guidelines.
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Many customers are moving away from one-size-fits-all products and choosing companies that offer customized experiences. This could be a bottle of soda with your name on it or vitamins packaged specifically to meet your health needs.

When done effectively, customized products can be a great way to earn and keep loyal customers and increase business revenue. Learning more about customized products will help you determine whether they’re the right fit for your business. 

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. 

Bottom LineBottom line
Customization is one way to beat your competition, but competitive pricing and excellent customer service will also help you stand out from your competitors.

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. 

TipBottom line
Product customization can have a positive environmental impact. Since orders aren’t being mass-produced, this can reduce waste and help you implement sustainable business practices.

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. 
Did You Know?Did you know
Choosing the right materials for your product is crucial to your business's success. Run product samples and test regularly to help ensure that you're using the perfect materials.

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.

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Written by: Jamie Johnson, Senior Analyst
Jamie Johnson has spent more than five years providing invaluable financial guidance to business owners, leading them through the financial intricacies of entrepreneurship. From offering investment lessons to recommending funding options, business loans and insurance, Johnson distills complex financial matters into easily understandable and actionable advice, empowering entrepreneurs to make informed decisions for their companies. As a business owner herself, she continually tests and refines her business strategies and services. At business.com, Johnson covers accounting practices, budgeting, loan forgiveness and more. Johnson's expertise is also evident in her contributions to various finance publications, including Rocket Mortgage, InvestorPlace, Insurify and Credit Karma. Moreover, she has showcased her command of other B2B topics, ranging from sales and payroll to marketing and social media, with insights featured in esteemed outlets such as the U.S. Chamber of Commerce, CNN, USA Today, U.S. News & World Report and Business Insider.
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