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Should Your Business Customize Its Products?

Kiely Kuligowski
Kiely Kuligowski
Staff Writer
business.com Staff
Updated Jan 23, 2023

As customer data becomes widely available, many companies are customizing products.

Branding and marketing have shifted away from mass-market appeal as today’s customers seek increasingly individualized experiences. The way to earn and keep loyal customers is no longer to create one thing everyone wants; it’s to provide thoughtfully tailored products and services to each individual.

Customers are much more likely to share a customized product – whether it is a bottle of soda with their name on it or vitamins tailored to their specific needs – with their friends or on social media. Even the method of customization has shifted away from such things as monogrammed luggage to products that actually benefit the customer. 

Here’s why your business should consider customizing its products – and how to determine whether or not the technique makes sense for your business.

The push to customize products

Part of the impetus for this new trend, dubbed the “market of one” by Michigan State University, is increased competition. Much of the modern marketplace has become optimized to the point where companies are constantly 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 has an enormous psychological effect in that it 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.

Because personalization has a big impact by making your product stand out and ensuring it holds more meaning for your customer, 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.

What’s the difference between personalization and customization?

While personalization and customization might seem identical at first glance, there are a few fine distinctions between the two.

In the book Future Perfect by Stan Davis, customization is defined as “the process of delivering wide-market goods and services that are modified to satisfy a specific customer need,” while personalization is defined as a marketing strategy that “aims to create personalized or one-to-one communication with a single consumer or consumer segment.”

Think of personalization as receiving a marketing email that uses your name in the salutation, or Amazon suggesting items for you based on your previous purchases. Customization is more like receiving a box of products chosen specifically for you, based on your expressed interests or needs.

FYIFYI: Customization is just one way to beat your competition. Competitive pricing and excellent customer service can also set you apart from your competitors.

What value can personalized or customized products add?

One of the first things you should do when considering personalizing your business is to determine your “why.” Whatever the reason, it should be something that adds value to your business. Your reason could be that it increases customer satisfaction, attracts new customers or offers your business an opportunity to grow. Your “why” should not be forced, because you then run the risk of disrupting your mission and confusing your customers by offering a service that doesn’t make sense for your business.

Customized or personalized products or services should attract new customers, add something that entices existing customers to stay, or collect useful data about your customers that can help you better deliver what they are looking for. A successful customized or personalized product can even add value to your business. 

“[Businesses should customize] as long as the customization represents high value that the customer is willing to pay for,” said Susan Trivers, founder of Trivers Consulting Group. “The company has an extraordinary opportunity to increase profitable revenue at a low risk.”

Examples of product personalization and customization

  • Coca-Cola’s Share a Coke campaign: Coca-Cola made a big splash in the realm of personalization in 2014 with its Share a Coke campaign, which featured bottles with popular names and colloquial sayings to inspire customers to seek out bottles with their own name or the names of loved ones. The popular campaign has returned in several incarnations since then.
  • Care/of’s personalized vitamins: Care/of offers individualized vitamin packets depending on the customer’s needs and goals. For this company, personalization broadens its client base since no one is ever excluded every purchaser can get exactly what they want. To top it all off, each pack features the name of the person they’re curated for. 
  • Spotify Wrapped: When the year’s Spotify Wrapped launches, it typically takes over social media as everyone shares their listening results for the year. Spotify analyzes its user 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. 
  • 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: To meet its customers’ varying needs, 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. 

Do customized products make sense for your business?

The next thing you should do is determine whether or not 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.

While personalization and customization have become popular, a recent study by Bynder found a majority of businesses reported wanting to personalize their marketing, with 54% of respondents confident in their ability to create such experiences. Some of the biggest challenges for personalization and customization were finding the right technology to support it, aligning the message with the proper audience and keeping the process cost-efficient.

Many companies, such as Persona Nutrition and Stitch Fix, use detailed quizzes coupled with data analysis and AI to create custom shipments that fit each customer’s needs. Others use more traditional personalization methods, like printing names or sayings on physical products based on direct customer requests .

If you do choose to try personalization or customization, make sure you know your customers well. The key to successful personalization or customization is having as much data as you can about your audience to make sure your products fulfill your customers’ expectations. Provide plenty of opportunities for customers to contribute information – like surveys, questionnaires and feedback forms – and make sure you have a system to analyze and use that data.

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.

Do you have a strategy in place?

The customization/personalization 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, SEO specialist at Tri Pointe Homes.

It is vital to have a plan for how you will execute your personalization or customization, 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 come away frustrated.

Because most modern customers have limited attention spans and do not want to spend too much time on a quiz or inputting information, make sure your setup – whether it’s a form, quiz or block of information – 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 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 should not be forced. Take the time to carefully consider if and how you should implement customization or personalization.

Additional reporting by Sean Peek.

Image Credit: Antonio Guillem / Shutterstock
Kiely Kuligowski
Kiely Kuligowski
business.com Staff
business.comb.
Kiely Kuligowski is a business.com and Business News Daily writer and has written more than 200 B2B-related articles on topics designed to help small businesses market and grow their companies. Kiely spent hundreds of hours researching, analyzing and writing about the best marketing services for small businesses, including email marketing and text message marketing software. Additionally, Kiely writes on topics that help small business owners and entrepreneurs boost their social media engagement on platforms like Facebook, Twitter and Instagram.