Personalization vs Customization: When & How

Although both approach the end-user from different angles, you can combine them together into your customer engagement strategy to create a satisfied customer.

Businesses are always looking for ways to grab the customer’s attention, especially in an era of digital information overload. This need to satisfy customers has given rise to new approaches that aim to improve the customers’ experience: personalization vs customization.

by Benedict Clark

But do they actually mean the same thing? Or are they two entirely different concepts that need to be treated separately?

Let’s take a look at how these two terms differ from each other and how to use them properly:

What’s the difference between personalization and customization?

The difference between personalization and customization depends on who is inputting the data or making the changes. Personalization is the action of creating or modifying an item using customer data to meet an individual’s needs. Customization is when the customer manually makes changes to the item to meet their needs or requirements.

The differences of personalization vs customization.

Although seemingly similar at surface level, one particularly important difference to note here is that of implicit and explicit focus. Implicit means implied, so a company can modify the item without the customer expressing they want a change made. Explicit means something that is stated directly by the customer, such as a change to their item.

Personalization is implicit: takes place without actively asking users for their preferences. In other words, the company (or more likely their data and algorithm) controls and modifies the experience on the user’s behalf.

Customization is explicit: controlled by the user themselves and therefore explicit. Users are actively asked to make choices to tailor the experience to their own preferences.

Although both approach the end-user from different angles, you can combine them together into your customer engagement strategy to create a satisfied customer.

Personalization vs customization in action

Digital technology has helped to stretch the limits of what personalization can do. Despite issues around the transparency of data used, 83 percent of consumers are willing to share their data to create a more personalized experience.

And, with more agile tech and sophisticated manufacturing techniques, customization has become far more accessible too.

Here’s how businesses implement personalization:

  • Marketing emails: simply replacing generic “Hey Valued Customer” with “Hi Kevin” goes a long way to establish and improve customer relationships.
  • Recommendations: giving suggestions of products or services to a user’s interests based on their settings, preferences, or history.
  • Customer service: personalization in customer service is actually extremely important as it shows the end-user that you know who they are, aware of their problems, and are here to help them…personally.

Here’s how businesses offer customization:

  • Software: most SaaS companies provide their customers with the ability to choose their own plans or alter an existing to meet their needs affecting the price or usage of the application.
  • Products: customers are able to modify the shape, color, layout, or design of a product to make it feel like theirs and create something nobody else has.
  • Advertising: users may also be explicitly asked what sort of advertising they want to be exposed to. Facebook and Google, both offer the user options to determine the type of advertising content they’re served.

Examples of personalization vs customization

You don’t have to search far to find companies trying their hand at customization or personalization. But to find them doing it well, you need to dig a little deeper.

Here are a few examples of businesses that have boosted customer experience by nailing their personalization and customization tactics.

Example of personalization: Spotify

Spotify has a formidable reputation for their personalization game. Their personalized curated song lists have been a big hit with their users. The users’ home page contains sections based on their recent listening or more content you’d like.

Spotify personalizes the user’s home page based on songs they’ve listened to.

This makes Spotify feel like the customers’ personal music streaming service, even though it’s been downloaded by millions of others. This personalized feature not only improves the user experience, but it opens up the discovery of new content that is relevant to them.

Example of customization: Nike ID

Nike are a long-established heavy hitter in the world of retailers, and have also made big waves with their flagship experience store. They took mass customization to the next level with NikeID, offering consumers the chance to customize products and make them unique..

Nike ID is a customization tool where users can modify existing products to create unique versions of their own.

Although the price goes up significantly compared to the standard versions of the sneakers, the customer’s get a chance to create a pair exactly how they want. This feature is highly used and a staple within the Nike brand by simply allowing customers to change what they want about an existing product.

Personalize or customize for the customer

The last thing that modern customers want is to feel like a dollar sign. So whatever type of business you’re in, providing personalization or customization enhances the customer experience.

Not only will your customers see that you really do care, but you’ll reap the benefits in revenue and loyalty as well.

Do you prefer personalization or customization? Or maybe you do both. Either way let us know in the comments section below.

Benedict ClarkBenedict Clark  is a psychologist and writer, having previously spent 8 years in the digital marketing industry. With a master’s degree in Business and Occupational Psychology from Kingston University, he writes about the interplay between customer experience and psychology for Acquire.

This article originally appeared on Acquire. Photo by Artem Bryzgalov on Unsplash.

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