Personalization vs Customization: Which Is Right for Your Business?

With the new average attention span of just 47 seconds, you need to go beyond conventional engagement strategies to retain your customers. You need personalization and customization.

While some marketers use the terms personalization and customization interchangeably, there’s a meaningful distinction between them. In this guide, you’ll learn which strategy is right for your business and how to strike the right balance between the two.

But first, let’s get our definitions straight.

What is personalization?

Personalization is the process of tailoring your product or solution to customer preferences. Personalization can be as simple as offering birthday discounts or as complex as adjusting advertising campaigns. The goal of personalization is to streamline the user experience, making customers feel seen and understood.

Examples of personalization

Here’s how big companies go about personalization:

• Amazon displays products based on your past searches.
• The New York Times offers personalized news recommendations.
• Spotify creates personalized playlists.
• Zapier personalizes its email campaigns to better engage customers.
• Veeam chatbots offer personalized customer support.

Levels of personalization

Based on available resources, you can go for one or several levels of personalization:

• Mass personalization: Tailor your product or service to all customers based on your educated guess about their preferences.
• Segment-level personalization: Adjust your offering to different customer segments.
• Individual-level personalization: Tailor your product or service to each customer’s preferences.

4 Ps of personalization

Once you decide on the level of personalization granularity, adjust your marketing mix. Here, you have four options:

• Product personalization: Modify your product to local preferences. This option is usually available only at the low level of granularity—mass personalization.
• Price personalization: Adjust pricing for customer segments offering location-based prices, early-bird prices, student discounts, or senior citizen discounts, among others.
• Promotion personalization: Create personalized marketing campaigns to increase their relevance. For example, tailor email campaigns based on your customers’ browsing or purchasing history. Similarly, personalize recommendations on your website, like Amazon and Netflix do.
• Place personalization: To increase click-through rates, brand loyalty, and purchases, localize your website.

What is customization?

Customization is the practice of allowing customers to tailor a product or service to their preferences. Under this marketing strategy, customers can customize the product’s design, features, and attributes. They can start from a predefined product or even create one from scratch.

Examples of customization

Here’s how market leaders use customization:

• Hewlett-Packard (HP) allows customers to choose computer components.
• BBC encourages customers to customize their newsfeeds.
• HubSpot enables the layout, UI, reports, and other customization options in its CRM solutions.
• Adobe allows users of its graphic tools to customize their toolbars and keyboard shortcuts.
• Shopify offers multiple store customization options including theme, visuals, and font.

Levels of customization

You can give your customer either a high or low level of autonomy over customizing your product or service.

• Full customization: Allow your customers to customize all attributes and aspects of your offerings.
• Partial customization: Let your customer choose product attributes from a set of options. Alternatively, offer them to modify a starting solution.

4 Ps of customization

To increase customer satisfaction and engagement, let them modify the following attributes of your marketing mix:

• Product customization: Encourage your customers to adjust the color, size, and other attributes of your product to their liking.
• Price customization: Offer your customers pay-what-you-want (PWYW) or name-your-own-price (NYOP) models.
• Promotion: Let your customers opt out of newsletters, display ads and other promotional materials.
• Place: Offer multiple options for purchasing your products. Let them shop online, in a traditional store, or via a retailer.

Personalization vs. customization: What’s the difference?

The key difference between a personalized vs customized product fundamentally boils down to who controls the user experience. Personalization is a behind-the-scenes process designed to meet user needs without explicit instructions. Customization, in contrast, empowers users to make conscious decisions about their experience.

The table below further breaks down the

Let’s break down the difference between personalization and customization using a website as an example.

Key reasons to personalize and customize your offerings

Here’s what to expect after implementing personalization and customization:

• Enhanced customer experience: Customization and personalization improves the overall shopping experience and increases consumer satisfaction and repeat purchases.
• Improved market penetration: Personalization and customization help overcome language hurdles and promote a sense of familiarity and connection with the local market.
• Increased customer loyalty and brand perception: Customers feel valued when brands understand their needs and create tailored experiences. This helps customers develop stronger emotional connections with your brand.
• Competitive advantage: By providing personalized experiences, you can stand out from the crowd and strengthen customer connections.

Personalization or customization: What to choose?

If you have sufficient resources, implement both personalization and customization. Do it right, and you’ll reap the benefits detailed above. If, on the other hand, your resources are scarce, base your decision based on the following considerations:

• Privacy considerations: Opt for customization in sensitive industries such as healthcare or finance.
• Nature of products or services: Personalization is more suitable for high-end products.
• Cost implications: Personalization is more cost-effective than customization.
• Competitive landscape: Choose the option that sets you apart from the competition. Ideally, implement both.
• Technological infrastructure: Customization requires extensive technological capabilities.
• Scalability: Thinks whether you will be able to adhere to the chosen strategy at scale.

How to personalize your website

As many as 56 percent of online shoppers would make a repeat purchase after using a personalized website. If you want to capitalize on this opportunity, here’s how to personalize your website:

Step 1: Set clear goals and KPIs

The road to website personalization starts with establishing clear goals and KPIs. To ensure your efforts count, aim for some or all of these personalization goals:

• Increase engagement: Measure user engagement using page views, average time on page, pages per session, and bounce rate.

• Increase customer satisfaction: Set a customer satisfaction index (CSI).

• Increase revenue: Measure average revenue per user and annual recurring revenue.

• Increase customer value: Set a net promoter score (NPS).

Step 2: Segment your audience

Segment your website visitors to create personalized experiences for them. It goes like this:

1. In Google Analytics 4, go to the Reports section
2. In the User section, click Demographic details
3. In the Search bar, choose age, gender, language, etc.

You can go beyond pre-defined user attributes and create your own attributes based on user actions on your website. For example, you can create segments with users who have clicked Purchase or Add to cart. Here’s how it’s done:

1. In the Data display section, click Custom definitions
2. Click Create custom dimensions
3. Enter dimension name, scope, description, and parameter
4. Click Save

Now, carefully examine the audience segments and create personalized content for each segment.

Step 3: Display dynamic content

Use tools like Adobe Target or HubSpot to display dynamic content that changes based on user segments. This could include personalized greetings, featured products, forms, or tailored calls to action (CTA).

Here’s how to implement custom CTAs:

1. In Hubspot, go to the Marketing section
2. In the Lead Capture sub-section, select CTAs
3. Click Create and create a default CTA
4. Click Create smart version and choose user criteria such as device or source of visit
5. Click Save

Step 4: Localize your content

By personalizing CTAs and customer forms, you can substantially increase user engagement with your website. However, your personalization efforts should not end there.

Go further and personalize your content based on the user’s country and preferred language. Put simply, localize your content.

Localization is critical as 87 percent of online customers refuse to make a purchase from unlocalized websites. Here’s how to localize your website using a localization platform Centus:

1. Import your website content to Centus
2. Start translation via DeepL and Google Translate or delegate the process to your translation team
3. Enable automatic quality assurance checks
4. Export translated content