Customization vs Personalization — What’s the Difference?

Should you customize or personalize?

Ever since the rise of mass-market products and services, consumers have wanted to make their experiences different to everybody else’s. We all like to be unique and to have our creature comforts met. From choosing the toppings on our salad or sandwich, to buying a new jacket in black, gray, or navy, or setting the AC in the car to the perfect temperature, we enjoy customizing our experiences in order to best suit our tastes.

Customization is what happens when the end user tailors their choices to suit their preferences. Companies facilitate customization by providing a range of options, but it’s down to us to initiate the changes we want to see. Customization thus relies on the end user making the changes, something that people are surprisingly resistant to doing. Research shows that less than 5 percent of users stray from default settings on the products and services they purchase. Consumers are far more likely to walk away from a product, assuming it doesn’t suit them, than customize it to their satisfaction.

Personalization resolves this problem by learning the choices we are likely to make, and then making them for us. It’s the difference between choosing a movie from a large library, and watching the next show Netflix recommends based on your viewing history.

Consumer behavior can often be predicted by understanding demographics such as age, gender, education, and location. Personalization starts with understanding these segments and using them to generate the most relevant content or experience based on how the majority will respond. For instance a fashion newsletter might send a mailer about a new line of swimwear to 20–30 year old women, and a different email about silk ties to men aged 50–60.

The difference between customization and personalization lies with who is making the changes. Users customize products or services to fit their own needs. Personalization is achieved through an aggregate of customer data and the use of predictive technology.

While segmenting seems to rely on cliches, it can become extremely detailed, taking into account a customer’s political and ethical stances, previous browsing and purchasing history, product reviews, and more, in order to finely tune the results it provides.

Machine learning takes personalization to the next level by using algorithms to track data from multiple sources in order to provide even more nuanced results. An algorithm might start with the kind of customer information that segmenting provides, and cross reference it against current events, trending products, fashion and technology innovations, and more. Rule-based segmentation might understand that you’re most likely to be interested in the latest line of swimwear, but machine learning algorithms can usually identify the cut and color swimsuit you’d choose to purchase.

Personalization provides a better customer experience because it doesn’t rely on customers to do the work of tailoring the product or service to suit them.

Numerous industries are using personalization in order to provide better customer experiences. Online streaming services like Netflix and Spotify, retail (Amazon’s personalized homepage and newsletters), and social media are all increasingly relying on algorithms to personalize content for each individual user. Offline, too, personalization is starting to gain traction. Stores are printing personalized recommendations on receipts, or using QR codes to lead customers to discounts or similar products to those they’re viewing at that moment.

Manufacturing, however, has been behind the curve when it comes to personalization. Although mass-market customizations, such as custom Nike Air Max shoes and Burberry Bespoke designer coats, have begun to catch on, true personalization has yet to be realized. Yet personalization has lots of advantages that it can offer to industries such as cosmetics and personal care. Why use hundreds of SKUs for products designed to treat every skin and hair type and ailment, when just one product can be universally personalized to suit every individual?

Personalization is good for people, but it’s also good for the environment. Manufacturing processes can be streamlined into a single product, meaning less waste and a reduced carbon footprint. With personalized products, we can improve customer experience while contributing to maintaining a healthier planet.

At Qyral, we’re taking offline personalization to the next level by using smart algorithms to adjust the ingredients in all our skincare products to suit each individual user. We’re envisioning an end to trial-and-error customization of dozens of different products in favor of a simple, reliable skincare routine that’s designed to meet the unique needs of every individual’s skin. Find out more at Qyral.com.