Product customisation – the way to gain competitive advantage
Looking for a way to stand out from your competitors? Customise your products.
13:00 25 April 2022
Product customisation isn’t a new phenomenon, but it is becoming increasingly popular as brands attempt to stand out in a crowded marketplace. Today, ecommerce websites will adapt their recommendations based on what you have bought before, and streaming services like Netflix will tailor your options to what you have watched before.
Brands are getting in on the act too, people can increasingly customise the products they buy to their liking. Nike allow you to personalise your trainers, Louise Vuitton will monogram your luggage, and many smaller companies have started up online offering customised products.
Customised products add value to a customer, and they are willing to pay more for the privilege. A study by Deloitte found that, on average, 36% of consumers would consider buying customised products or services. And 1 in 5 of these consumers are prepared to pay 20% more for a personalised product.
For some time consumers have been able to customise certain purchases, for instance in new cars you can choose the colour, the interior trim and from a variety of other options. However the mass personalisation of products has been viewed as too costly to manufacture, and been limited to a few niche gift suppliers online. But with the likes of Nike now offering full personalisation, others are sure to follow.
Advantages of customisation
- It increases sales
People like to own personalised items, it gives them something unique to show off. They are also likely to pay more for a customised product, increasing your profit margin. Yes it might cost more to customise products than to mass produce them in one colour and size, but if it increases sales and profit margins it may be worth it.
- It enables you to stand out from the competition
Offering products and services that enhance customer experience and differ from your competitors will give you the edge. If you make phone cases, for instance, and you offer customised options like adding a customer’s initials for £1 more and your competitor just offers plain cases, customers are likely to choose your product even though you charge more.
- Improved customer loyalty
When a customer feels like they have something unique from you it is likely to foster a sense of loyalty to you. They have been able to get exactly what they want, so their satisfaction levels will be much higher than if they bought a mass-produced item. This increased satisfaction means they are more likely to buy from you again. They will also be more likely to recommend you to friends and family, giving you word-of-mouth marketing which is invaluable.
- Enhanced sense of value
We value things more highly if we have created them and they are unique to us. This is called the Endowment Effect. It is a psychological bias that means that we value items more simply because we created them.
- Better customer insight
Allowing customers to choose the options they desire will give us a better understanding of their wants and needs which can be used to improve our marketing and customer service. Gathering customer data will give you tools to gain an edge over your competitors. Using CRM and data analytics you can gather personal information about your customers in a way a competitor offering no customisation cannot. You can use this data to improve your offering.
Examples of product customisation
- Housebuilders – buyers of new homes are able to choose between options for kitchens and sometimes bathrooms. They can choose the colour of units and worktops and choose from different handles and taps.
- Furniture – some furniture makers allow for customised options in the style of sofa or chair, the colour and the shape.
- Cars – the buyers of new cars can now not only choose the colour of the paint and the internal trim, but from a variety of customised features including cruise control, air conditioning, sat nav, Bluetooth, automatic boot and more.
- Tailors – customers can choose from a variety of different materials and styles when they have a suit made.
- Toys – some shops like ‘Build-a-Bear’ allow children to customise cuddly toys and charge a premium for them. These popular toys have a variety of colours and types, and are accessorised with different items.
- Streaming services – these tailor their suggestions to you based on programmes you have watched and music you have listened to, to personalise their service.
- Photo gifts – several online retailers offer personalised gifts using customer photos. These can be photo books, key rings, prints, t-shirts, cushions and more.
- Exhibition stands – companies like Quadrant2Design offer stands that are fully customised to the buyer’s needs. They are tailored to the needs of the business to truly reflect the brand. They also have an e-commerce website where buyers can customise the stand and see the prices by adding or removing stand features, so transparency in the product and service becomes key.
Product customisation is becoming increasingly popular, and is increasingly demanded by consumers. Although it may be a little more expensive to produce customised products, research and evidence shows that consumers are willing to pay for unique or exclusive products. There are many benefits to product customisation including increased revenue, brand loyalty and enhanced perception of value. Predominantly, customisation will enable you to stand out from your competitors, giving you a competitive edge.