Customization vs. Personalization: Two Marketing Approaches for Generation Y
Generation Y: People born between 1980 and 1990 who entered the professional world around the turn of the millennium. Therefore, they are known today as “Millennials”. They replaced Generation X and are not infamous for nothing. They are considered freethinkers who like to overestimate themselves.
Whether you consider the Millennials to be narcissists or a misunderstood generation of the Millennium, you will surely agree: whoever is so special requires special marketing. After all, those born between 1980 and 1990 are now students and workers in the late 20s to 30s, and thus important potential customers for most companies worldwide.
Product customization & marketing personalization
Of all the marketing strategies that have been in place since the very beginning of the Internet, customization and personalization are probably the only strategies Millennials really jump on. We’ll tell you why that is. In advance, a more precise definition:
At first, both terms sound pretty similar. In another context, they can even represent legitimate synonyms. However, in the digital world, they describe two completely different methods. The term “customization” was defined in 1987 by Stand Davis in his book “Future Perfect”. He speaks of “mass customization” and the offer of broad market products and services that can be customized to meet a specific customer requirement. The sports brand Nike, for example, today offers an individual composition of their sports and leisure shoes. Customers can freely choose the colors, patterns, and design in the online shop, creating a tailor-made product to their own personal taste. In short: In contrast to classical mass production, customization allows consumers to create their own unique product according to their individual tastes.
Personalization, on the other hand, is a marketing strategy that actively starts within the company. It aims for a tailor-made, direct customer approach that addresses the individual needs and requirements of individual visitor groups. The concept of digital personalization can be traced back to 1993 when Don Peppers and Martha Rogers worked on the idea of customizing their customer approach in The One to One Future.
If you have ever received an e-mail that uses your first name in the subject line if you have been offered product recommendations on a website or content that was customized to your gender or previous purchases, you have also experienced personalization. The sender tried to send an individualized message only to you with the intention of standing out and attracting your attention. The goal is, of course, to get you to buy his product or service.
Customization — why does it work?
The parallels of both marketing strategies are obvious. Both aim to give the customer the feeling that their individual wishes and interests are understood and valued. Both respect the expression of personal requirements, tastes and experiences. The feeling of having a very special connection to a brand can be evoked by both customization and personalization.
If you take a close look at the definition of Generation Y at the beginning of this article, you can understand why many companies rely exclusively on customization and personalization. However, another important reason for that is that Millenials tend to ignore conventional marketing approaches and in many situations, they are simply too distracted (keyword: information overload). Likewise, traditional marketing does not consider Generation Y’s affinity with the world of social media and its lively interaction with social networks.
What makes customization so effective in e-commerce? It’s quite simple: Anyone who individualizes a product online has spent at least a short amount of time and effort making adjustments. This very personal input binds the user emotionally to the product. Thus, the likelihood that it will actually complete the buying process is significantly higher than in any other e-commerce scenario. Also, the seller has the chance to demand a higher price successfully.
Millennials demand a customer-oriented shopping experience. An experience that makes them feel appreciated and special. Whether in the shop or online — the active interest in the buyer binds customers. The best way to express this is by taking a close look at your customer group — keyword: big data — and making sensible use of all the information collected for a personalized customer approach.
Product customization is determined by the users. With personalization, on the other hand, companies deliberately bring added value to a product or service offering. The provider determines the personalization measure.
By nature, we want to have everything under control. Website personalization is the ideal image for this desire. Are you on a bargain-hunting for kitchen utensils at your favorite supplier? A personalized advertisement that brings together everything you’re looking for — low prices and the right product recommendations at the perfect time — subconsciously creates a sense of control. As if your very individual requirements are magically captured and implemented automatically. Who could say no?
Also in terms of information overload — the problem is omnipresent in today’s marketing — personalization can help. It can limit the number of different ads a user is exposed to, and the targeted messages stand out more by addressing the wishes and interests of the consumer.
While personalization and personalization methods are completely different in their implementation, they both work with the deep-rooted need for self-expression and realization of personal needs — as well as the limited attention span of the millennials. To reach Generation Y in e-commerce, both product customization, as well as website personalization, can be invaluable tools.