Personalization: A competitive advantage!

By – Aastha Garg

Increasing demand for individualized experiences over traditional isolated products and services has increased the role of individualization in the economy at micro and macro levels.

Personalization is a deep human advantage in this era of artificial intelligence and robotics. It allows businesses to differentiate themselves from robots and AI-based business models.

Mass production is common in the industry since it provides economies of scale that allow for low-cost production, but is there a long-term benefit to businesses with the same approach? My guess is no.

Customer Retention is vital for every business. An increase of 5% in customer retention can increase profits by 25% to 95%. In general, a positive customer experience is vital to a business’s success: it yields 20 % higher customer satisfaction, a 10 to 15 % boost in sales conversion rates, and an increase of 20 to 30 % in employee engagement.

As the customer’s needs are constantly changing in the dynamic business environment, they will be more likely to want products and services that are customized to match their needs and that they might not have otherwise thought of. For example, A mother will always appreciate a hand-drawn card from her child that is asymmetrical and has spelling mistakes versus a properly designed branded card of any gift shop.

People often confuse Personalization and Individualization, but there is a thin line of difference that makes them different when applied in practice. Personal efforts, however, won’t make a customer happy like a birthday SMS from a bank because he knows it’s automatic and sent to every customer of that bank, but a call from a Customer Relationship Employee may make him feel special and connected to his bank. It is the efforts of a business towards its stakeholders that makes Individualization meaningful, even the tiniest effort might make a customer feel special. For example, a Starbucks customer’s name on a coffee cup gives him a sense of belonging to the brand and makes him feel distinct.

It appears that customers are getting more and more accustomed to interacting with machines and bots these days, and businesses are using individualization to establish and maintain relationships with their customers, thus shifting from product-based marketing to people-based marketing and improving their business to customer (B2C) relationships.

A tailored product is one in which the customer provides detailed information about his needs, which is then processed and a product or service is created to meet those needs. It is a time-consuming and costly affair, but prior knowledge of the preferences and income levels of the targeted demographic can be used to provide customers with personalized products, creating a win-win situation for both businesses and customers.

According to an article by MIT Agelab, the new ‘generation gap’ gives birth to expectations. When compared with their parents, the next generation of older adults wants to live longer and live better. It is this innovation gap that is a call to innovate. It is also a new opportunity for businesses to provide customized experiences for their valued customers in a mass production environment and to obtain an advantage over their competitors.

Richard Branson was right when he said that the way you treat your employees is the way they will treat your customers. Because of this, employee satisfaction is crucial to a successful business, because it’s the human resource that can mean the difference between your success and failure.

As a traditional business practice, mass production of standardized products has been relied upon to ensure productivity, but individualization provides employees with a sense of ownership towards the organization since customizing a product to meet a customer’s needs is a much more thought-provoking and innovative process.  As a result, employee morale and satisfaction are high.

Even though individualization has a lot of benefits, it is not without challenges. Data is essential for providing a personalized product or service, and very specific data about potential customers and current ones is essential to ascertain their exact needs and analyse how they are changing with time, but acquiring this data is a difficult task. In a world of informed and vigilant consumers, gathering data about people’s preferences is not an easy process. Credibility is a time-consuming process and can only be achieved through value service, ethical marketing, incentives-based surveys, etc. Yet, it is just a challenge and cannot be deemed a deterrent, making individualization less evocative in the future. Expert systems include AI-based tools that can be assigned the task of data acquisition and processing. These systems are then able to tailor-make a unique customer experience tailored to their needs.

Individualization also poses a problem when it is unwarrantedly applied. Providing personalized products and services to a large number of customers requires a lot of resources and aligned efforts. An application of the same in a business is a very subtle process. Only the level of complexity that can be easily managed must be engaged, otherwise, customization based on individual needs might disrupt core business activities and pose a threat to the business’s survival. To meet this challenge, product families instead of individual products should be mapped to customer needs, and the customer may choose any product family of his choice from a variety of families that cover the scattered needs of different customers.

Despite some challenges, individualization has proven its feasibility to be profitable in the long run. With the impending computerized world, the need for immaculate human experience will be enormous. Therefore, individualization will prove to be the last resort and only human advantage that will allow businesses in the same industry to differentiate themselves.


  1. Harvard Business School Working Knowledge Economics of e- loyalty
  2. Article Demography: The Certain Future by Bryce Quillin, The Head of Global Economics at Pfizer
  3. The article Why Isn’t Business Preparing More for the Future of Aging? MIT AGELAB (
  4. A study by Research Gate: Experimental evidence for the effects of task repetitiveness on the mental strain and objective work performance
  5. The Times of India

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