How Product Customization Increases Your Conversion Rate and Sales

Updated 1 month ago
Lindsay Vine
March 10, 2021
4 min read

Product customization isn’t a new concept, but neither is it still reserved for luxury brands or specialty shops.

In the 2020s, more brands are responding to the clamor for customized products. According to Deloitte, some 36 percent of consumers have expressed an interest in customized and personalized goods or services. That number is expected to continue to grow as customized products become the norm. 

Does your brand offer product customization or personalization? If not, it should. New technologies have made it more accessible than ever before. 

But the rise of customization isn’t a fad.

That’s because much of it is driven not by marketing tactics or technology, but rather plain old psychology.

Read on to take a deep dive into consumer psychology. Here are four science-based reasons why product customization increases conversion rates and sales.

4 Science-Based Reasons Why Product Customization Increases Conversion

It’s well-known that personalization works in marketing generally, and research shows that product customization and personalization increase sales by 22 to 30 percent.

But why? What drives our cravings for unique things created exactly for us?

As it turns out, product customization leverages several psychological phenomena that have been well studied.

Here’s a rundown of the four major reasons why we find customized products so compelling.

1. Active Engagement Makes Your Customers Co-Creators of Value

What’s so compelling about a picture of a product with a button next to it that exclaims, “BUY NOW”?

Unfortunately, not much.

Now imagine sitting down with a configurator and toying with the toggles while your imagination plays with each possibility.

That sounds much more fun, doesn’t it?

That’s because product customization fundamentally changes the relationship between customers and a brand. Specifically, it removes the focus on the actual transaction and emphasizes the connection between the customer and the product.

Suddenly, you aren’t buying a product. You’re designing one that reflects your individual needs and tastes. 

By extension, you’re not a customer buying from the brand. You’re a creator who has partnered with the brand to bring something new into the world.

This is called active engagement. It’s the same concept that explains why students retain knowledge better with hands-on learning, and why employees perform better when their work is redefined in terms of relationships.

In short, when we’re fully engaged in an experience, we’re more likely to not just enjoy what we’re doing, but also see it through to the end.

This brings us to another interesting psychological phenomenon…

2. Creating Things Inspires Emotional Attachment

Western society has long operated under the notion that if we’ve created something, then we own it. Locke identified this as the labor theory of property, but the roots for this phenomenon are actually emotional. 

When we’ve invested time and energy into a process, we feel entitled to the creation in ways that others are not. It’s like we’ve “paid” for the final result in a way. (This is called psychological ownership, the idea that we own something whether or not we do legally.)

This is actually part of a cognitive bias that causes us to place increased value on things that we at least partially helped to create. In recent years, this has been dubbed the IKEA effect. It’s been observed in everything from putting together IKEA furniture to designing customized products.

According to one study, the more that people invest emotionally in product configuration, the more likely they are to form an emotional attachment with the product. In turn, the more likely they are to buy it in the end.

And when people aren’t satisfied with a customized product at the end?

Research shows it’s usually because they weren’t offered enough options, to begin with.

3. Customized Products Fulfil Self-Expression Needs

The study above also revealed an important clue as to what drives emotional attachment. Product customization inherently invites customers to build a product that expresses values or an identity.

The expressions of individuality, cultural identities, and social in-groups represent the three main motivations that drive consumer behavior. By allowing people to customize a product, you’re effectively opening the door to let them stamp these expressions on your brand.

That’s powerful, but not just because we’re steeped in a culture that values individual expression.

Here’s a study showing that products customized with self-expression in mind can cause people to perform better on tasks that involve the product’s use. Such products function like a physical affirmation, leading to increased confidence and a sense of competence.

Just imagine what this means for baseball players that design their own Franklin Sports batting gloves!

4. The Endowment Effect Means We Will Value the Final Product

By now, we’ve hopefully hammered home just how much of an emotional process shopping is – with product customization being even more so. However, there’s one last emotional bias at play that might help explain why customers tend to be more satisfied with custom products overall.

It’s called the Endowment Effect. This bias states that we tend to value an owned object more greatly than market value – simply because we own it.

And that one-of-a-kind product from our favorite brand is a prime target for inspiring that overvaluing. 

The Bottom Line: Attract Creators, Not Customers

Between the sense of psychological ownership from the interactivity, the emotional attachment from the creation process, and the self-expression that’s all wrapped up in it … we can now see why customized and personalized products are so utterly compelling to us.

There’s real psychological power behind product customization and many of today’s most successful brands are discovering this fact.

We’ve covered four key psychological effects that occur whenever customers are invited to customize a product. From these, we can surmise a few takeaways to put into action:

  • Provide as many options as possible. Nurture that emotional attachment by giving your customers space to play.
  • Emphasize self-expression. By doing so, you’ll help people create a whole host of positive associations with your products.
  • Serve up stunning visualizations. Amp up the anticipation by showcasing your products with photorealistic and interactive 3D imagery

A solid product configuration software can help you do that. Fortunately, we’ve got you covered. Schedule a demo now and see how product customization can turn customers into raving fans.

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