Personalization At Scale: Gen Ai In Creating Customized Products

A recent study showed that 76% of customers expect brands to understand their expectations and needs. This rate calls for brands to embrace solutions that drive the personalization of products at scale. But businesses often have thousands or millions of customers, each with unique preferences. So, how do they achieve personalization at scale? Through Gen AI.

Gen AI services has impacted different areas of product development. One of the aspects where Gen AI has had a significant impact is the ability to create customized products. Customized products are tailored to specific customer needs. This makes them more engaging and relatable to customers, resulting in higher sales. Therefore, personalization is crucial to winning customers' attention, trust, and wallet. But how does Gen AI help in creating customized products? Let's take a deep dive into the details. But before that, let’s start with some basics.

Understanding the Need for Personalization at Scale

As more entrepreneurs emerge, more businesses are being established. This has resulted in increased competition across every sector of operation. Also, distinguishing your products has become more challenging due to the many competitors. As a result, businesses have limited strategies to keep customers loyal to their brand. One strategy that has stood out is the personalization of products, services, and customer experiences at scale.

Personalized or customized products address specific customer preferences and needs. By addressing customer needs through products, brands give customers a reason to do repeat business. Customized products make customers feel part of the business, whereby they're treated as individuals rather than mere statistics.

Here’s a catch. Personalization at scale is a win-win for both customers and brands. While customers treasure tailored experiences, brands enjoy higher sales and increased return on investment (ROI).

Challenges of Traditional Personalization for Brands

• Before the advent of Gen AI, brands struggled to achieve personalization of products at scale. Here are some challenges that faced traditional personalization:
  Poor customer segmentation because niche customer segments weren’t built at a granular level.
• Lack of real-time personalization, which led to missed personalization opportunities.
• Difficulty in organizing disparate data from multiple sources.
• Limited ability to create content, which affected personalization efforts.
• Difficulty in sifting through data assets faster and effectively to discover actionable trends.

To achieve the much-needed personalization at scale, brands needed to analyze vast amounts of data from specific customers to provide tailored experiences. And that’s where Gen AI comes in handy.

Gen AI in Creating Personalized Products

It’s no secret that Generative AI solutions has ushered in a new era of personalization at scale, which is beyond traditional personalization efforts. It has unlocked a new approach to creating customized products: hyper-personalization. Through hyper-personalization, brands build a deep understanding of customer preferences, needs, and behavior for devising custom-made journeys. The outcome? More engaging and stickier customer products.

No doubt, data is the fuel driving this kind of personalization. However, brands also need the right machine learning (ML) and Gen AI tools. These ML and AI algorithms, when trained using vast datasets, can sift through large data volumes, analyze them, and develop real-time contextual interactions.

When customers purchase or browse your app, website, or social media, these AI algorithms incrementally modify behavioral data in real time, depending on every new interaction. This results in smarter product development and marketing efforts across multiple customer segments and channels.

Benefits of Using Gen AI in Developing Customized Products

Gen AI helps create customized products that fit individual customer preferences and needs. Here are some benefits of using this technology in product development:

1. Improved Accuracy

Creating new products can be challenging and risky. Product developers often ask questions like "Will customers consume the new product?” Understanding customers' needs can help ease the tension when it comes to creating a new product. Gen AI is at the core of ensuring developers understand their customers' needs in advance.

For instance, Gen AI models sift through vast customer datasets, enabling product developers to understand customer expectations and possible future actions with better accuracy. This enables them to create customized products that customers would love. Also, this may go a long way to the marketers, where they can recommend products a customer may like with better accuracy.

2. Faster Product Idea Generation

Coming up with a new product idea can be challenging. With many products available, developers may struggle to create a unique product. However, Gen AI can help create a customized yet unique product that meets customer expectations.
For instance, Gen AI models can analyze vast datasets, including customer feedback on social media, competitor products, and market data, to provide insights into possible new product ideas. This accelerates the process of developing new yet customized product ideas.

3. Improved Customer Engagement and Retention

It's no secret that customers love to feel part of the organization. Delivering tailored products makes customers feel engaged in the company’s efforts to provide better experiences. For instance, if customers complain about a specific product feature that is addressed in the new product release, they will feel that their voice is heard by the company. This means they will engage more with the company's products, resulting in higher retention.

4. Increased Business Revenue

As initially stated, tailoring products is a win-win for businesses and customers. Businesses enjoy higher sales from customized products. This, in return, leads to higher business revenue. Besides that, increased customer retention plays a vital role in boosting profits. According to Draup, a 5 percent increase in customer retention can lead to a 25 to 95 percent profit growth.

Final Thoughts

The Gen AI services revolution is here to stay. As far as personalization is concerned, Gen AI plays a critical role in delivering customized products. AI models can analyze vast datasets and identify customer preferences and needs. This information helps developers tailor products to individual needs. Brands and customers benefit from customized products, where businesses enjoy better product accuracy and increased revenue while customers enjoy better products that address their needs. However, several issues must be addressed when it comes to using Gen AI to create customized products. These include ethical concerns, privacy vs. personalization, and potential biases in training data. Addressing these concerns will ensure the responsible and optimal use of Gen AI to create personalized products at scale.