What are the most effective ways to use character customization and progression in role-playing games?

A note about customization. I'm currently playing Starfield and having a really good time. A big psrt of that is the character customization system. I'm a big guy. I'm 6'2, broad shouldered and a person of size. I am very, very used to people in my body shape bracket either being thugs, comic relief or both. Starfield lets you be fat. It makes no comment about that, it doesn't impact on the game at all but the impact it makes on you is massive. I'm playing someone who reads as normal to me. I'm seeing person of size NPCs. I'm seeing world which represents me, a world which sees ME. That makes emotional investment much easier and much deeper. It costs, functionally, nothing. It gives everyone, game team and player alike, everything.

Make the game about the player(s). Let them make real choices with real consequences. Let them have flaws and weaknesses. Don't try to tell a conventional story with your players just being extras. Make them essential to each other's story.

A excellent example would be the final fantasy games its covers all of the customization and progression, it gives players a choice how they can play with what classes and skills to progress in the games.

One of the considerable challenges that RPGs face is keeping the player engaged, keeping them in the magic circle, suspending their reality, and fully immersing in the game world. Player customization can help to pull players out of their world and into the one we built. Players can insert themselves into games with popular fixed characters such as Batman and Mario, but there is always a layer of separation between them and the game. A fully customizable character doesn't exist separately from the player, making them unique in a way that can't be recreated; it makes the actions personal. Progression keeps games moving and engaging; Customization makes them personal.

Storytelling gameplay can change the games world or narrative, the game mechanics can trigger certain events can create interactive contents for future updates, many ways to progress for open world exploration and it makes the game have its choices and quests.

First of all, ideally there should always be a 100% free way on how to earn the customization or reward. Warcraft Rumble as a deck builder is a great example of that - everything can be unlocked with patience. Microtransactions just accelerate it. DC Universe Online is a great example where unlocked designs can be applied to any armor. That way you can maintain a signature look while upgrading the stats of your gear. These designs unlock based on which gear designs you find. In single player, let people experiment more freely because they are not going to make any other players upset. Riftbreaker shows how progression can work freely based on player prioritization depending what they desire to unlock and their current progression.