The Power of Personalized Recommendations

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Customer Engagement
Customer Experience
Personalized recommendations increase conversions by helping customers decide what products to purchase.

Choice is great, but sometimes it can also be overwhelming. And since customers want to make the right choice before spending their hard-earned cash, they often seek advice.

In an increasingly online world, customers have even more choices. Not only is it easy to switch from one online retailer to another to find what you're looking for, but e-commerce sites are providing even more choices.
Amazon, for example, allows you to buy anything from furniture to light bulbs. But the online retailer is savvy with its customer data and regularly makes recommendations, helping its clients narrow down items that interest them. A few days ago I was looking for a waterproof digital camera. When I logged onto my Amazon account the following, there were several such cameras displayed, reminding me of my recent interest and making it easy for me to look at different products at a glance. Amazon went one step further by sending me an email stating that one of the cameras I had looked at was on sale. While I haven't purchased the camera, I appreciate Amazon's proactive approach.

Maingate, which operates sites selling licensed apparel and memorabilia for various brands, ranging from football teams to charities and foundations, is taking a similar approach to help its customers narrow down their search and find the products that are most relevant to them. Kyle Wasson, the organization's director of ecommerce, said Maingate wanted to reduce the effort customers were putting in to find products related to their search.

Wasson said the company was using analytics to make recommendations based on purchase history. But this strategy had some limitations since recommendations were based on keywords used rather than the customer's behavior and wasn't allowing Maingate to offer the indepth recommendations it wished across different product categories.

In order to overcome this hurdle, the organization joined forces with iGoDigital to start getting a deeper picture of its customers, and include past purchases, abandoned cart items, page views in similar sessions, and items in similar categories among recommended products. Additionally, the organization can highlight items that are relevant to specific occasions, for example a particular holiday that's coming up.

Wasson said this strategy has worked well for the different brands and personalized recommendations enjoy a 20 percent conversion rate--40 percent more than non-personalized recommendations.

These results are perhaps not surprising. Customers are more likely to click on items they feel are relevant to them and then go on to buy them. Organizations that are making timely and personalized recommendations increase their chance of spiking the interest of customers and leading to a purchase.

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EXPERT OPINION