A recommendation system or recommendation engine uses different algorithms to filter various data related to the user preferences, products, and others, and recommends the most relevant products and services to the users. Nowadays, almost all the leading online businesses use recommendation engines to keep the user engagement rate high and improve the user experience. One of the most common use cases of recommendation engines is in online stores, where it does the job of recommending the most appropriate product to each user.
If you own an online business, then the need of a recommendation engine is inevitable as it acts as a catalyst in the scaling process.
Let’s have a look at how recommendation system help you scale up your business-
1. Driving Traffic
Recommendation engines are popular for recommending products as per user preference. But do you know it can drive traffic to your website? With the help of personalized email messages and targeted blasts, a recommendation engine can increase the amounts of traffic to your website considerably.
Personalized email messages
A recommendation system can help you segregate user data as per browsing behavior and you can engage those users with customized email communications. The click-through rates (CTR) are much higher for these personalized emails than the random ones.
Targeted Email Blasts
Targeted email blasts are the mass emails sent to a large number of targeted customers. Recommendation engines are more effective in sending such emails as they are capable of targeting the audience on the basis of their preferences instead of sending the same email to all your customers.
Research revealed that the click-through rate for personalized emails is more than 60% compared to the non-personalized emails.
Also read: How can a Recommendation System Help in Increasing Website Traffic
2. Converting One-Time-Visitors to Customers
The growth of your online business highly depends on the number of customers you gain over a period of time. A recommendation engine not only engages users with tailored recommendations but also helps them discover the right product from your store’s dense inventory. With the proliferation of online stores, finding the right content or product has become more challenging for the customers. And so, the recommendation engine has become the go-to solution for most of the online businesses.
For instance, if a first time shopper gets the most relevant recommendations based on the very first purchase, it is likely that the customer will shop again from the same store instead of browsing through other ecommerce platforms.
The bottom line is, providing the one-time-visitors with exactly what they prefer so that their search ends at your store and they grace the list of your valued customers who are more likely to show up again.
Study shows that recommendation engines can increase your visitor to customer conversion rate nearly 5 times more.
3. Increasing Average Order Value
By increasing the average order value, you can gain even more profit from your business and scale it up further. In order to increase the average order value, your digital store needs to display or recommend the most ideal products for all your customers. This goal is impossible to achieve without integrating a recommendation system to your online business. Every customer has different preferences, and only a recommendation engine can suggest the most wanted or preferred products or services to each of your customers. By doing so, it inspires the impulse buying while improving the digital reach of your products. The ‘Buy it with’ and ‘More items to Explore’ options on Amazon are such examples.
Statistics found that the probability of purchasing a recommended product is nearly 4 times more for any customer.
4. Customer Satisfaction
Customer satisfaction is a key driving factor to the success of your online business. More the number of satisfied customers, more the customer retention rate. Additionally, such customers can further promote your business through their social network when they really like your products or services. It offers the most relevant recommendations to each of your customers instead of overflooding them with the unwanted content. You may consider having an AI-powered recommendation engine, as they are more efficient in providing real-time recommendations to your customers. Furthermore, a transparent recommendation system allows the users to customize the recommendations they get, by revising their inputs such as likes, dislikes, ratings, reviews, and others. As transparency lets the users understand how their inputs play a vital role in getting recommendations, they can change those accordingly to get better results.
The e-commerce giant Alibaba uses an AI-powered recommendation engine to keep its customer satisfaction level high.
5. Delivering Quality Brand Experience
Delivering quality brand experience can boost your business growth in the long run. And a recommendation engine helps you in this. By improving content discoverability, offering a personalized browsing experience, and providing real-time recommendations, it brings engagement and decreases dropout rates.
The Muvi Recommendation Engine – Alie is industry-agnostic and deploys advanced algorithms to help your online store recommend the right products to the right users based on demographic factors, buying behavior, purchase history, browsing pattern, general preferences, and more. Quick integration is a bonus and greater scalability is proven. Want to try it out? Take a 14-day free trial here (No credit card required).