Product recommendations based on personal preferences have taken customer-centricity to a whole new level. Advances in technologies such as data analytics and artificial intelligence are allowing marketers to predict customer needs better and create personalized experiences, in turn, increasing the conversion rates, revenue, average order value, and customer lifetime value.
The customer journey in today’s world is more than just their visit to physical stores or e-commerce websites. It is now focusing on staying relevant in the customer’s life at various touchpoints.
With increased competition and the availability of platforms for customers to share real-time feedback about their experiences, it has become quite imperative to keep customer preferences as the top priority. In fact, more than 22% of customers expect personalized products or services from companies and are willing to share their data with companies.
Personalization not only increases customer satisfaction and brand loyalty but has several long-term benefits such as more sales conversion and reduction in marketing costs. A McKinsey study reveals that personalization can lead to up to 20% higher customer satisfaction and increase sales conversion by up to 15%.
Personalized recommendations are built on user data such as their interests, past purchases, search history, and more to have a complete understanding of customers and make useful predictions about them. It is therefore important to understand customer engagement from every point of their journey to carry powerful analyses and build offerings based on their preferences.
Despite all the benefits personalization has to offer, many companies feel that they are not on the right track while implementing personalization strategies and becoming customer-centric. Reports suggest that offering customized products and services has led to an increase in revenue as well as better return on marketing spends. Investing in customer data and analytics foundations, and understanding their behavioral patterns and customer propensity has many benefits in store
In this blog, we will discuss how a major cosmetics company in Latin America, operating in over 11 countries implemented personalized recommendations practices to maximize the average sales per order, improve conversion rate and customer lifetime value. We developed a personalized digital recommender system for their recently built website (which contributes to ~10% of overall sales).