Relevant recommendations are considered highly valuable according to 87% of consumers. Real-time AI company DataStax has released the results of a survey highlighting the importance of accurate recommendations for businesses seeking to increase customer confidence and boost sales. These recommendations, usually delivered via machine learning and AI, include customized product suggestions and next best actions.
The survey has revealed that 72% of consumers trust companies more when they receive recommendations that are relevant to them. Moreover, almost half of the respondents (49%) stated that they are very likely to return to companies that provide personalized recommendations. These results suggest that offering such recommendations is crucial for businesses to retain customers.
“Any business looking to captivate and engage their customers absolutely must be thinking about how they can leverage new AI technologies to provide customers with accurate, relevant recommendations. The most impactful of these recommendation engines are fed by powerful machine learning algorithms that help to identify patterns and trends in real-time that are often too complex or subtle for humans to detect. The ability to analyze and respond to real-time user behavior with authentic, personalized recommendations and next-best actions is what sets the leaders apart,” said Davor Bonaci, Executive Vice President, DataStax.
The role of AI in personalization
Although consumers appreciate relevant recommendations in their daily lives, they are often unaware of how those recommendations are generated. According to the survey, 65% of respondents do not realize that online retailers use AI to provide product recommendations, while 64% are unaware that AI is responsible for generating song or movie streaming recommendations.
Even though many consumers are unaware that AI is responsible for generating streaming service recommendations, they still appreciate the benefits. The survey revealed that the biggest advantage of relevant recommendations is the time saved when selecting something to watch (41%), while 30% appreciate the assurance that they won't waste their time on content they won't enjoy.
Many consumers rely on AI to assist them in discovering new products and navigating the purchasing process. As many as 60% of shoppers take advantage of relevant recommendations that they encounter while browsing or shopping online, and 54% of millennials consider these recommendations to be a great benefit.
A report by McKinsey & Company has emphasized the connection between exceptional personalization and increased revenues. The report showed that companies that highlight customer intimacy generate revenue growth at a faster pace than their peers. The study found that companies that focus on personalization earn 40% more revenue from those activities than the average players. Across industries in the United States, transitioning to top-quartile performance in personalization would result in over $1 trillion in value.Speaking of personalization, a recent survey by Genesys revealed its importance in retaining customers and driving loyalty.