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The Power of AI-Driven Customer Recommendations in Driving Loyalty and Repeat Buying

By Tracey E. Schelmetic April 11, 2023

In the quest to attract and retain more customers and ensure their loyalty, many companies are finding success by using AI to more precisely pinpoint upselling and cross-selling opportunities. The goal, of course, is to drive recurring sales.

A recent survey sponsored by DataStax underscores the effectiveness of relevant product and service recommendations to customers. The research, conducted by Wakefield Research on behalf of DataStax, found that nearly three in four consumers (72%) trust a company more when they receive relevant recommendations. Additionally, nearly half (49%) of respondents said they are extremely or very likely to return to companies that provide such recommendations, suggesting this service is a must-have for businesses. These recommendations, such as highly personalized product recommendations or next best actions, are generally delivered through machine learning (ML) and AI technologies.

The research found that of 60% of customers reported taking advantage of relevant recommendations they come across while browsing or shopping online, including 54% of millennials who call these recommendations a great benefit.

“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,” said Davor Bonaci, Executive Vice President of DataStax, in a statement. “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.”

Interestingly, the research revealed that customers are mostly unaware that product or service recommendations are being driven by AI. The study found that 65% of respondents do not realize product recommendations from online retailers are powered by AI, and nearly two in three (64%) don’t recognize that song or movie streaming recommendations are powered by AI. This doesn’t mean, however, that customers don’t see the value in recommendations. The study also found that the top benefit of relevant recommendations is time saved when finding something to watch (41%), while another 30% cite that it ensures they don’t waste time on content they wouldn’t enjoy.

Edited by Alex Passett
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