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How Product Recommendations Boost Purchases

October 28, 2020

11 Min Read
Product-Recommendation

Product recommendations are a crucial part of the architecture of highly profitable online stores. Product recommendations improve UX and help drive sales by increasing order value. They also provide personalized shopping experiences. It’s like having a virtual shopping assistant that guides your visitors to products that best suit their needs.

Research from Accenture revealed a staggering 91% of customers are more likely to shop with brands who acknowledge, remember, and present relevant offers and recommendations to them.  Another study showed product recommendations account for up to 35% of Amazon’s total revenue.

Clearly, sleek product recommendations features are the crème de la crème of ecommerce platforms, boosting retailers’ revenues and profits.

This post explores how you can use product recommendations to increase purchases.

Let’s get started.

Understanding Product Recommendation Engines

The product recommendation engine tracks user behavior on ecommerce sites and uses this information to suggest products to users. These engines, as they are often dubbed, serve users in a particular situation by using historical data and complicated algorithms to:

  • filter out irrelevant info and
  • show only relevant material.

This user-specific treatment is what drives personalized recommendations and sales.

Here are three ways product recommendation engines work:

1. Collaborative Filtering Technique

This filtering technique uses a user’s past behavior, activities and choices to predict future preferences, based on their resemblance to other users. At its core, collaborative filtering assumes we like the same things our friends like. In this context, friends are users who picked similar products.

2. Content-based Filtering Technique

In this filtering method, cookies track a user’s visits and note the customer’s tastes and preferences. The system uses this browsing data to recommend similar items in the inventory. Let’s say you visit a store and view Samsung curved TVs. On your next visit, the algorithm will serve up more curved TVs from Samsung and other brands.

3. Hybrid Recommendations

Hybrid recommendations combine collaborative and content-based techniques. By fusing the two, the system can make more accurate recommendations. Netflix is an excellent example of a hybrid recommendation engine. Their system collects and analyzes the watching patterns of similar users (collaborative technique), and also suggests movies and shows based on the content rated by the user (content filtering).

See, you don’t have to grapple with complex mathematical formulas to understand how product recommendations engines work.

The Three Main Types of Product Recommendations (And How to Pick the Right One)

When it comes to creating a product recommendation strategy, there are three major types you need to focus on.

Types of Product Recommendations

Let’s take a closer look at each strategy, shall we?

1. Global Recommendations

Global or general recommendation systems are ideal for new users; it’s their first session and your brand lacks user data for building profiles.

Of course, this type is more of a “spray and pray” approach that leads to a lower conversion rate than the other two product recommendation types we’ll look at.

Still, letting your customers know what you have in your inventory is a good idea as they’ll realize you can meet their needs next time they need a product they’ve seen at your store.

2. Contextual Recommendations

Contextual recommendation systems generate context-aware recommendations that appeal to visitors.

Blanket offers lead to lower conversions because they aren’t relevant to the needs of most user needs. But contextual suggestions are apt and elicit more responses from customers.

Here are some quick tips on how to make situation-based offers:

  • Use location-based recommendation systems data to pick and recommend popular products in the user’s region.
  • Recommend gadget accessories to customers, e.g. when a shopper buys a cellphone, it makes perfect sense to offer them the phone case, car charger, and screen guard too.
  • Add-ons are ideal for recommendations. So if you are selling SaaS products, offering expedited customer support would be excellent.
  • Install an upsell app at your store if you haven’t done so already.

3. Personalized/Dynamic

Dynamic recommendation tailors product offers to individual shoppers.

PersonalizedSource: Remarkety

Its standout features are:

  • Personalization: it caters to single customers.
  • Dynamic: changes and adapts to users’ needs fast (even in real-time).

Dynamic recommendations are powerful in three ways.

First, they match a specific user’s needs, with a specific offer in a specific situation. As a result, they trigger instinctive purchases, increase conversions, and improve customer experience.

Second, personalized recommendations mimic the in-store experience. Some customers prefer talking to sales assistants and asking questions to determine their needs and hear suggestions. Dynamic recommendations play the same role online.

Third, it makes shopping easy. Most customers get overwhelmed when faced with a plethora of product choices. Suggestions about suitable products, be they bestsellers, items on special discounts, or new arrivals, simplify the shopping experience.

To pick the right product recommendation system for your brand, consider these three factors:

  1. Your niche and industry
    Some tactics are better suited to some niches and industries than others. Spy on your major competitors and the big dogs in your niche to see which methods they’re using.
  2. Your customer data
    Scour your analytics dashboard to make informed decisions about what would work best for you. Read patterns into your customer browsing data, product views, and purchase data.

How to Use Product Recommendations to Increase Purchases

Now that you understand how product recommendation engines work, it’s time to dig deeper. How can you make them work for you?

Let’s unpack how to use product recommendations in the scenarios below:

1. Use On-site Product Recommendations

The first stop for product recommendations optimization is your site.

Here’s how to approach recommendations on different pages on your site.

On-site Product Recommendations

i. The Homepage/Landing Page

Your homepage is your storefront.

It’s the gateway to your store, the page through which a significant number of visitors land on your site.

  • To maximize conversions, it must be rich. Offer both old and new visitors multiple conversion paths.
  • Tease new visitors by showcasing your most popular products front and center.
  • Encourage returning visitors to pick up where they left off by displaying recently viewed items.
  • Woo both new and old customers by showing off your store’s latest arrivals.

ii. On Product Detail Pages

When a customer views a product detail page or PDP, they are nanoseconds away from buying.

Don’t skimp on the product info. Add as much detail about size, color, price, and shipping info as relevant.

Use product recommendation engines to present other options to the customer.

  • Similar Products
    Show the user other products related to the one they’ve shown interest in.
  • Bought Together
    Tell the customer about products that perfectly complement their product of choice. For instance, if someone bought a camera, you can show camera accessories like a tripod, lenses, spare batteries, etc.

Done well, this increases order value as the timely recommendations encourage the customer to end up buying more than one item.

iii. On the Order Confirmation Page

A transactional message, like an order confirmation, needs to confirm an order and no more, right?

Wrong.

You can get more from your order confirmation pages as a retailer. Here’s an excellent product recommendation example on an order confirmation page:

Order confirmation pageSource:  Wishpond

Remember, a buyer has just bought something from you. They’re excited about you and your products. So why not maximize the moment?

You can ask the red-hot customer to take additional action:

  • Recommend other relevant products so they make another purchase.
  • Urge them to return to the site and browse some more.
  • Refer a friend so they consider buying the product.

iv. On the Thank You Page

Thank you pages are about more than generic customer appreciation.

Why?

A customer has just said yes to your product. So it’s the perfect chance to ask them to do more. Point out similar products they might also enjoy. You could also show popular products loved by their peers.

v. Out of Stock or 404-Pages

When a shopper lands on a 404-page, that doesn’t have to be the end of the shopping experience.

How?

Use the chance to recommend personalized products based on the customer’s last action. Or you can simply add a search box to enhance UX and empower the customer to search for the item they want intuitively.

Beauty Bay is an exemplary product recommendation example in this category.

Make maximum use of your 404 pages by using it as a gateway to other products in your store.

404-PagesSource:  Sleeknote

With out-of-stock pages, don’t just inform shoppers items have sold out. Use the chance to promote the stock that’s available.

vi. Category Pages

Your product category pages serve one crucial purpose—to get visitors to take the next action.

That step may be to click a specific product page or a narrower sub-category that gets the visitor closer to what they are looking for.

Your product categories recommendations can cover:

  • Trending products: these are fast-moving products that are gaining traction.
  • Bestsellers: these are proven products that are already popular with other shoppers.
  • Sub-categories: smaller groups of similar products that help the visitor zero in on what they want.
  • Promotions: promote goods that are on sale or any special deals you have on offer.

vii. Pop-ups

Love them or hate them, popup recommendations work.

That said, use them with finesse, or you’ll turn visitors off. Use them to endorse top-selling products or similar products.

For best results couple your pop-ups with:

  • Scarcity: tell shoppers the items they want are about to sell out.
  • Incentives: motivate shoppers into buying instantly by dangling incentives like free shipping, a gift, or a steep discount if they buy right away.
  • Countdown timers: add a countdown timer to your offer so shoppers know they have a limited time to take up your offer before it disappears.
  • Cross-sell: suggest an additional product the shopper can add to their cart when shoppers are about to checkout.

2. Use Product Recommendations in Emails

Apart from on-site recommendations, there’s another tremendous opportunity you can maximize.

Email.

Contrary to reports purporting email is dead, it’s still alive as ever.

Its advantage is that it’s an intimate medium people can’t ignore. The average person checks their email a whopping 15 times a day.

Weave recommendations into your email marketing strategy. Here’s how.

i. Thank You Emails

Do you feel thank you emails are just automated transactional emails you needn’t spend time on?

Think again.

Consider these encouraging thank you email numbers from Klaviyo:

  • 67% average open rate.
  • 6.3% click-through rate.
  • $0.55 revenue per recipient.

Besides showing gratitude to the customer for their business, you can use these emails to:

  • Showcase related products so you tempt shoppers to return to your store and buy more goods.
  • Court shoppers to take out their credit cards again by presenting popular products that are flying off the shelves.
  • Recommend important non-sales related actions. For instance, you can encourage them to follow you on social media to build a stronger brand.

ii. Promotional Emails

If you don’t promote your products via email regularly, you are leaving money on the table.

The reason?

Up to 50% of respondents to a 2020 survey said they buy products based on marketing emails. Your mailing list expects you to send promotional emails to them. In your emails, recommend products based on the user’s browsing history so they’re relevant.

Or you can simply showcase your latest arrivals as FY does.

latest arrivalsSource:  Reallygoodemails

However, don’t flood your audience with promo emails. Otherwise, they’ll suffer from email fatigue and ignore your messages.

iii. Cart Abandonment Emails

Cart abandonment vexes retailers.

Most shoppers don’t go through with a purchase after putting goods into the shopping cart. In 2019, 77.13% of shoppers abandoned their loaded shopping carts.

Thankfully, you can use marketing automation tools to rescue lost sales via email.

An effective cart abandonment campaign email that lures back a deserting shopper:

  • Grabs attention through a specific urgency-driven subject line.
  • Leads with a stunning hero image of the product.
  • Offers many incentives like free shipping and discounts.
  • Leverages social proof through reviews and testimonials.
  • Shows the shopper hot recommended products.

iv. Order Confirmation Emails

Did you know that users open order confirmation emails 8 times more than regular emails?

Because order confirmation emails have such high engagement levels, you should squeeze every ounce of marketing value from them.

How?

Cross-sell.

Offer the existing customer other products that complement what they’ve just bought. Done well, cross-selling can significantly increase the value of a sale.

5 Best Practices for Increasing Purchases Through Product Recommendations

So, how do the best of the best ecommerce retailers use recommendations? I’ve distilled their winning tactics into five best practices you can emulate to increase sales and conversions.

Let’s dig into them, shall we?

1. Use Personalization

Thanks to smart AI-based product recommendation engines, these days you can take the guesswork out of your recommendation strategy.

According to Shopify, personalized recommendations can grow conversions by up to 35%.

You can make pinpoint accurate, personalized recommendations for fast and exciting shopping experiences through:

  • Frequently Bought Together: upsell shoppers and boost Average Order Value (AOV) on product/shopping cart pages. Reveal proven product combos that usually go alongside the item your shopper has picked.
  • Related Products: use Machine Learning (ML) data to generate products associated with the one your visitor has viewed to tempt them to buy more.

2. Place Product Recommendations Above the Fold

People are lazy.

Given a choice, they don’t want to work harder than they need to. If you can make things easier for them so they don’t put extra effort, they’ll respond positively.

Put recommendations above the fold.

You will increase the chances of conversions and sales because:

  • Recommendations are immediately visible on the page.
  • Visitors don’t have to scroll down to see your most important offers.

3. Leverage Herd Mentality

It’s inborn—people do what they see other people do. That’s the herd mentality concept smart marketers use to persuade shoppers to spend more.

So the best recommendations trigger the group instinct by pointing out:

  • What other customers bought. Humans love fitting into what other people are doing. On seeing items fellow shoppers have purchased, the shoppers’ resemblance tendency kicks in so they want to see the items too.
  • What other shoppers viewed. It sparks curiosity in shoppers to see why people are viewing certain products. Why’s everyone flocking to these goods? They must be special. This prompts shoppers to check them out.
  • What’s selling the most (bestsellers). Nobody wants to miss out. If a product sells fast and proves popular with most people, shoppers deem it valuable and trendy. They want to jump on the bandwagon.

4. Craft Engaging Product Recommendations

How you phrase and communicate product recommendations can make or break a sale.

Your copy must be direct and convincing, so shoppers click through to the next page to see your offers.

In particular, your headline must scintillate.

Expressions like ‘Handpicked Products’, ‘Trending Products’, or ‘Editor’s Picks’ give the impression you chose the products carefully.

They drive immediate action.

5. Let Customer Feedback Inform Your Product Recommendations

Don’t make recommendations out of the blue.

You’ll fail miserably.

To make the most appropriate recommendations that tease shoppers to buy, use intel from on-site customer activities:

  • Browsing history: show customers products they’ve shown interest in during previous visits to your store.
  • Wishlist: make personalized recommendations from products they showed they’d love to buy.
  • Abandoned items: win back a lost sale by pointing to products the shopper dumped before checking out.

Customer feedback ensures your recommendations are specific and personalized.

Product Recommendations – The Simple Yet Effective Way to Increase Purchases

Overall, product recommendations are simple really.

They personalize the shopping experience.

And with personalization comes increased purchasing potential.

Set up and configure your product recommendation engines properly. Then watch your sales soar.


Disclaimer: This is a guest post by Hanson Cheng, He is the founder of Freedom to Ascend. He empowers online entrepreneurs and business owners to 10x their business and become financially independent.

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