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AI-powered hyper-personalized recommendations now key to building brand trust and loyalty

by | Apr 18, 2023 | Public Relations

Personalization has been a top-priority consumer demand for a while now, but new research from real-time AI firm DataStax indicates that it’s time for brands to take it up a notch. The company’s new survey underscores the need for even more relevant recommendations, the kind that are now delivered through machine learning and artificial intelligence technologies. These hyper-targeted recommendations, such as highly personalized products or next best actions, are now critical for companies looking to build consumer confidence and drive recurring sales.

The survey, conducted by Wakefield Research, found that nearly 3 in 4 consumers (72 percent) trust a company more when they receive highly relevant recommendations. Additionally, nearly half (49 percent) say they’re extremely or very likely to return to companies that provide such recommendations—suggesting this service is a must-have for businesses.

“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 at DataStax, in a news release.

AI-powered recommendations Increase sales and adoption:

AI-powered hyper-personalized recommendations now key to building brand trust and loyalty

“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,” said Bonaci. “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.”

Consumers value—but don’t always understand­—AI

While most consumers clearly value the impact of relevant recommendations in their daily lives, they’re often unclear on where those recommendations come from. The survey revealed that 65 percent of respondents do not realize product recommendations from online retailers are powered by AI, and nearly 2 in 3 (64 percent) don’t recognize that song or movie streaming recommendations are powered by AI.

AI-powered recommendations drive brand trust:

AI-powered hyper-personalized recommendations now key to building brand trust and loyalty

But that doesn’t mean consumers aren’t seeing the value of streaming service recommendations. In fact, the survey found that the top benefit of relevant recommendations is time saved when finding something to watch (41 percent), while another 30 percent cite that it ensures they don’t waste time on content they wouldn’t enjoy.

Many consumers look to AI to help identify new products and navigate the purchase process

Survey results showed that three-fifths of shoppers (60 percent) take advantage of relevant recommendations they come across while browsing or shopping online, including 54 percent of millennials who call these recommendations a great benefit.

AI-powered recommendations boost consumer loyalty:

AI-powered hyper-personalized recommendations now key to building brand trust and loyalty

In correlation with these findings, a recent report from McKinsey & Company also emphasizes the correlation between excelling at personalization and increased revenues: “Companies who excel at demonstrating customer intimacy generate faster rates of revenue growth than their peers,” the report reads. “And the closer organizations get to the consumer, the bigger the gains. Research found that companies that excel at personalization generate 40 percent more revenue from those activities than average players. Across US industries, shifting to top-quartile performance in personalization would generate over $1 trillion in value. Players who are leaders in personalization achieve outcomes by tailoring offerings and outreach to the right individual at the right moment with the right experiences.”

The survey was conducted among 1,000 nationally representative U.S. adults aged 18+.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter

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