Seven Key Requirements for Personalized Recommendation Services

Seven Key Requirements
for Personalized Recommendation
Services
ChoiceStream, Inc.210 BroadwayFourth FloorCambridge, MA 02139617-498-7800www.choicestream.com
Executive SummaryPersonalization has finally come of age. After years as a 'nice-to-have' feature, personalized product and content recommendations are now 'must-have' as retailers and media and entertainment providers look for ways to increase revenue and drive user engagement.
Table of Contents This paper will help you evaluate personalized recommendation services by outlining the seven key capabilities your solution must provide to maximize the Executive Summary..........................1 benefits of personalization while avoiding the potential pitfalls.
In the appendix, you'll find a Recommendation Service Evaluation Scorecard. The Introduction........................................1 scorecard summarizes the critical core capabilities your personalization service Quality Recommendations provider should offer and may be useful in meetings with potential vendors. for All Scenarios................................3
Marketing and Editorial Tools.........6
Seamless Multi-Channel Support ..............................................7 Introduction Ability to Leverage Your Data..........7 As the amount of online content grows, the importance of having tools to help users sort through it all grows as well. Every day, more and more sites and services Reporting............................................8 implement recommendations as a way to make life easier for users by presenting Performance and Reliability ..........9 them with content and products that interest them.
While recommendations help users, they also provide great benefits to the sites Easy Integration................................9 and services that offer them. Good recommendations are proven to generate faster Conclusion..........................................9 sales conversion, increase order size and boost engagement.
About ChoiceStream.......................10
ChoiceStream: Seven Key Requirements for Personalized Recommendation Services 1More Likely to Shop at Sites with Personalized
Product Recommendations by Past 6 Month Spending
When those recommendations are personalized, the benefits can be even greater. In fact, as shown in Figure 1, shoppers are even more likely to shop at sites that offer personalized recommendations. And the bigger the spender, the more likely they are to want personalized recommendations.
More Likely to Shop at Sites with Personalized Product Recommendations by Past 6 Month Spending80% 69%
60% 47% 51%41% 42%40%
20%
0% $ $1 $2 $5 >1 -1 01 51 0 $1 100 -2 -5 - ,1 05 00 00 00 00Figure 1, Source: ChoiceStream 2007 Personalization Survey
According to Forrester Research, 52 percent of online retailers indicate that they will focus on providing automated product recommendations before the 2009 1holiday season. If your organization is one of them, you have a variety of options to consider. This paper will help you evaluate those options by outlining the key capabilities that your recommendation service should provide.
ChoiceStream's experience providing recommendation services to the world's largest retail and media brands gives us a unique perspective on what's important and why. Based on this experience, the following are the key 'must-haves' for any recommendation service:
1. Quality recommendations for all scenarios proven to deliver a positive user experience and drive business uplift under all types of conditions
2. Marketing and editorial tools that enable you to control recommendations to meet business objectives
3. Multi-channel support to ensure a seamless experience across all of your sales channels
4. Ability to automatically leverage data concerning users' interests and your catalog in real-time to optimize the online experience
5. Performance and reliability to minimize latency and ensure 24x7 up time
6. Reporting to help you see what's working and why
7. Easy integration to minimize start-up time and ongoing maintenance costs
The following sections provide detailed explanations of each of these recommendation 'must-haves.'
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