AI, Marketing brands and the use of recommendation services

As data and AI improve, so do our ability to deploy better recommendation services. Let’s take a closer look at the latest research

Today, the objective is more effective marketing programs


In the modern world of marketing, it is important to understand not only how but also why recommendations are used by consumers. Understanding these concepts can help marketers and businesses to make more effective use of marketing programs. It has been seen that social media platforms such as Facebook are making very effective use of recommendations. A lot of research has already been done relating to recommendations. This has shown that over 90% of consumers have indicated that the recommendations which have been received from people with whom they are familiar have a very strong impact when it comes to decisions regarding purchases. A little over 20% of consumers pay attention to things such as online banner ads and less than 40% have any confidence in search engine ads. The majority of people rely on family and friends when it comes to recommendations. Because of these statistics, marketers have done a lot of research in order to determine which kinds of recommendations are the most effective.

Understanding this phenomenon


Because of the power of recommendations, brands understandably want to understand the principles behind recommendations better. Many marketers are therefore making increasing use of word of mouth testimony which can be converted into better company growth. During another research project, it has been discovered that it is possible to gain a 2% increase in revenue growth rate and market share when there is a 12% increase in brand advocacy. Another interesting discovery is the fact that sales can be increased by 1% when a brand or company is successful to reduce negative opinions by 2%. It is important to understand the way in which consumers view recommendations and also the criteria which is used when they are trusting brands and businesses. This also has been thoroughly investigated by research organizations who have endeavored to understand exactly how consumers look at off-line recommendations which have been received from peers, family, and friends. Interestingly this research has indicated that almost 50% of participants have indicated that they had been influenced by the likes of their friends on Facebook. They have also looked at criteria such as positive brand reviews.

Looking at the available statistics


A plethora of research indicates that  up to 50% of people will provide their friends and family with recommendations simply because they genuinely want to help them. This is so powerful that it has been patented for music (by Google).

It has also been determined that people are more likely to rely on recommendations from family and friends than they will be with products which have been endorsed by celebrities. Research has also shown that the most valuable recommendations are those which are received from a friend, a family member, someone advocating a brand or a product expert. Interestingly a large number of people consider things such as video reviews on YouTube, positive brand reviews and Facebook likes as valid recommendations. These are considered to be just as important as the recommendations of family and friends or the recommendation from a colleague regarding one brand or another. Many marketers and businesses have now discovered that the majority of consumers, in fact, more than 90% have come to trust personal testimonies and recommendations from family and friends. This is considered to be the most influential sources when it comes to making decisions regarding purchases.

How can brand marketers benefit?


Research statistics are clear when it comes to recommendations. They are the most important standard when it comes to influencing consumers into purchasing a specific product or brand. Brand recommendations are something which is shared every day and sometimes multiple times during the day. It is important to understand why and where these things are taking place. It is also known that not all recommendations are equal in value. There is also the issue of where the recommendation has originated. It is now well-known that it is beneficial when recommendations are coming from loyal customers. It is important to have available data in order to determine which channels are the most effective. This is important because this will indicate where consumers can be reached and it will also provide information on how those recommendations can be inspired. Most marketing agencies and businesses have now come to the realization that whatever product or service they are selling; it is no longer important what they think about that product or service. The critical issue is the opinion of the consumer and what they are going to tell their friends or family about that product or service. The important issue is the perception of the consumer and not the opinion of the brand or business.

Understanding word-of-mouth marketing


Word-of-mouth marketing and advocacy is any action on the part of the consumer that results in a recommendation for a service, product or a brand. It is already a well-known fact that word-of-mouth recommendations which originate from loyal consumers have a considerably greater impact on the sales of products and services than any other source of information which is provided by marketers or companies. Whenever there is a healthy interest in a product or service which results in a lot of people talking about that product or service then this can significantly increase the profits which he generated by that business. The same thing will also be true when it comes to negative comments because this will always result in a decrease in profits which is generated by that product or service. Recommendations have incredible power and they are increasingly important because of their ability to influence consumers. There is a lot of power in things such as social recommendations but another important endeavor is to reach those audiences which is not only influenced by the opinions of acquaintances, friends and other customers but will also consider the opinions of people whom they do not know.

Because of well-formulated marketing strategies, there are people who are more adventurous and will do their own research regarding products and services. These people make things happen and are not merely spectators but they are creative enough to constantly identify new opportunities.