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Consumer electronics retailer NowOnSpecial.com projects Active Decisions’ recommendation engine will lift profits by $2 million through higher sales and less live customer support.
Consumer electronics retailer NowOnSpecial.com doubled its online conversion rate and reduced customer service costs for what it anticipates will be $2 million in incremental annual profit after deploying guided selling assistance from Active Decisions, the company says.
With some 20,000 products available online, most having a large number of technical attributes to compare, consumers needed help in making purchasing decisions and call center reps needed support to guide consumers. Due to the broad product offering, it was virtually impossible to find a customer service representative with knowledge about all the categories the online store offers, says NowOnSpecial.com executive vice president Akiva Tauber.
Much of the lift from Active Decisions’ guided selling solutions is in the recovery of sales that can be lost by other types of recommendation engines, says Active Decisions CEO Jeff Dunn. The software supporting Active Decisions’ guided selling applications uses fuzzy logic and matching patterns that deliver product recommendations based on criteria the shopper has registered and then rated in importance in a one-page online form. While some other guided selling tools may wind up eliminating all products from consideration based on a strict application of the shopper`s stated criteria and provide no results, the Active Decisions tool always recommends products. The system generates natural language messages on why they are the closest fit for the shopper’s needs and flags the shopper on attributes that fall outside his or her criteria.
“If you said you want to spend $400 for a digital camera, and there was a product that met all your other criteria except that the price was $410, other technology would eliminate that product from the recommendations,” says Dunn. “About 50% of the time, customers get no results. But like a good salesperson, our technology tells the customer that based on the information he`s supplied, here is the closest product that fits his needs.”
In addition to doubling its conversion rate, making the software available to customer service reps has allowed NowOnSpecial.com to deliver a higher level of customer service using fewer reps, reducing customer service costs by a projected $300,000 annually, Akiva says. NowOnSpecial.com estimates that revenue from increased conversions recouped its initial investment in the hosted selling applications within the first two weeks of implementation. Hosted use of the guided selling tools costs retailers $100,000 to $500,000 annually depending on the number of individual applications used and channels in which they’re deployed, while software licenses, which Active Decisions now offers as an alternative, start at about $500,000, says Dunn.