Beyond Cart Value: Finding ROI in Recommendation Tools

While many people in retail now know the importance of recommendations and agree that they increase cart value, there’s still some confusion surrounding how to determine the return on investment of these tools. For instance, are they increasing the time on site? Is SEO being affected positively? Are the tools helping increase lifetime value of the customer? Below are a few items to look at when determining if the recommendations on your site are helping increase both sales and repeat business.

Google Analytics

Google Analytics is perhaps your best tool for determining return on investment when adding automated recommendations to your retail site. By adding an event to Google analytics, marketers are able to look at those shoppers who viewed recommendations versus those who did not. In addition to events, Google Analytics offers several different ways to slice and dice the data to find the ROI numbers you need.

A/B Testing

Perhaps one of the easiest ways to see how recommendations affect sales is to do an A/B test. In this test a retailer would divide shoppers into those who receive recommendations and those who do not. By looking at overall cart value and items placed in the cart, a marketer can get a decent idea of how recommendations are affecting shoppers. Due to the amount of outside influences when it comes to A/B testing, this method should be used with some of the others below to get an accurate result.

Time on Site

Recommendations can significantly increase visitor’s time on site by enticing them to view other items and “browse” more than they might without a recommendation tool. Time on site is a metric used by many SEO companies to determine a site’s worth, so it makes sense to try to increase the time when and where possible. When recommendations encourage a shopper to spend more time on a website, Google will “score” these businesses higher and as a result, the company listing will be raised in organic search results, ultimately making it even easier for shoppers to find you.

Products Viewed per Site

Often retailers will find that the total products viewed per site increase significantly when a recommendation tool is added to a shopping website. By increasing the products viewed, retailers are increasing the opportunity for those shoppers to buy, making products viewed a great metric to use when determining ROI.

Those Who Clicked on Recommendations vs. Those Who Did Not

Two other items to take note of include comparing visitors who clicked on recommendations versus all visitors, and the difference between visitors who clicked on recommendations versus those who did not. The uplift in metrics for those who do click on recommendations can be significant, reinforcing you really are engaging and converting your customers.

While it’s no secret that recommendations help boost sales overall, it’s important to know how and where those sales are being boosted. By slicing and dicing the data to look at overall trends, marketers and retail owners will have a better feel for how recommendations are affecting sales trends and how to increase overall cart sales with future offerings.

Tagged conversion, product recommendations, ROI