Predict Customer Actions

The better a system can determine the customer’s actions, the better the company can target the customer. A recommendation engine can predict the customer’s actions and increase profits.

For example, a company can lower its costs of customer acquisition by knowing which customers will become repeat customers through the offer of a coupon. The system can determine the 60% of customers who will become repeat customers. The targeting of this set rather than all customers lowers the costs and improves revenue on the 40% of customers who are inclined to become repeat customers without a coupon offer.