KDDI drives conversion through personalized product recommendations from Acoustic

Challenge: Making recommendations that drive sales

KDDI, the telecom giant of Japan, wanted better performance from its eCommerce website, au Online Shop, that offered mobile phones and related goods. “At that time, we were working to grow the online shop business and needed to increase our conversion rate,” says Shogo Nakayama, Online Shop Promotion Office Manager at KDDI. “Analytics tools showed us the abandonment rate on a page-by-page basis, but it was difficult to identify problems with specific pages. We were also relying on heuristic evaluations to resolve the issues. We were looking for a more efficient, more effective solution — something that would enable us to identify the behavior of individual users in more specific terms.”

“Customers who want to buy a mobile phone have a preferred style of shopping. If they go to a brick-and-mortar store, they’ll naturally get the store associate’s recommendations,” says Nakayama. “I had the idea of creating something along the lines of an online concierge, a service that could recommend new mobile phone models to site visitors based on their current model.”

Tsuyoshi Soma, Assistant Manager, Online Shop Promotion Office, at KDDI adds, “Major e-commerce sites like Amazon and Rakuten display information such as recommendations and purchase history data to individual customers, but we had yet to offer this kind of experience to customers visiting the au Online Shop. So, we were looking for a solution that would offer personalized product recommendations to our online shop visitors.”

KDDI undertook a comparison of competing products prior to choosing Acoustic. “We had three main factors in mind when we were comparing the various solutions: cost, function, and service quality,” says Soma. “Having compared multiple candidate vendors, Acoustic emerged as the overall winner. We went with Acoustic because their products are not only reasonably priced, but also superior to rival offerings in terms of both function and quality.”

Solution: Communicating with a personalized touch

KDDI’s au Online Shop conversion rate improved dramatically when they started using Acoustic Experience Analytics (Tealeaf). The results were “incredible,” says Nakayama. “Our team had developed a recommendation engine that could predict what phone model a user might be tempted by, based on their current model,” he continues. “We needed to find a solution to use this effectively online and Acoustic Personalization was the best fit for our needs. It’s an excellent product for both performance and cost efficiency. This was a major improvement, as we hadn’t been making full use of our recommendation engine up to that point.”

KDDI now uses four Acoustic products: Personalization, Content, Journey Analytics — a linked analytics service that enables you to track the customer journey — and Exchange, which links IDs to external services providers. This integration with Exchange is a significant differentiator for Acoustic over competitive solutions.

“The implementation process of Acoustic products wasn’t particularly prolonged,” says Soma. “Take Personalization — a product we’ve recently brought in. The whole process from vendor selection to website personalization took just four or five months. Most impressive was the recovery support we received when we encountered obstacles in implementing Personalization. The Acoustic team was very quick to find solutions to problems, working with their team in the U.S. and elsewhere on problems that couldn’t be resolved by the Japan team alone, which meant we were able to go live and start personalization on our online shop very quickly. This was a multi-company project involving Acoustic, IBM, and KDDI, but this partnership made for a smooth, reliable implementation overall.”

“What’s more, we’ve been able to show users optimized content without making any major alterations to the existing online shop infrastructure,” Soma continues. “The only modifications we made to the current operating system were to add a few scripts, which was a huge benefit in terms of both scheduling and cost.”

Results: Increased click-throughs and purchases

“As expected, the biggest impact has been on conversions,” says Nakayama. “Personalized product recommendations generated by our recommendation engine are displayed at the top of the au Online Shop home page. The algorithm for selecting these recommended products is expressed using Acoustic Personalization. What’s more, the numbers clearly demonstrate a higher conversion rate for visitors who click through these recommendations. For us, the resulting increase in customer contract rates means that Acoustic has been a highly cost-effective choice.”

“In addition to our recommendation engine, we’ve also made it possible to display recommendations for mobile phone accessories using the personalization algorithm,” says Soma. “Because of the large number of products available on the website, there were certain items that wouldn’t come up unless a customer searched for them specifically. Another plus is that our customers now see accessory recommendations based on their browsing history and other behavioral data, which increases the opportunity for them to see more about our products. This has demonstrably increased the number of click-throughs and purchases by customers who show an interest in these products.”

“Any industry with an e-commerce business stands to benefit from using Acoustic, especially their Personalization solution,” says Nakayama. “The service is incredibly easy to use, even if you’re not a marketing expert. It’s a tool that enables you to experiment with A/B testing, for example, and to generate steady improvements as a result. The difference in performance between patterns generated on the basis of the rules we’d come up with and those generated by the Acoustic algorithms has been clearly borne out by an increase in conversions.”

For future work with Acoustic, Nakayama comments, “We’re looking to utilize the knowledge and experience of Acoustic and its partners in finding the optimal way to acquire new customers.”

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