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A new kind of Facebook app for winning over customers

Companies have embraced Facebook Apps as way to help consumers learn about their products, and chat about them with others. But what they're not doing -- yet -- is leveraging readily-available Facebook data to show users items they are likely to want before they even know they do.

Enter Random House.

The publishing giant earlier this year launched an app, called BookScout, that, unlike most Facebook apps, offers custom recommendations for readers based on their entire history of Facebook postings. Rival apps, like Goodreads and BookShout!, require users to be actively involved in "teaching" the underlying algorithm about the genres they like, or don't.

And BookScout differs from the custom recommendations delivered by other services, like Amazon and Netflix, in that it doesn't just plug Random House books; it also suggests titles from competitors, among them HarperCollins, McSweeney's and Amazon Publishing.

Building consumer trust

The distinctions matter. Consumers today are in control of the marketing relationship, and what they want most is to make minimal effort in exchange for maximum return. What sets BookScout apart from the competition is relatively simple, but the potential for success is huge: the app taps into Facebook data without requiring users to do a thing (except  download the free app).

What's more, Random House recognizes that consumers also have to trust the companies they are engaging with -- and promising an objective service that makes recommendations, regardless of the company behind the product, is one way to do that.

At least, that's the goal of BookScout. Some critics say the service has some kinks to work out -- and it's not clear how successful it has been. Random House claims 3,200 users have downloaded the free app since its January release, but doesn't elaborate on whether that has led to actual book sales. "[T]he tool was intended to be a driver of conversation about books, not a sales initiative," Amanda Close, the company's senior vice president of digital marketplace development, told Teleread, a publishing industry news site.

Still, the payoff can be significant. Trevor Legwinski, the director of marketing at Strands Recommender, which provides product recommendations, says companies that engage in custom recommendations on average see sales rise eight to 12 percent.

Seeing a sales lift

That's what Melrose Jewelers, an online seller of luxury watches, discovered firsthand. In 2010, the company released an app, "Which Roles Are You," that provides custom recommendations for users based on a 5-part questionnaire about their eating, exercise and other habits. They then receive personalized watch profiles via email. By implementing the Facebook app, Krishan Agarwal, CEO of Melrose, says sales from Facebook fans jumped $100,000 in the first month after the app.

"You can turn idle Facebook fans into engaged participants and [ultimately] loyal customers," Kyle Mitnick, director of online marketing at Melrose Jewelers, told Small Business Computing.

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