Description
Generalized discounts for your customer base can lead to loss of margin without even increasing their brand engagement.
Being able to segment your customers in elastic and inelastic clusters gives corporates the possibility to optimize their revenues giving discounts only to sensitive groups of clients.
Solution
Segmentation Model
Creation of a segmentation model that first analyze customers reaction to promotion and incentives and then cluster retailers in 2 categories, sensitive or non-sensitive to discounts.
Recommendation Model
Development of a recommendation model that suggests the best discount for each client segment, along the consumer journey
A/B testing
Implementation of A/B testing campaigns for testing the model hypothesis and continuously improve both customer segmentation and discount optimization.
Results
Increased savings by 40% avoiding promotion for inelastic customers
Increased customer engagement
Promotion campaigns sent only to discount sensitive customers, optimizing campaigns delivery workload