Why AI Driven Personalized Incentives Work

by Guest
on December 6th, 2017
Why AI Driven Personalized Incentives Work

It’s no secret that incentives encourage consumers to purchase; however, no two incentives have the same degree of effectiveness.

Generic incentives, or blanket discounts used for all website visitors, are always presented in the same way, at the same time and with the same messaging. They are effective to a certain degree, but are the equivalent of throwing things against a wall and crossing your fingers in the hopes that some will stick. They lack thoughtfulness and strategy.

Unlike their generic counterpart, personalized incentives target the right customer, through the right medium, and at the right time. Consumer data insights are collected and analyzed to ensure that highly unique incentives are directed at segmented audiences to elicit emotion that ultimately drives ROI.

Sounds pretty good, right?

So, how is it done?

The Personalization Challenge

Collecting the breadth of audience insights necessary to truly personalize the consumer experience in the ecommerce space is a tremendous feat. Appropriately sorting, targeting, re-targeting, and getting the timing just right is a job that, by its very nature, requires complex algorithms to accomplish.

There also exists the danger of offering too many incentives that may possibly damage brand perception, not to mention profits. A brand that appears too eager to sell may not be as well received as one that is more exclusive in their messaging.

Only machine learning artificial intelligence (AI) can strike the right balance between all these contributing factors. AI works to automate the audience data mining process and learns when is best to deliver specific personalized incentives to each consumer segment. By automating this process, both consumers and brands save time and enjoy a more streamlined ecommerce shopping process.

When appropriately executed, personalized incentives help to streamline the overall purchasing experience while increasing your bottom line. The approach delivers a variety of advantages that drive successful sales results, such as:

Improved brand perception

Brands targeting consumers with personalized incentives are, according to a recent survey by Virtual Incentives, perceived as being “smart, unique, and caring.” Statistics repeatedly show that not only are AI personalized incentive platforms better for business, but that consumers actually prefer them. Fifty-six percent of respondents on the same survey said that receiving a personalized incentive would improve their consideration of the brand.

Gain consumer trust

Gaining consumer confidence and trust is not an easy task, but one that, once accomplished, pays back tremendous rewards. Demonstrating that your brand knows how to reach specific customers through personalized incentives is one way to begin building this trust. Personalized incentives make people feel “respected as a customer” and therefore more likely to make a purchase.

Seventy-seven percent of loyalty program members even say that that they “enjoy when a company uses their purchasing history to offer them personalized bonuses and rewards.”

For example, if a customer purchases a pair of leather boots, it would be useful for that customer to be offered complimentary products that enhance their purchase. Additional items such as leather care products and brushes offered at a time that is most convenient to the buyer, will not only be appreciated but will also build their trust in your brand.

Drive consumer loyalty

The math here is simple: When consumers are incentivized with personal rewards, and when their online shopping experience is made easier with automated recommendations, they are more likely to make subsequent purchases in the future.

Not only that, but providing personalized incentives shows consumers that your brand has taken the time to study their behavior and learn their preferences in order to tailor incentives just for them. In a world where consumers are constantly being bombarded with information, this unique approach creates a meaningful connection with each of your customers, adding to reasons why they are likely to purchase from your company again and again.

Boost profitability

Interestingly, incentive programs typically lead to even more expensive purchases in larger quantities–especially with higher status customers who earn an annual income of $50K or more, according to the Virtual Incentives research study.

Key Takeaways

It’s clear why generic or one-size-fits-all incentive approaches aren’t as effective as deep-diving personalized incentives. AI-powered incentives help make online shopping more efficient, convenient, and enjoyable for the consumer while delivering added value to the brand. By positively influencing purchasing decisions, personalized incentives increase customer sentiment, loyalty, and trust, while improving overall brand perception.

AI-powered personalized incentives are a win-win scenario for both consumers and brands.

About the Author


Mali Cohen Denzinger, VP Marketing at Personali, is an experienced marketing executive with nearly 20 years of experience, specifically in the software industry. She has the proven ability to drive numerous, simultaneous promotional initiatives to successful results.