Implementation of AI Promo Personalization System
Promo personalization — determining who, what discount and when to offer. Mass discounts "everyone 15%" — wasted money: 30-40% of recipients would buy without discount. ML system offers discount only to those who need it, selecting minimum stimulus sufficient for conversion.
Uplift Model for Promo
Uplift modeling predicts not purchase probability, but INCREASE in probability from discount. Key segments: Sure Things (~20%) — buy without discount: don't touch. Persuadables (~35%) — need right stimulus: target. Lost Causes (~25%) — won't buy even with discount: don't spend. Sleeping Dogs (~20%) — discount annoys them: don't touch.
Correct segmentation by uplift typically saves 40-50% of promo budget while maintaining 85-90% of sales volume.