Newton, Mass. – A new online platform has been developed that employs last-minute price negotiations to prevent lost sales.
Dubbed Netotiate, the promotional tool utilizes sophisticated behavioral economics, web analytics and customer profiling to predict when a shopper is about to abandon a product page.
It then intervenes to keep the shopper engaged by displaying a “Make an Offer” button and asking how much the customer is willing to pay for the item. The system accepts or counters the consumer’s offer based on predefined rules that are customized for every brand, category, margin, shopper profile and SKU, and then adjusts the price in the shopping cart in real time when a deal is reached.
Designed for merchants generating more than $100 million in annual online sales, the company said its methodology is driving average revenue increases of 25 percent for participating retailers — even with discounts as low as 1 percent — without eroding profit margins.
Cofounder/CEO Noam Javits said the industry-first approach eliminates the flaws of conventional discounting methods such as coupons, which cannibalize 100 percent of consumers who might have purchased regardless of coupon availability, and frequently cut into profits because the offered discount is higher than the merchant’s margin.
“It’s a completely new model that gives merchants full margin control, engages consumers who will likely walk away otherwise, and can make the difference between losing and closing a sale,” he said.
Netotiate launched as a beta platform in 2012, and early adopters range from Sears Hometown and Outlet Stores to leading retailers in Europe and Latin America. Noted Donnie Franzen, e-commerce general manager/director at Sears Hometown and Outlet Stores, “We have consistently seen healthy double-digit increases in both conversion rates and revenue per visit since we began using the Netotiate platform in early 2013. The fact that customers not only receive dollars off their purchase but also feel in control of their discount encourages consumers to stay on our website and complete sales that previously went by the wayside.”
Netotiate said its platform is fully automated, can be activated in as little as two weeks, and has been successfully tested with products selling from $30 to $700 and more.