The Science of Incentives
Ann Arbor, Michigan, United States United States
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Company description

Buycentives is Groupon for new cars.

Car shoppers request individualized rebates direct from car companies, which can be redeemed at any dealership.  The pain point is the confusion and dread as it relates to rebates and car prices.  It's free for consumers - car companies pay a fee per sale.

For car companies, we offer a 1:1 conversion tool.  We're building a sophisticated, predictive probability model to extract some of the inefficiency in the $30 billion car companies spend on rebates every year.  Right now, it's one size fits none - some buyers get more than what's needed, while others aren't offered enough and buy a competitive make.  It's lost margin or lost sales - pick one.

Buycentives is a hosted software service that uses a proprietary model to predict and deliver one-to-one automotive sales incentives to online shoppers.  This will significantly increase efficiency: right incentive, right customer, right time, right vehicle.

Value proposition:

  • Lower per unit incentive costs = higher margin.
  • Pay-for-performance business model.

Beyond automotive, the Buycentives model works in considered purchase verticals where brands want data-driven influence and the very end of their supply chains - at the point of sale.  These verticals include electronics, motor-sports, furniture, etc.  The company is in discussions with a major electronics retailer and one of the largest broadline retailers has also expressed an interest in the Buycentives concept.

Business model

Buycentive certificates are redeemed at any dealership at the time of purchase.  The company earns a fee from automakers for each sale.

Delivering rebates directly to shoppers keeps costly and brand-eroding incentive messages out of mass media, saving advertising expense.

Utilizing a pay-for-performance (CPS) pricing model, Buycentives aligns interests and reduces trial risk. 

Competitive advantage

No car company offers individualized or on-demand incentives.

Players such as Groupon (personalized offers), Bynamite, Netmining, BlueKai, Needium, iKnowtion, Causata and Qcue are in the general space with approaches that focus on personalization of the delivery of static offers, as opposed to real-time, individualized offers.

Development of a robust, learning predictive model, along with the founders' extensive automaker experience and network, comprise Buycentives’ unfair advantage.