Smart Savings: Four AI Design Tactics for Product and Technology Innovators

Technology has given many people the power to achieve financial efficiency, offering innovative ways to save money without sacrificing quality or convenience. As experts and educators in innovation, it's important to understand and communicate the value these improvements bring. Here, we'll explore four practical tactics and real-world AI applications aimed at cost-saving while maintaining, or even enhancing, product and service value. 

Compare Options

Digital comparison platforms have transformed consumer habits, enabling informed decisions with just a few clicks. However, it's worth looking beyond traditional comparison models to avoid unwanted drawbacks, like fueling price wars or locking people into contracts that are hard to leave. 

Honey (acquired for $4 billion by PayPal in 2019) is a free browser extension comparison tool that applies algorithms to search the internet for the best deals and coupon codes, automatically applying them at checkout. This not only saves consumers money but also time, sidestepping some of the drawbacks of traditional comparison sites.

Bundle Buying Power

Group buying power has proven to benefit consumers and companies. By leveraging social networks, platforms like Groupon harness the power of collective purchasing to offer significant discounts. To improve their service, AI helps them to determine which merchants will be the ones most appealing to consumers, and therefore which offers or bundles will be most relevant to those consumers. These models provide value for both consumers, who save money, and businesses, which acquire new customers cost-effectively.

Create Value for Money

Companies like Lemonade have redefined value for money by integrating AI into their business models. Lemonade's use of AI and chatbots streamlines the insurance process, reducing overheads and passing savings onto customers. This approach illustrates how leveraging AI can lead to substantial cost reductions while enhancing customer satisfaction and service speed. To ensure customers’ trust in the AI-powered system, Lemonade takes a fixed fee for their services and any unclaimed money is donated to good causes their customers select. In 2023, Lemonade donated over $2 million to charities around the world.

Lemonade’s AI broker chatbot called Maya

Design for Total Cost of Ownership

Total Cost of Ownership (TCO) is the purchase price of a product plus the costs of operation (maintenance, insurance, upgrades, annual membership fees, etc.), minus the residual value (in case you sell the product before the end of its lifespan). Educating consumers about TCO can guide them toward more economical and sustainable choices. In the realm of home appliances, for example, while the upfront cost for a high quality washing machine may be higher than low-budget models, the savings on energy and maintenance combined with a longer life span can make them a more financially sound choice in the longer term. AI tools could help consumers visualize these long-term savings, promoting informed decision-making based on lifetime costs rather than upfront expenses.

Dos and Don’ts for Save Time

⚖️ Balance Price and Perception: While leveraging technology to reduce costs, ensure that the quality and value proposition remain clear to avoid associations of inferior quality.

⚠️ Prioritize Privacy and Transparency: When using AI to streamline operations or personalize offers, maintain a strong commitment to data privacy and clear communication about how consumer data is used.

📊 Provide Context for TCO: When presenting TCO data, provide comparisons to usual alternatives to highlight long-term savings and benefits, making the choice clear and compelling for consumers.

🧮 Maintain Trust in Pricing: Ensure your pricing strategy is transparent and justifiable. Avoid extreme low-cost solutions that may lead to skepticism about product quality or hidden costs.

By integrating these strategies and leveraging AI, companies can not only enhance their product offerings but also empower consumers to make decisions that are both economically and environmentally sustainable. This dual focus on innovation and financial efficiency paves the way for the success of consumer-centric, technology-driven solutions.

This article is is part of a series of 24 articles sharing practical, actionable tips on how to design tech products that people don't just use, but love. The articles build on the world’s leading design methods for designing successful tech products, as described in the book “Design Things that Make Sense”. Visit www.designthingsthatmakesense.com to learn more or download the free toolkit.