“If everyone is equal before God, then everyone is equal before price.” (John Wanamaker)
Not all customers are created equal. Certain groups find more value in a given good than others do. A smart professional spots this and realises that pushing the same sticker price across the whole market is inefficient: in some cases it leaves a good chunk of money in the pockets of customers rather than the coffers of the business, in other cases it prevents sales that are still profitable at some lower price. This session explores the fascinating challenge of tailoring prices to customer valuations. One lesson is that, paradoxically, proper price discrimination requires some input from customers–as they are the one’s who ultimately decide whether something is cheap or expensive. The traditional “take-it-or-leave-it” does not suffice. Second, while there are many forms of discrimination, they belong to one of three categories: observation, offering or mechanism. The session explains these labels and proposes many examples and possible actions.