When Customers Are – and Aren’t – OK with Personalized Prices

Machine learning makes it much easier to customize the marketing of products and services – and that includes the price. But people do have issues with the general idea of price differentiation. Researchers exposed a representative sample of consumers to different types of differentiated pricing in a large-scale experiment and found that they did not like the idea in principle regardless of whether or not they benefited from the initiative. But research suggests that respecting the following four rules will help you make sure that your price differentiation is seen as fair (or at least not too unfair): Have a good reason. Combine price with product differentiation. Make pricing predictable. Proceed incrementally. [764 words]