Is personalized pricing the future of shopping?
We. Are used to paying different prices for airline tickets, uber, rides and hotel, rooms but, can you imagine a time when all sorts of retailers, use data to, tailor their marketing, and pricing to, each individual. Customer welcome. To the big question the monthly video series from, Chicago, Booth review I'm, how Weitzman, with, me to discuss the issue is an expert panel. Jean. Pierre Dube is the segment II Edelsten, professor, of marketing and director, of the Kilt Center for marketing at Chicago, Booth where, he teaches an MBA class on pricing. Strategies, and. John. Morris is the founder, and CEO of rise, Interactive, a digital, marketing, agency that, came out of Chicago booths, annual, business plan competition, the new venture challenge and. Our welcome to a big question and John, Morris let me let me start with you companies, are collecting a huge, amount of data these, days how. Are they using those data to personalize. Their. Offerings, great. Question so they do in a few ways the first is. They're. Getting away from manual, segmentation, and actually, being at a college and explain what we mean by manual, segmentation, sure so rather, than, creating. Business rules so we are going to market to just, males or just females, they. Are now able to gather data on people, on an individualized. Basis, and worried. About their attributes, and then, they can mark it to the individuals, that have the highest propensity, to actually be a customer, or purchase as well. As to customize, the creative, that, each one of those individuals, actually wants. To see and what do you mean what's the creative, meaning a banner, ad an email, a direct, mail piece their, on-site, experience. Their mobile, app experience, their. Social media experience so there's a whole series of different things that you can customize. Based. On what. People's. Past, purchase behavior their. Online behavior, their. Loyalty, behavior, so, that people actually start seeing creative, that they're interested in and, marketers. Are actually marketing, to people who want to see their creative and spending, less money spending. Money on people who don't want to see their creative, okay so what does that look like you say you mentioned banner ad something pops up and it's we've, all seen those kinds of things it's directed, at, me it seems almost like a description of me and then yeah, so.
Let's. Just say you. Go, to a sports. Retailer and, you're purchasing. Football. Equipment, well. The banner ads will know what you've purchased in the past they'll, be able to analyze based. On the prodigy person of the past these are the things that have the highest likelihood of being purchased going, forward so, they can show those products, into. The creative and, you work with lots of different kinds of companies so who's doing this who's, doing more of this kind of personalized, marketing you know retailers. In general are doing this fairly extensively. But. We're seeing b2b companies, doing this we are seeing hospital, systems, doing this it. Really runs, a very wide gamut in terms of multiple, industries, okay they're doing this type of stuff ok JP Dube you you your pricing, expert so, what we're, talking about marketing, to what extent a company is using these data to think. About how to get, prices, right down to the individual, or, close, to it I think, firms right now are still a little reluctant, to genuinely. Personalize. In the same way that John described, the personalization. Of saying email or a display, ad or, some other communication. I think there's a still. A lot of misunderstanding. And disagreement. About fairness. And, when it comes to the prices charged I think fairness, starts to play a really big role even. Though as I said a moment ago I think this is a misunderstood, concept, in terms of how we define what's, fair. That. Said we've, certainly, got industries, where prices. Have been targeted, and individualized. For a long time, in. Airlines, for example, we know that there's a lot, of different ways in which dynamic, pricing is used in general so dynamic, pricing largely, means that. The firm allows its prices to evolve over time based, on the accumulation of, data so. Prices. Could evolve because a flight isn't selling tickets so demand reveals, itself, to be less. Pronounced, than desired, so they lower the price a, passenger. May be through repeated interactions, with the firm reveals their status, as a high willingness to pay person, they don't get access to the same discounts, and if there's any doubts about that all, you need to do is log in to your favorite airlines website enter, your, loyalty card number or your, your, loyalty. Membership, and get, your price quote then log out and do the same thing without providing the number and you often get very different fares in fact, what the airlines will sometimes do is even show you a different, order in terms of the fares that are available so there's all sorts of things they'll do to, try and steer you towards different prices, including. Actually charging, you explicitly. Different prices for the same things so. Let's get into that issue about the the controversy. Behind personalization. And am i right in thinking John that in marketing. This is less less. Controversial, but, I don't I don't, have that reaction so, much against. Having marketing. Personalized to me as I would about, pricing, personalized to me personalization. Is probably the hottest trend in off marketing, right now. Every. Single companies trying to figure out how. They can make the experience more, relevant, and more meaningful for their customers, or their prospective, customers, and so, what they are all trying to do is collect massive amounts of data and the. First thing they're trying to do is just understand. Who. Actually wants, to see, their, advertisements. Because, if you think about when you spend money on marketing a percent. Of your money is always wasted, on people who have zero interest, in your product so if you can ensure, that you're spending it more than people who are interested, you're gonna get a higher return once. You've actually identified those, individuals. The. Next thing is you're, going to have to show them a creative, it could be a banner ad it, could be an email, it could, be a, direct, mail piece it, could also be your web experience, or your mobile app experience, and. So they. Are taking. This data in customizing, personalizing. It might be the products that they see the offers, that they get the, lifestyle, imagery the language, ah the, the vernacular. That, is used in the language there's a whole series of different things that you can personalize.
Once. You have enough data on those, individuals, well, I guess what I'm asking is do you get any any, pushback from, from. Customers companies you work with get any pushback from customers, that the idea their data being stored and then, you. Know mind to, create, this. Advertising. A. Lot of this depends on transparency, right so I think first thing is whether or not customers, are, capable, of determining that the, the. Messaging, or pricing, they received was somehow differentiated. From what others received, and this is not a new thing I mean back in nineteen, 2000, I think it was, Amazon. Got. Into some trouble there was a lot of press there's a lot of discussion about this online when. Users, determined, that depending, on which browser you're using, people. Weren't seeing the same set of deals on top 10 CDs and top 10 books so best sellers so, when there's some, sort of differentiation. And the kind of offers and in particular, offers, are being made available to some but not to you this is when you start to see a customer backlash, but I think this really boils down to transparency. In. It also depends, a little bit on culture so, for example in Europe right now and John. You're all too aware of gdpr which is a new, set of rules and regulations that are going to be implemented, later this year regarding. How individual. Data can be used in the European Union number one is going to set a set of rules, and regulations that'll be European. Union wide that all countries, will have to comply but. Amongst other things one of the most controversial, aspects, of these laws is that in theory it will give an individual, user the right to challenge any, kind, of algorithmically. Determined. Marketing. Communication, to them which could include a display ad but, also could include prices. And other kinds of things and that in. Theory this individual, be allowed to challenge why, they receive that ad which would then require the marketer. To, tell them how the algorithm. Came up with. The offer or, the communication which. Includes, going through the details of the algorithm going. Through the exact data that we're used what, information, did I use about you to come up with this offer so. You, know whether or not this will have any real bite in a court of law it has yet to be determined this is something we'll need a judicial, state precedent, in order to determine but, certainly right now it seems, to limit, some. Of the scope for doing personalization. In general, in the, u.s. I think, what you're seeing is a lot, more emphasis on the. Channelization or, at least, segmentation. Of prices, that right, now people think being, charged different amounts for the same thing is really unfair, it's. An odd thing because, we've been charged different amounts for stuff for a long time so, some, would even question it's illegal in spite of the fact that if you go to the movies for, the exact same chair at the exact same showing, of the same film your, age would determine what you paid there's a senior citizens, discount and there's, a children's discount, so there's been price discrimination. On age, for. At least as long as I've been going, to the movies which is as you can tell by my hair color a lot longer than then, I wish. There's. Certainly a lot of segmented, pricing in the airlines for example so it's funny that we accept. These things as sort of par for the course in some segments, but when we hear about it in other settings where we're not as used to seeing it suddenly, it seems unfair and, to some it might even feel unethical. Or perhaps against. The law yeah and why do you think there is that that. Tendency. To feel that you know we don't we don't feel the anything unfair about the airline pricing, and as you say the discount senior discounts, and there's not people in the streets complaining, about those and yet the idea that it would I would have a price personalized, to me is something, that seems, first. I doubt anyone, would say they think it's fair, to have differential, pricing in the airline industry I think they have people who stuck, with it yeah we have we, may not be super inelastic. In terms, of our demand for a specific airline but we're definitely inelastic. In terms of our needs to fly so, there are jobs where I have no choice but to fly there are family occasions.
That Require me to fly which, gives the airlines a fair amount of power, to implement. These pricing, regardless, of whether or not I think it's fair, in. Other industries, like retail for. Example, I might find it more unfair, I might be less like willing to accept it because there may be more substitutes. But. I think a big part of this fairness, debate stems, from a lack of understanding, about. What is fair and what's not so it seems the, established, wisdom now is that your lay, person defines fair as we, should all be charged exactly, the same amount that's fair now, here's the challenge with that definition, of fairness and this is why I think more thought is required, I'm. Sure we've all seen the movie Minority Report, seen Minority Report Minority. Report, a science-fiction, film where. A. Security. Force using. Beings. That have magical, powers but and technology, purport. To be able to anticipate consumer. Or a serrations say consumers, individuals actions before they occur and the idea would be there to target and personalize, a police action against. Someone based on a predicted. And anticipated behavior. Now, let's first review the facts number one that science fiction number, two it still required individuals to have magic powers these forensic beings, so it wasn't really pure technology, and data but, most importantly, even with this, almost Deus Ex machinae the the magical, beings right in spite of that the, climax of the film reveals that the technology, was imperfect and so, there that's an important detail targeting, is imperfect we can't get inside your mind and exactly know what you're thinking we will always make statistical. Errors and modeling. Errors when we're trying to predict behavior so, now let's step back to that we're. Not doing perfect, targeting we're doing imperfect, targeting, what, does the theory tell us because we do have established, economic. Theory on what, happens, when a firm can engage in imperfect, targeting and the answer is it. Can go anyway I know, people don't like this it could go anyway it depends, but the reality, is when. A firm engages, in imperfect. Targeting, where, there's statistical, error classification. Error etc, the. Results are ambiguous you can have scenarios, where, more consumers, get served as a, result of targeting, and everyone. In the, consumer. Population could, be made better off if you looked at total value delivered society. Could benefit from targeted, pricing similarly. From targeted, marketing but it's also theoretically, plausible, that, with, targeting, enough. People are charged higher prices, or given undecide. Vintages, from their point of view marketing. That, consumers. As a whole could be made worse off but, let's think about let's imagine that, a firm engages, in personalized, pricing, this is probably the most contentious, kind of targeted, marketing and that. More, customers, are served as a result, that. The majority of customers actually, are targeted, a lower price than would, have been the price if everyone, was required to be charged the same amount, but. In that a small minority of customers, are paying more right. Is that fair or unfair well, let's think about the alternative, if we implemented, a rule that said by law the firm has to charge everyone the same amount fewer, customers will get served so now we have to ask what's fair is it, more fair to serve the, majority even if a small minority gets, charged higher prices, as a result or, alternatively. Is it more fair to implement, a standardized. Uniform. Price for everyone we're, only a small, fraction of the consumer population, can get served now because, prices are now too high. Ya. Know a lot, of interesting issues there but there's still the, social taboo kind of exists you make a very compelling argument I just think people have a very impress, ice definition, of fairness we need to establish what is fair and equitable is it, that everyone gets charged the same amount or is that everyone gets access, to the same value, in. Terms of the. Marketing, side you and we talked about offers. And coupons which of course are a way aren't they to. Personalize, pricing, while, keeping, the official price the, same for everyone what.
Is The relationship between the marketing the personalized, marketing that you do or the segmented, marketing you do for customers and their, pricing strategies, so. In. The, groups that we generally deal with oftentimes, are separate but one group in particular that. We, are noticing is the, pricing, strategies, of our clients. That are selling commoditized, products. And. What's interesting especially as everyone, is trying to figure out how to compete with Amazon is. Pricing. Becomes, a, critical. Component to. What. Is the demand for their sales what is the impact that their marketing, is going to have and. It's. It's, an interesting thing as we're talking not just about fairness but just overall pricing, strategy. In. The, online world. Amazon. Kind, of changes all the rules oftentimes, they have a huge pricing, advantage, and. People. Are really, trying to focus on the personalized aspect, so, that if they can customize offers or they can customize pricing, to individuals, it gives them a chance to potentially compete with you, know the 800-pound, gorilla in the retail world but. Jp2, Bay because of some the the. Hesitations. That we've talked about and companies are not my, right saying companies are not using targeted pricing in the same way that they using targeted marketing, is that fair I would say it's just not as pervasive okay, I mean there are of course exceptions that, there are many retailers, not, just in the digital environment but, in the physical store environment are starting to experiment with, targeted. Coupons, so there would be a regular price on the shelf and then, targeting. Or personalization. Of prices would entail getting a special promotional, offer for some discount, off the regular price but. That is just price discrimination. So your highest willingness to pay customer, segments, don't get an offer so they pay the Shelf price that becomes the high price and then, successively. Lower willingness, to pay segments, get successively, better coupons, to get deals or discounts off, of them so you not the weight is on the sidestep this issue of whether it's fair or not well. It could still be perceived, as unfair I mean this is again, I still view fairness, as a subjective thing because, we don't have a legal, opinion or precedent, what is fair, but, if people found out that some customers got coupons and they didn't this could be perceived as being unfair, right has there been a, backlash against. Coupons. Absolutely. There's. Been first of all there's been in the media yeah. The Atlantic, for example last year had a pretty scathing article about. The. Potential, scope for unfairness, and abuse. Of targeted, marketing especially prices. And the, Council of Economic Advisers, actually wrote an entire report, in 2014. On targeted. Marketing, with big data and then, the following year in 2015. Wrote a second, report that was explicitly, about differential. Pricing and big data and if, we were to take that report, at face value their, prediction, was it would be extremely unfair, the, way they viewed it as unfair, and and, I have to admit the report. Mischaracterizes. Economic, theory I don't think the report was carefully, done but, suggests, that differential. Pricing would expropriate.
Value From consumers, and wouldn't, stand transfer, that to shareholders, of firms and as I already indicated earlier, that's, not actually a theoretical. Per. Se outcome, that, it is theoretically plausible. For, consumers, as a whole to benefit, from targeted, pricing, okay. Just. From. What. We see from the marketing side very, rarely are we having conversations. With our clients, as we're talking about offers, as it, relates to fairness, you, know it. Is more in, a conversation, of you. Know what, can we do that maximize, average, order value what, can we do to maximize the, conversion, rate but, I'll give you just some interesting nuance, if you go to the. Shopping cart page and you're ready to checkout and there's, a little line that says put in your, coupon. Code to get a discount. Oftentimes. Your conversion, rate will drop meaning. That the percent of people who actually go to purchase, decrease. A couple. Reasons a some. Of the people actually leave, to go see if they can find a coupon code and they, miss that and other, people as it relates to this feeling of fairness feel, like hey someone. Else is getting something that I'm not and so. There's a negative, emotional, impact that, actually loses sales so there's, interesting where there's some. Aspects of drive sales but sometimes a spec s-- it. Actually decreases, the number of people who are willing to purchase because, of, what. You put onto that Thank You page or, that conversion page before the thing and scientifically, this is actually an old phenomenon, our, resident. Behavioral economists, here at booth would probably, be eager to talk about the, literature on transaction, utility that economists. Tend to focus on the acquisition utility. Of products and services I mean theoretically, I think of this is the consumption, benefits, but it can be more transaction. Utility literally. Indicates. Utility. From the merits of the deal so, the fact that I think I got a deal use, me intrinsic, utility, it's maybe psychological.
And Perceptual but, it's John's example, indicates it can affect choice the fact that I don't have a coupon but, there's a slot for it that indicates someone else might might, suddenly make me feel I'm getting less transaction. Utility and paradoxically. Could affect the sale right. Just. Seems like a fan decision, it. From. The consumer, standpoint they, feel, that. If there are the ones that don't have that coupon that they are being, discriminated against in a negative way and it impacts. Oftentimes. The other could be a huge opportunity because even. If you give someone 25, cents off a 300, dollar transaction, make my favorite once I've got a they've got a man they've got a good deal so what. We're talking about personalization. Give us a sense from, your you deal mainly with the marketing side how, personalized, is. It is it really down to the individual, but you me who can't make you, talk about creative, you can't make ya banner ads for each person, so how personalized. Would be the banner, ads that people see household it is actually, going down to the individual, so. There's. A technical term called device stitching, device. Sitting, okay, so if you think of an individual, they have a physical address they, have an email address they. Have a mobile phone number but, they also have a few other things they, have a cookie. ID so. On their computer, there's a cookie that is associated, with them they. Also have a device ID on their mobile phone and so. The device stitching, is trying. To take all those different, pieces and bring it so that you are marketing. To one individual. So, rather than marketing, to someone's, laptop, and marketing, to their mobile phone you, are marketing to an individual, that happens to have multiple, devices so. That's the first key element, once. You have that then. You want to start layering in different data such. As what, is their transaction history when did they purchased in the past you.
Can Put tags on websites, where you can literally, monitor. Every, single thing a person does on a website what, sections, did they read what, did they put in a shopping cart but didn't purchase what do they actually purchase. And so, you use, that and, then you're getting into artificial intelligence, where. The artificial intelligence is determining. Okay. For this creative. It's a template where there's different things that you can you, know the background image can change the language can change the product you show could change and, it's. Basically. Allowing you to do things at a scale, that, you've never been able to do before because, if you have to create. A creative, for every single individual, and you have millions of customers just. There's. Not enough money and time to be able to do that in a cost-effective, manner but. Now every. Single individual, can get a completely. Customized, creative, that. Is based on their attributes and what's unique to them what. Proportion, of companies, do you think are really doing, this to its full extent now so. Based. On a study. I saw last year, the, entire, market, cap of personalized, marketing is, around, six hundred and forty million dollars, which is tiny but the, expectation. By, 2025. Is thirty five billion, you. Know what we're seeing now is clients, are. Going from talking about it to starting, to earmark tens of millions of dollars to. Do personalization, in a major way, the, hardest, part and the reason why it, is, in, its infancy is that. Companies. Did not build their organizations. And their data and their infrastructure, with, this concept, of doing personalized, marketing, so, all their data are in very siloed disparate, places that often, times are hard to export, our heart emerged together and so. What's, happening right now is more, the investments, in the data infrastructure, how. Do we make it so that we. Can get our CRM data which is where all the people information is with, all the transaction. Data with. All the, you. Know loyalty data, I mean those are housed typically. In different department. Department oftentimes, there's political reasons, where someone doesn't want to give access to this data and other people do want to give access the data but, then you got to bring all that data together and so. Once you have that data together you. Have a major competitive, advantage, because. That's when you can start getting into personalized marketing and a, scale like no one else can okay so it sounds like what we have to do to, you. Know make the revolution happen, is to break down all the silos, between the departments it should be very easy right in terms, of not easy no, no. But it's actually amazing, how many firms, have all the resources they need to be doing this but this is really an orbit assign problem, yep right assume, it sounds like the old marketing, department, is does. Not work the new marketing department is something that sort of has to link all the other departments, together that's.
You Know I mean one of the things that you, know we're. Talking to a major retailer, right now. Where. They're literally going through this. Transformation. Where. They've earmarked, tens of millions of dollars for personalization. They. Are. Reducing. Budgets across, multiple. Groups, and putting, a series of people that are forced, to work together to. Build the infrastructure, to create this data and. What you'll find is, publicly. Traded companies, have. A much, harder time because, you, know there is. The. Organizational, infrastructure, is so built up over time compared. To PE backed. Organizations. That, have a more, nimbleness and the ability to bring this data together presumably, older companies have had it out of the newer companies, and yep just, take retail I mean, if you compare Amazon. To any of pick your favorite, national, supermarket. Chain you know as we know Amazon's now moving into the grocery space. Amazon. Has. Over. Hundreds, of data scientists, they're hiring our PhD, students now to come in and work with their data Amazon's. Infrastructure. Their IT and architecture, is built, around being able to use data and make, decisions on data the. Surprising. Part of this is some of the stuff that Amazon, is doing let's ignore the fact they have a digital platform but, just the database stuff they're doing most. Large supermarket. Chains could have been doing since the 90s, chains. Have been collecting, individual, customer, data using loyalty cards for decades now the. Human. Capital required. Exists. To implement, and use, these data and implement targeting has been around I mean in PhD, programs, we've, been teaching students, how to do personalized, pricing, and personalized, marketing since the 90s we have faculty here at booth who, wrote papers using grocery, store loyalty data, to, design personalized. Pricing, strategies, where every single customer Lite ID would. Have their own personalized. Price so, the methodology has existed, the, understanding. Of how to use data has existed, for I should say existed, for the, better part of 20 years maybe 30 years and, the. Ability. Types of data you would need have been available to firms this is literally a constraint. On based, on who's. Working, for the firm does somebody actually worked, for the company that would know what to do with the data if they existed, having. The data set up in a way they're accessible and implementable, and then, of course a volition by the firm to implement, these kinds of strategies in the first place so the same kind of things that are holding back the completely personalized marketing, are holding back but personalized pricing there's obviously the fairness issue with pricing, which isn't, for. A lot of firms to engage in it but, I think before even a firm is would, be ready to engage, in personalization, even if they wanted to do this you, would need to rethink how data are shared who's. In charge of marketing do you actually have people in marketing who would know how to design and implement these, strategies so. There's just a lot of knowledge and an awareness that's missing, so, in those twenty years we haven't made huge. Progress towards. That realizing. The potential of these data. That companies, have being collected say 30 years 30 years yes 30 years I can unthinking, of really, papers. That would seem very innovative, to, a practitioner, right now that were published in the early 1990s. Exactly. This top so I was going to ask that the next 30 years is is that when, the barriers, are gonna be broken down and we'll actually get to. Personalized. Marketing and, personalized, price so what's happening, and I and I this is largely in the digital, space or Silicon, Valley in particular is, that, more and more firms are now hiring a blend of a. Personnel, that includes PhD, trained, PhD. Trained individuals, with PhDs, in economics PhDs. And marketing, they're, hiring, actual. Tenured, faculty in, economics, and in business, schools to, come in and be chief economists, and I think this companies, that have been doing that kind of change. In their personnel, are also, the ones who are engaging the most actively, in these kinds of practices okay Joe Morris what do you think is the future of personalized.
Marketing Over the next decade. A couple things one you're starting to see you, know VPS. Or s VPS of personalization, so just you, know there's. Budget one. Of the things I personally believe is you can't have a goal unless you put a budget against it so that's what you ap, was doing about bringing in someone specifically, to bring all the data together so. There's, actually budget, finally, getting allocated, to do this but, I think the biggest difference between the. Past and the present is. That. The ability, to leverage this data now, is in a better place than it is, been there. Also is a. Bunch. Of advertising, technology, companies out there that. Allow you to leverage this you, know data in a faster, and more efficient manner than the past so, what I I believe that we are at that turning, point where you're going to see I mean we're already seeing with our customers, that. The, number, of customers willing, to invest in this is growing and growing and. You. Know one one great example is you, know I've. Seen a multi-billion. Dollar company, that. Created, a start-up, within its company, to really sell pretty much the exact same product or service but. Because, they'd. Wanted them to get away from the, old, infrastructure. And the old technology. And be, able to build from the ground up they, felt that it had to be outside their, walls and. Build. A, built. The entire data infrastructure, that was necessary. And they did it in a fraction of the cost because. You. Know, these, legacy, systems, have like layers and layers of different pieces of technology, on it that it's just too costly to manipulate. And so oftentimes you have to start over okay, and jump here Dube do you see the you you spoke, persuasively. Against, the idea that this is unfair but do you see the concerns. About unfairness or about privacy, perhaps, for data going, away of being sort, of Epping away over the coming decades it's a lack of transparency when, I go to the movies I know that, I was charged, a high price because I'm a middle-aged.
Adult I'm not a child or a senior at least not yet when, I go on the airlines I have a slightly. Still. Vague but a slight idea that I'm paying, a higher price because, it's a week until my flight and that airline. Tickets get more expensive if you wait too long in. The digital domain I think the the concern. For a lot of people is just that lack of transparency I, got served, up an offer my. Offer wasn't all that appealing I find, out that there was many other offers that were much better and I can't understand, why. I didn't, get the better offer and even worse is this, idea that the, firm or the marketer is tracking, what I'm doing and somehow my. Interactions. With the firm in the past are going to lead to less favorable, in, the future, so in some sense I'm worried am I gonna get punished for my loyalty and that of. Course is an. Interesting question do, we think that as customers, become, more attuned to getting targeted offers will they start altering their behavior, to, try and get better offers so, I'll give you an example I ran some targeted. Promotional. Campaigns, in China with a with a telecom, company and the. Targeting. Scheme was, meant to illustrate the, new, opportunities. For data right it wasn't really a big data project but it was about showing what what, is data and. In this particular case we. Targeted based on real-time location, we used the GPRS, signal, as a indicator. Of where you were in real time and then, your proximity, to the movie theater was then deemed to be relevant to the to, whether, or not you're a prospective, customer or not so. We targeted prices, accordingly, and one. Of the concerns from the marketing folks in the on this campaign was over time, if people. Are really far away from a movie theatres are getting systematically. Better offers, on their SMS, does. That mean that people might actually stop dwelling in malls right well I start dwelling somewhere else waiting, for my offer and then I'll go to the mall once I've received my offer well once you do that you're, starting to unwind the targeting, scheme and this brings, us back to an important theoretical point that, targeted, marketing works under, the assumption, that there's no arbitrage, as, soon as customers, can decompose. What it is you've done to target and are willing to change their behavior, to unwind the fences. Targeting. Might not be so successful then. We get that point we can sell personalized, arbitrage, software, it's trying to get the best Cooper happens, unfortunately on that on that all have to come back and talk about it next time because unfortunately for the moment our time is up my. Thanks to our panel jean-pierre, Dube and John Morris for, more research analysis. And commentary visit, us online at, review dot chicago booth or edu and join us again next time for another big, question goodbye.
2018-03-05 06:28
