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Dynamic Value Discrimination in Recurring Consumer Relationships: Re-centering Business on Human Values in the Digital Era


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Presented at Second Global Conference on Creating Value, New York, May 14-15, 2019.

A novel perspective leading to suggestions for action at two levels:
• A specific strategy for using ongoing dialogs about perceived value to achieve dynamic value discrimination, drawing on post-pricing of experiences and levels of participative pricing that seek a fair balance of powers to share value and risk.
• A unifying theory of collaborative value measurement and value-seeking over a spectrum of conventional and radical strategies, and of for-profits, cooperatives, and non-profits.

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Dynamic Value Discrimination in Recurring Consumer Relationships: Re-centering Business on Human Values in the Digital Era

  1. 1. Dynamic Value Discrimination in Recurring Consumer Relationships: Re-centering Business on Human Values in the Digital Era Copyright 2019, Teleshuttle Corp, all rights reserved Richard Reisman fairpay [at] teleshuttle [dot] com @RReisman, #FairPayZone 1 {Rev 5/13/19) Techonomy 10/15/18 Journal of Revenue and Pricing Management 2/26/18 FairPay book 9/16 Harvard Business Review 11/18/13 Links to background info included: Deck at (Video & Slides tab) Second Global Conference on Creating Value New York, May 14-15, 2019
  2. 2. 1 Dynamic Value Discrimination in Recurring Consumer Relationships: Re-centering Business on Human Values in the Digital Era Second Global Conference on Creating Value, New York City, May 14-15, 2019 The Gabelli School of Business (Fordham University), in conjunction with Creating Value Alliance, Customer Value Foundation and the Journal of Creating Value Richard Reisman, President, Teleshuttle Corporation 20 East 9th Street, New York, NY 10003, USA, Abstract Purpose: The ongoing digital disruption is being shaped by two opposing forces that have yet to be reconciled. Computer mediation drives a shift to recurring relationships that center on lifetime value rather than transaction value (Tzuo 2018). However, for digital services, the invisible hand breaks down and fails to establish value: consumers question the relationship between value and price, while suppliers struggle to impose artificial scarcity (Anderson 2009, Kumar 2014). A novel approach is proposed for sustainably mass-customizing value propositions and setting prices to reflect the lifetime value of the relationship -- including broad measures of reciprocal and social value. Contributions: This work offers a novel perspective leading to suggestions for action at two levels: • A specific strategy for using ongoing dialogs about perceived value to achieve dynamic value discrimination, drawing on post-pricing of experiences and levels of participative pricing that seek a fair balance of powers to share value and risk (Bertini 2013, Reisman 2018). • A unifying theory of collaborative value measurement and value-seeking over a spectrum of conventional and radical strategies, and of for-profits, cooperatives, and non-profits (Reisman 2016). Questions: How do three interacting choices shape how businesses profit by co-creating value with consumers? • Who takes the pricing risk? Business? Consumer? Shared? • Who decides the price? Business (usual)? Consumer (Pay What You Want)? Jointly? • When do they decide it? Before selection/experience? At…? After…? Conceptual framework / methodology: A conceptual architecture is applied to use-cases drawn from current and emerging practice, with focus on how digital services force rethinking of conventional economics and business practice. This draws on scholarship in marketing (Ballantyne 2011, Bertini 2012, Egbert 2014, Frow 2013, Payne 2013, Prahalad 2004, Smith 2012, Vargo 2008), behavioral economics (Natter 2015, Santana 2014, Spann 2018), and game theory (Greiff 2016), as well as evolving practice in consumer digital services (Anderson 2009, Kumar 2014, Tzuo 2018). Findings: Value propositions and how they are framed play an important role in shaping customers’ expectations of value and their willingness to pay. A firm can develop and frame value propositions dynamically through an emergent learning process with the customer. Customer segments can be determined based on value perceptions and traits, with each requiring discrete value propositions that are designed and nudged toward mutual relationship goals. Discussion and conclusion: This architecture helps clarify the learning process between customer and firm, where value perceptions are shaped dynamically based on expectations and recognition of value-in- use and -in-context. Identifying how value propositions can be designed to optimize co-pricing decisions
  3. 3. 2 in a two way learning process offers much opportunity for further empirical investigation -- and for new uses of artificial intelligence, machine learning, and analytics. For managers, using co-pricing as a means for gaining deep customer insights offers potential to expand profitability and markets. Models for co-pricing could provide new basis for segmenting customers, based on their perceptions of value and their fairness traits. Involvement in co-pricing decisions can also offer opportunities for developing more value-centered relationships -- shifting norms toward trust, fairness, transparency, and commitment between a supplier and customer. Keywords: value discrimination, value proposition, co-pricing, learning, relationships, digital transformation References Anderson, C. (2009) Free: How Today’s Smartest Businesses Profit by Giving Something for Nothing. Hyperion. Ballantyne, D., Frow, P., Varey, R., and Payne, A. (2011). Value propositions as communication practice: Taking a wider view. Industrial Marketing Management, 40, 202-210. Bertini, M., and Gourville, J. T. (2012). Pricing to create shared value. Harvard Business Review, 90(6), 96-104. Bertini, M. and Reisman, R. (2013). When Selling Digital Content, Let the Customer Set the Price, Harvard Business Review, Egbert, H., Greiff, M, and Xhangolli, K. (2014). PWYW Pricing ex Post Consumption: A Sales Strategy for Experience Goods. Journal of Innovation Economics and Management 16 (1): 249–264. Frow, Pennie, Reisman, R, and Payne, A. (2015). Co-Pricing: Co-Creating Customer Value through Dynamic Value Propositions, The 2015 Naples Forum on Service: Service Dominant Logic, Network and Systems Theory, and Service Science. Italy: Naples. Greiff, M., and Egbert, H. (2016). The Pay-What-You-Want Game: What Can be Learned from the Experimental evidence on Dictator and Trust Games? Management and Marketing 12 (1): 124–139. Kumar, V. (2014). Making ‘Freemium’ Work. Harvard Business Review 92 (5): 27–29. Natter, M, and Kaufmann, K. (2015). Voluntary Market Payments: Underlying Motives, Success Drivers and Success Potentials. Journal of Behavioral and Experimental Economics 57 (C): 149–157. Payne, A. and Frow, P. (2013). Strategic Customer Management: Integrating CRM and Relationship Marketing, Cambridge University Press. Prahalad, C.K., & Ramaswamy, V. (2004). Co-Creation experiences: The next practice in value creation, Journal of Interactive Marketing, 18(3), 5-14. Reisman, R, (2016). FairPay: Adaptively Win-Win Customer Relationships. Business Expert Press. Reisman, R. and Bertini, M. (2018), A Novel Architecture to Monetize Digital Offerings, Journal of Revenue and Pricing Management, 17: 453-458. Santana, S and Morwitz, V. (2014). We’re in This Together: How Social Values and Relationship Norms Influence Buyer Payments in Pay What You Want Settings. Harvard Business School working paper. Smith, G. (2012). Emergent Pricing Strategy. In Visionary Pricing: Reflections and Advances in Honor of Dan Nimer, ed. Gerald Smith, 103–128. Emerald Group: Bingley. Spann, M., Zeithammer, R., Bertini, M. et al (2018). Beyond Posted Prices: the Past, Present, and Future of Participative Pricing Mechanisms, Cust. Need. and Solut. 5: 121. Tzuo, T (2018). Subscribed. Portfolio/Penguin. Vargo, S., and Lusch, R. (2008). Service-dominant Logic: Continuing the evolution. Journal of the Academy of Marketing Science, 36(1), 1-10.
  4. 4. ”The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday's logic.“ --Peter Drucker • FairPay – a logic for tomorrow (…not a product) • Reisman – The FairPay Story – Pioneering digital services for people since 1960’s • Diverse businesses and roles – B2B and B2C, content and services • >50 patents, licensed to >200 companies, for billions of users – Steeped in disruption – business model crisis in content industries – A new way forward – simple new logic – deep implications – Shift the focus of customer relationships from price to value • Ideas that can change the world – Save industries + Create new value (journalism, music, video, …+nonprofits) – Human-Centered Markets – win-win values, convergent across profit spectrum – Work pro-bono with business + academia on research, trials, applications …seeking collaborators, evangelists…and offer free consultation (More information at 3
  5. 5. • Extensive conceptual development – online, book, patent filing in public domain • Extensive discussions with businesses – Vendors (NYTimes, News Corp, Disney, Spotify, Rhapsody, IBM, American Express, Verizon, plus startups) – Platform providers (Zuora, Salesforce, TheNewsProject) – Research firms (Forrester and MECLABS/MarketingSherpa) • Key elements already proven in wide use • New combinations supported by behavioral economics and emerging marketing theory • Find the sweet spots with partial steps, trials • Eminent scholar collaborators to assist in trials Toward FairPay… An open architecture, not a product 4
  6. 6. The future of subscriptions is to be risk-free to the consumer • For digital services, the provider risks nothing, …except the opportunity to take money in exchange for no value. • That will be less and less tolerated. • Risk-free subscriptions can attract and keep more customers, for more total profit. • It’s the relationship, stupid!
  7. 7. 21st Century Customer Relationships Two Known Sea Changes – Interrelationships Not Apparent 6 1. Computer-mediated relationships deepen 1-shot games (transactions)  repeated games (loyalty) 2. The Invisible Hand flails Scarcity of supply  digital: no scarcity to ration A new social contract to sustain creation – An Invisible Handshake Win-win relationships – Empowered, loyal customers Central focus: actual value to each customer Win-win relationships – Empowered, loyal customers A new social contract to sustain creation – An “Invisible Handshake,” balanced powers Central focus: actual fair value to each customer
  8. 8. Relationship Business Models Fundamental Questions • Who takes the pricing risk? Value and Risk = f(Experience, Time, Price) – Who decides the price? Advanced strategies (built on behavioral economics – homo reciprocans) – When do they decide it? Simple “Risk-free” “Post-bundling” 7
  9. 9. A Thought Experiment Imagine an all-knowing Value “Demon”* • Read buyers’ & sellers’ minds to learn value-in-use, value-in-context • Know how used, liked, value obtained, willingness/ability to pay • Know cost, economic “value surplus” (including cost to sustain) • Arbitrate fair sharing of value surplus Set personalized and fair prices --- • Practice: Better strategies • Theory: Better insights (*Like Maxwell’s Demon and Laplace’s Demon in physics) 8
  10. 10. The Relationship Economy The Journey Experience is as Important as the Product 9 [News publishers are getting smarter about the conversion funnel, …the loyalty loop, not so much!]
  11. 11. “The Subscription Economy” 10
  12. 12. The Game Theory of Commerce One-shot vs. Repeated Games • Transactions = one-shot game  zero-sum contest • Relationships = repeated games  win-win cooperation 11 (Buyer) 1. Set the rules 2. Consume Accept/buy/use (Buyer) Continue or churn? (Buyer) Pre-set offer (& price) (Seller) 3. Repeat the game? Loyalty?
  13. 13. Aligning Price with Value • Exchange of value as basis • Price as the monetary balance • Prices usually set by business – Consumers take it or leave it – Problems of uptake, churn …retention deals (=squeaky wheel) • What basis for price??? – Cost-based? – Competition-based? – Value-based? …“typical” or customized? 12
  14. 14. Set Prices Are So Last Century! Now taken for granted, but unnatural! • Historically: Prices personalized (village market) – Personal negotiation – human buyer and seller – Personal contexts – needs, bargaining powers, relationships – Communal norms (win-win): caring, fairness, even generosity • Mid-1800s: Price tags / institutions (department stores) – Institutional sellers – mass market of “consumers” – Scalable – simple, operationally efficient – Exchange norms (zero-sum): take it or leave it, bargain hunting, exploitation • E-commerce: Mass-personalization? 1:1 marketing? – Why not price? – End race to the bottom, commoditization – personalize a fair price for value – How to do it fairly, effectively, efficiently at scale??? 13
  15. 15. Value-Based Pricing (for Consumer Markets?) • Prices based on actual performance/outcomes • Proven effective in B2B markets* – Win-win: Buyer and seller agree to share in the actual “value surplus” – as co-created – High economic efficiency, reduced pricing risk, transformative competitive advantage, customer-first – But: high cost/effort for custom analysis *See Value-Based Pricing Is Transforming B2B -- Now for B2C... and Finding Value in The Subscription Economy 14
  16. 16. Through the digital looking glass The Paradox of Digital Abundance The Flawed Response: Artificial Scarcity Digital changes everything …including how we think about non-digital 15
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  19. 19. Monetizing: Digital Offerings in Networked Markets • Dilemma: Pricing for digital information – “Information wants to be free” (infinite replication) – “Information also wants to be expensive” (creation) • Answer: Re-think our value exchange process – Not allocating scarce resources (no invisible hand) – Still need to sustain creation (pay for future services) Balance value, ability to pay, cost, profit …How?... Hint: Consumers want to pay (...if you deserve it) 18
  20. 20. The Long Tail of Customer Demand Customers are not the same! Customer experience is not the same! 19 • Green revenue: capped at set price • Red head: lost surplus • Amber tail: lost sales …Dynamic and context-dependent (see Long Tail blog post) [You can lead the Long Tail of the horse to convert, but how do you keep it from churning???]
  21. 21. A digital “product”? • Valued as an “experience good” – a service – Not discrete, scarce “product” – Access, entitlements, usage – Personalized variations (items, time, intensity, volume, actions, …) – …all measurable – rich instrumentation in use – Cloud of Value New data on value for each consumer • Near-zero replication cost ( “Free”) • “Free” as a selling tool (eliminate price risk to customer ) – freemium, pay what you want, tipjars/crowdfunding, free trials …  Better: Embrace dynamic variability, control pricing risk 20
  22. 22. A key part of the answer… Separate the Sale from the Price! Post-Pricing Why not price the experience after it is known?* • Unlike typical up-front offers (Pay What You Want, etc.) • Remove the consumer’s risk discount (or rejection) • Signal supplier’s value and trust (Timing aspects: packaging/bundling, usage levels, unit price schedules) _________ *= post-pricing = ex-post pricing = price in arrears = price as you exit = price it backwards 21 –Thanks to John Blossom, Shore Communications (ContentBlogger) “Pay as You Exit: FairPay Explores New Content Pricing Discovery Regimes” – Watch the episode
  23. 23. Relationship Business Models Fundamental Questions • Who takes the pricing risk? – Who decides the price? Seller (usual)? Buyer (PWYW)? Jointly? • Manage value and risk to each party • Apply best information – When do they decide it? Before selection/experience? At…? After…? • Knowledge of selection/experience • Effect on decisions and risk 22
  24. 24. Climbing The Ladder of Value Relationships, Risk, Timing, and Participation • Relationship Perspective: Transactional Relational • Pricing risk: Will I get my money’s worth? – Sellers can reduce customers’ risk (if low marginal cost) • Value: Value-in-use is best assessed… – after use (timing = pre-pricing/post-pricing) – with recipient input (participation = seller/joint/buyer) • Price/Value: aspects: – Packaging: who defines packages, before or after use? – Usage levels: does pricing depend on actual usage? (with fair volume discounts?) – Price schedules: set by seller?– buyer? – joint? – Ability to pay: fair to each buyer (and the seller)? FairPay points the way up the ladder* *Post-bundling as an intermediate example: post-packaging / discounted usage / seller-set price schedule. 23
  25. 25. FairPay A Strategy and an Architecture for Dynamic Value Discrimination Information wants to be free Consumers want to pay… (when they think it fair) 24
  26. 26. The Relationship Economy How can we center on value? (in B2C) 25 (See my journal article and/or this summary article)
  27. 27. The Game Theory of Commerce One-shot vs. Repeated Games • Transactions = one-shot game  zero-sum contest • Relationships = repeated games  win-win cooperation 26 (Buyer) 1. Set the rules 2. Consume Accept/buy/use (Buyer) Continue or churn? (Buyer) Pre-set offer (& price) (Seller) 3. Repeat the game? Loyalty?
  28. 28. Change the Game! One-sided Loyalty vs. Joint Fairness • Conventional repeated game = Customer Loyalty: “Here is our monthly price, take it or leave it. We hope you will take the risk -- and be satisfied enough that you will continue this game.” • FairPay repeated game = Joint Fairness: “We will remove the risk and let you pay what you think fair for you after each month’s use -- but we will continue this game (beyond a few trial cycles) only if we agree that you are being reasonably fair.” 27
  29. 29. Accept/buy/use (before pricing) (Buyer) Set “fair” price (after buy and use) (Buyer) Track price (Seller) Fair to seller??? (Seller) Gated FP Offer (selective privilege) (From Seller) Price it BackwardExtend it Forward? (after trial)(limit FairPay credit) FairPay Dialog Cycle An adaptive engine for Dynamic Value Discrimination 1. Set the rules 2. Set the price 3. Repeat the game? * * Can relax criteria in Voluntary Payment Mode ** Can restrict buyer pricing power for more conventional control ** Fairness?
  30. 30. FairPay Value “Sweet Spot” Discovery Engine Continuous journey of adaptation – Frame/nudge/track Seller- gated Premium FairPay Offer Seller- gated Basic FairPay Offer Buyer Accepts FairPay Offer ? Buyer Tries Product /Service Buyer Sets FairPay Price Seller Tracks Fairness of Price High -Fair Low- Fair Un- Fair Buyer Seller Sets Price (take or leave it) Buyer Accepts Set-Price Offer ? Buyer Uses Product /Service FairPay Zone (revocable privilege) Conventional Set-Price Zone (Paywall) 29 Value/FairnessOffers * * Can relax criteria in Voluntary Payment Mode – no paywall (positive nudges only) ** Can restrict buyer pricing power for more conventional control (Also a repeated game, but less cooperative and win-win) **
  31. 31. Aligning Price with Value Pricing for the Co-Creation of Value Intuitive blend of diverse factors, emerging over the relationship  From provider to consumer (soft/fuzzy meter) – Value-in-use = experience + outcomes – Other “soft” value • Service / support • Participation / listening / responsiveness (comments, access to reporters, curators) • Social values / “triple bottom line” / ESG (investigative journalism, community)  From consumer to provider (“reverse meter”) – Monetary payments – Other currency -- “Consumer” as provider of value to “provider” • Attention to ads (customized levels) / Personal data to exploit (customized levels) • User-Generated Content / Co-creation (eg: participatory journalism) • Promotion / virality / leads • Volume/loyalty discounts Can extend through the ecosystem value chain – Even with ads, the user becomes the customer  value propositions matter – Designations of value share to creators/suppliers (vs. intermediaries) – Sustaining Bonus contributions (split to creator/supplier) 30
  32. 32. “Price Discrimination” - Buyer-accepted Economic optimum: price tracks to value • Buyer “self-discrimination”  Legitimacy (not imposed or hidden) • Engages buyers – a rewarding process, centered on personalized value propositions • Infinite segmentation, in all dimensions – Context, ability-to-pay, usage, time, devices, users, … …Price discrimination can be good! when it is “value discrimination” 31
  33. 33. Lifetime Value in Relationships Seeing through the Customer’s Eyes • Customer Lifetime Value (CLV) – to Vendor – Not current sale, but lifetime value – Balance CAC (Customer Acquisition Cost) with CLV • Vendor Lifetime Value (VLV)– to Customer – Convenience, trust, real loyalty, communal norms – Dialogs about value (outcomes) -- “Value nurturing” – Procedural utility: “Not only what, but how matters” 32
  34. 34. From Invisible Hand to Invisible Handshake …Creating Shared Value over relationship – a repeated game 33(see Invisible Hand, Invisible Handshake, and Customer Journeys posts)
  35. 35. Key Evidence and Enablers Consumers want to pay (…if deserving and fair) • Behavioral Economics and Game Theory – People are not heartless profit maximizers (eg: traditional, PWYW generosity) – Traits: Fairness, reciprocity, altruism, self-image, acceptance, … – Situations: Social/communal norms vs. economic/exchange norms – Repeated game: Invest in fairness reputation to gain continuing privilege – Treat me as a patron, make me want to be a patron • Computer-mediated dialog (AI) – Customer journeys – Facilitate automated dialog about what I value, on what basis …and act on it – Engage me as a patron, show you hear/understand me • Big Data + IoT + Predictive analytics (AI) – Cloud of Value – Use data to validate customer dialogs about value, incentivize honesty – Customize offerings and how they are framed – Show that you recognize and respect my desires as a patron  Adaptive, cooperative, “customer-first” relationships – “dialogs about value” 1. Segment based on fairness traits (social values) and value propositions 2. Foster social/communal norms (participation and dialog) 3. Nudge buyers toward fairness, perception of value, sharing value surplus 4. Motivate a repeated game that is win-win 34
  36. 36. Phasing in…an 80/20 half-step Post-pricing only – maintains full seller price control The “Risk-free” Subscription • Many sellers fear yielding any price control • “Risk-free” “Post-bundling” – Gain post-pricing benefits, – Retain full seller price control • Less adaptable to varying experiential value or ability to pay, but still far more fair and flexible • For any kind of digital content/service (news, mags, TV/video, music, games, podcasts...) 35
  37. 37. A Risk Free Subscription? (Compare to $5/mo AYCE*) 36 • Run of house access • Month-end bill, on value of usage -- discounted • No use = $0 (not $5) • Increasing usage ramps up fee …but with volume discount (often <<$5) • Cap for high usage ($5+?) – no nasty surprises • “Quality Refund” button on each item • “Reverse meter” credits value of attention to ads (all/some/none) Acquire and keep more customers More profit, even if lower average CLV Or, if free now, introduce ramped paywall with no risk hurdle (*All You Can Eat)
  38. 38. The money-back guaranty Disappointing items are free • Quality Refund button on each item • Full or partial refund at user discretion • Monitor user refund request patterns • Optionally cap excessive refunds = A basic form of FairPay fairness gating
  39. 39. Value metrics A design parameter • Consider item type, count, usage duration/dwell, sentiment, item feedback • Weight based on “Value Models” • Normalize to price schedule and apply • Track/analyze price and usage feedback • Calibrate/refine Value Models
  40. 40. From Risk-Free toward Participative FairPay • Sustaining bonus to publisher – Request sustaining contribution – voluntary??? (based on value-usage) – Nudge (at selective intensity, based on value-usage) • Sustaining bonus to creator/author/artist – Flag observed candidates and suggest contribution in invoice (based on value-usage) – voluntary??? – Nudge…
  41. 41. Concerns? • Too much cognitive load for users? – Analogous to tipping – Easy, intuitive, with rich multi-dimensional nuance – Happily pay more than you “need,” often generously – Can shift to autopilot once value patterns are learned • “Why should they get it for less than me?” – Apples vs. oranges – very different usage, value, ability to pay – Statistics can show that (multivariate) 40
  42. 42. A Flexible, Extensible Architecture Subsumes major alternatives • Coexist with conventional pricing (segment by fairness) • Tunable parameters (choice architectures) – Gating, nudging, warning, dispute-resolution – Up-selling, down-grading – Find sweet spot between liberal or tight control very tight = conventional <-------(FairPay)-------> very liberal = PWYW – Seek “late binding” (=optionality) on value propositions • Analogs of conventional methods, plus new ones, in any combination – Advertising (reverse meter) – Freemium, Paywalls (metered/soft) – Tiers, segments, dynamic/usage pricing – Customized mix of customer revenue and advertising – … 41
  43. 43. Change the Game with FairPay From invisible hand to invisible handshake 42 • From: set prices  shop for “bargains”  commoditization • To: FairPay participative value exchange  shop for value, relationship  engagement, loyalty • Delight your customers – give pricing freedom, focus on value, gain loyalty • Start with those who will be delighted and fair  Emergent strategy  Pricing “legitimacy”  Higher profits + deeper market penetration (+ad $) (See Handshake post)
  44. 44. • Traditional pricing models outdated, do not reflect the customer’s dynamic perceptions of value • Dynamic Value Discrimination offers opportunities for gaining deep insights about customer relationship value, especially in the context of digital markets • With these insights, a focal firm can craft focused and flexible value propositions that reflect a customer’s real willingness to pay Conclusions (thanks to Adrian Payne and Pennie Frow)
  45. 45. • Systematic review of how existing co-pricing models have impacted revenue and profitability • Exploration of how co-pricing models can provide a new basis for segmenting customers, each with their own specific value proposition, based on more granular perceptions of value • Determine how customer involvement in co-pricing decisions can offer opportunities for enhancing relationships, building trust, fairness and commitment between a supplier and customer – and deepen market penetration. • Empirical testing of the ‘FairPay’ Co-pricing Model – seeking collaborators. Future research
  46. 46. Thank You Call to Action • Questions? • Strategic cooperation? Trials? • Spread the word… (leads to vendors, platforms, researchers) • -- Overview, Details • Book, Journal paper, Techonomy article • E-mail Reisman: fairpay [at] teleshuttle [dot] com ---------------------- Additional Commentary Follows… 45
  47. 47. Business Contexts • Ongoing relationships – Subscriptions (ongoing services) – Item Aggregation (iTunes, Amazon, App stores, …) • Experience goods • Low marginal cost, perishable, promotions (Also, costly goods, using a minimum price floor) • “Deserving” sellers/producers (For profit … and non-profit) 46
  48. 48. Product / Service Category Examples • Anything with low marginal cost – Long-tail / low-demand products (expand market / gain revenue) – Short-head / high-demand products (expand market / gain revenue) • Digital content / products /services (by item or by subscription) – Social media /communications – News / information / magazines – Music / audio / podcasts – Video – Games – E-Books – Apps / Software – Other Digital Services • Real products /services (especially experience goods) – Low marginal cost (primary product or extras/support) – Sampling / trials /coupons (eg: Groupon) – Perishable excess (eg: hotels, transport, museums, events) – Costly goods with a minimum price floor + FairPay bonus 47
  49. 49. Usage/Value Pricing - Buyer-friendly • Deadweight loss of “all you can eat” unlimited subscriptions • Soften the “ticking meter” / no shocking usage bill • Price considering usage, but… – Buyer decides, factors in: • Usage history • Volume discounts (…with seller guidance) – Soften the extremes – average out – Suggest price caps Price tracks to value (with affordability) (Reduce risk of not getting your money’s worth) Warm and fuzzy, good feelings 48 Advanced Economics:
  50. 50. THE SECOND GLOBAL CREATING VALUE CONFERENCE PROGRAM DAY 1- TUESDAY MAY 14, 2019 Time Session Location 8.00-8.45 Registration and Breakfast Platt Court 8.45-9.00 Welcoming Remarks McNally Auditorium Sertan Kabadayi- Fordham University Gautam Mahajan- Customer Value Foundation Christian Grönroos- Hanken School of Economics 9.00-9.30 Plenary Session 1 McNally Auditorium Luiz Moutinho - University of Suffolk "The Futurable Default…Value is…" 9.30-10.00 Plenary Session 2 McNally Auditorium Nicole Spagnolia Licciardi- Mars, Inc. "The Story of User Centricity: Creating Value through a Movement" 10.00-10.30 Coffee Break Platt Court 10.30-11.00 Plenary Session 3 McNally Auditorium Anurag Batra- BW Businessworld & Exchange4Media 11.00-11.30 Plenary Session 4 McNally Auditorium Russ Klein- American Marketing Association "Experience Design: The Next Frontier for Value Creation? 11.30-12.15 Key Note Speaker Session McNally Auditorium Philip Kotler - Northwestern University 12.15-1.15 Lunch Gabelli, G76 1.15-1.45 Plenary Session 5 McNally Auditorium Raj Sisodia- Babson College " Beyond Value Creation: Business as Healing" 1.45-2.15 Pleanary Session 6 McNally Auditorium James Euchner- Aston Business School "An Automation Manifesto: How automation and AI can destroy customer value and what to do about it." 2.15.-2.45 Pleanary Session 7 McNally Auditorium Robert Passikoff- Brand Keys "Want Real Value? Put Your Trust in Trust" 2.45-3.15 Coffee Break Platt Court 3.15-4.15 Parallel Paper Sessions 1 See parallel paper session schedule for session titles, papers and rooms 4.25-5.25 Parallel Paper Sessions 2 See parallel paper session schedule for session titles, papers and rooms 6.00-8.00 Reception and Dinner, at SuperNova restaurant, inside NOVOTEL HOTEL Address: 226 West 52nd Street (2nd Floor), NYC 10019
  51. 51. THE SECOND GLOBAL CREATING VALUE CONFERENCE PROGRAM DAY 2- WEDNESDAY MAY 15, 2019 Time Session Location 8.30-9.00 Breakfast Platt Court 9.00-9.30 Plenary Session 8 McNally Auditorium Eric Almquist- Bain& Company "The Elements of Value" 9.30-10.00 Plenary Session 9 McNally Auditorium Scott Keller- TPG Telemanagement "Building Trust through better customer interactions" 10.00-10.30 Plenary Session 10 McNally Auditorium Lerzan Aksoy- Fordham University Timothy Keiningham- St. John's University "Innovation and Firm Performance" 10.30-11.00 Coffee Break Platt Court 11.00-11.30 Plenary Session 11 McNally Auditorium Alan Williams- ServiceBrand Global “Shh... The Values Economy is here" 11.30-12.00 Plenary Session 12 McNally Auditorium Christopher Dann- Strategy&- PwC Network "The Lesson of Lost Value" 12.00-12.30 Plenary Session 13 McNally Auditorium Benjamin Cohen- T-Rex "Corporate Philosophy Best Practices for the 21st Century: Cultivating 3 Kinds of Capital to Build Lasting Value" 12.30-1.30 Lunch Platt Court 12.30-1.30 Journal of Creating Value, Board Meeting Lunch Room 460 (4th Floor) 1.30-2.00 Plenary Session 14 McNally Auditorium Michael Pirson- Fordham University "Creating Human Value" 2.00-2.30 Plenary Session 15 McNally Auditorium Mike Critelli -MoveFlux Corporation "How to Build Productive Communities Within /Across Organizations" 2.30-3.00 Coffee Break Platt Court 3.00-4.00 Parallel Paper Sessions 3 See parallel paper session schedule for session titles, papers and rooms 4.10-5.10 Parallel Paper Sessions 4 See parallel paper session schedule for session titles, papers and rooms 5.15-5.30 Closing Remarks McNally Auditorium Dr Alon Rozen- Dean, Ecole Des Ponts Business School, Paris Dr Youji Kohda- Dean, Japan Advanced Inst. of Science & Technology
  52. 52. Tuesday, May 14 3.15-4.15 Parallel Paper Sessions 1 Paper Session 1.1: Value Creation and Technology GABELLI, ROOM 212, 2ND FLOOR "AI-Based Claims Denial Management Holds the Promise of Creating Value for Employees, the Enterprise and Customers" Tanvir Khan, Dhurai Ganesan, Harsh Vinayak "Disruptive Impact of Technology On Fashion Manufacturing & How Crowdsourcing Is Adding Value to Manufacturers, Weavers and Amateur Designers" Somdutta Singh "Happiness from the Value of Mobile Internet: The Moderation of Frequency" Zhimin Zhou Paper Session 1.2: Value Creation in Services GABELLI, ROOM 213, 2ND FLOOR "Assessing Value: An Asymmetry Analysis of Service Touchpoints" Eric T. Brey, Kristine Schoonover "Service Experience - Service Context Framework for Value Creation" Kazuyoshi Hidaka "Creating Value through Resource Complementarity in Health Service Ecosystem: Case Digital Surgery Journey Innovation" Laura Kemppainen, Minna Pikkarainen, Miia Jansson, Petri Ahokangas, Timo Koivumäki Paper Session 1.3: Value Creation and Social/Human Value GABELLI, ROOM 214, 2ND FLOOR "Social Entrepreneurship Core Dimensions And Influential Perspectives for a Shared Narrative that Promotes Societal Value Co-Creation" Filipa Lancastre, Carmen Lages, Filipe Santos "Approaches to Social Value: Top-down or Bottom-up?" Guy Schmidt "Dynamic Value Discrimination in Recurring Consumer Relationships: Re-centering Business on Human Values in the Digital Era" Richard Reisman Paper Session 1.4: Value Creation and Understanding of Value GABELLI, McNALLY Amphitheater "Deconstructing the Matrix of Value Creation" Driton Sahiti "Value – How to Calculate, Sell, Price, and Buy it…" Todd Snelgrove "Towards a Substantive Understanding of Value" Derek Thomson
  53. 53. Tuesday, May 14 4.25-5.25 Parallel Paper Sessions 2 Paper Session 2.1: Value Creation and Internal Company Practices GABELLI, ROOM 212, 2ND FLOOR "Improving Climate and Culture as Key Dimensions for Creating Value through the Role of Supervisors: An Anthropological Study in a Leading International Company" Lucio R. Lescano-Duncan "The Importance of Leadership and Trust on Team Value and Performance" Alexandra Galli-Debicella, Ming-Ling Chuang, Xiaoqi Han "The Enigma of the Productivity Growth-Rate" Amnon Danzig Paper Session 2.2: Value Creation and Innovation GABELLI, ROOM 213, 2ND FLOOR "What Contributes More Value? What value?: Public Managers’ Perception of Exploitative and Explorative Innovation" Jose M Barrutia, Carmen Etxebarria, Vanessa Apaolaza, Patrick Hartmann, Ainhize Eletxigerra "Frameworks for Innovation and Value Creation in Formal Partnerships: Value Creation Wheel versus Design Thinking, Creative Problem Solving, and Lean" Luis Filipe Lages, Antonin Ricard, Aurélie Hemonnet-Goujot, Anne-Marie Guerin "Value Creation Through Open Innovation and Intrapreneurship" Corey Whipple Paper Session 2.3: Value Creation and Sustainability GABELLI, ROOM 214, 2ND FLOOR "It’s Not About Being BIG, It’s About Being GREAT. Creating Shared Value by Aligning Sustainability and Marketing Strategy" Edyta Rudawska "Sustainibility in the Beauty Industry" Somdutta Singh, Likita Kupendra Reddy "Corporate Social Responsibility in Bargaining Solution by the "Win-win-win Papakonstantinidis model” Leonidas Papakonstantinidis Paper Session 2.4: Value Creation and Academia GABELLI, McNALLY Amphitheater "Researchers as Value Co-Creators in Entrepreneurial Universities" Katarzyna Dziewanowska "The Value of Teaching Business Ethics. A Dialogue on Experiences across Academia and Professional Training" Alberto Aleo, Alice Alessandri, Monica Baraldi-Borgida "A Service Eco-System View of HDA's in UK Higher Education: Emerging Insights into Value Co-Creation" Craig Hirst , Paul Beresford, Sam Giove
  54. 54. Wednesday, May 15 3.00-4.00 Parallel Paper Sessions 3 Paper Session 3.1: Value Creation in Tourism Context GABELLI, ROOM 212, 2ND FLOOR "What is the Perceived Value of Authentic Experiences for Tourists in the Face of Increased Tourism-led Migration?" Betsy Pudliner "Unraveling the Puzzle of Value Co-creation in Tourism: Proposing and Testing an Extended Framework" Ainhize Eletxigerra, Jose M. Barrutia, Carmen Echebarria "Digital Technologies and Value Propositions in Cultural Context: Roberta Gargiulo, Bifulco Francesco Paper Session 3.2: Value Creation in Retail and Luxury Sectors GABELLI, ROOM 213, 2ND FLOOR "Value Creation Capacity of Category Management Collaborations in the UK Private Label Chilled Food Sector" Michael Benson, Paul Beresford, Craig Hirst "Competing for Share of Customers' Time: A Source of Competitive Advantage in the Retail Industry" Sandra Smith, David Shieff "Creating Value through the Development of New Luxury Taxonomy Approaches" Lawrence F. Cunningham, Francisco Conejo, Clifford Young Paper Session 3.3: Value Creation for Customers GABELLI, ROOM 214, 2ND FLOOR "Uncover Hope to Augment Customer Value" Richard Shapiro "The Role of Emotions for Value Creation in Millennial Customer Journey" Cristina Mele, Tiziana Russo Spena, Marco Tregua, Cristina Caterina Amitrano, Adriana Carotenuto "Complaint Management to the Rescue: Value Creation From Within" Moshe Davidow Paper Session 3.4: Value Creation and Internal Company Approach GABELLI, McNALLY Amphitheater "The Value Perception of Internal Marketing Practices: An Internal Customer Approach" Silvia Sievers, Carmen Abril "Impact of Audit Committee Attribute Quality on Quality of Social Disclosure" Ritu Sapra, Chanpreet Kaur "Bridging the Gap between Value Potential and Value Realization" Scott E. Sampson
  55. 55. Wednesday, May 15 4.10-5.10 Parallel Paper Sessions 4 Paper Session 4.1: Value Creation and Innovation Through Training GABELLI, ROOM 212, 2ND FLOOR "From Values to Valued Outcomes: A Training Framework for Developing Employee Capabilities" Monica De Tuya, Paul Zachos, Manuel De Tuya "Identifying Opportunities For Innovation: A Case Study of the Community Development Organizational Training Program" Gina Hill LoBasso "Unlearning for Value Re-creation: The Case of Field Innovation" Youji Kohda Paper Session 4.2: Value Creation from Different Perspectives GABELLI, ROOM 213, 2ND FLOOR "The Role of 'Ephemeral" in Value Co-Creation" Ebru Ulusoy "Determinants of Social Disclosure Quality: A Study of Select Companies" Ritu Sapra, Chanpreet Kaur The Road Not Taken: Mapping the Sweet Spot of Value, Meaning and Sensemaking Camilla Valbak-Andersen, Karina Burgdorff Jensen Paper Session 4.3: Value Creation and Collaborations GABELLI, ROOM 214, 2ND FLOOR "Opportunism In Co-creation Platforms: Forms And Individual Reactions" Fatiha Boukouyen, Joël Brée, Nouredine Belhsen "A New Consciousness for Value Co-creation" Linette Stratford, Homer Warren "The Undiscovered Truths of Collaborative Value Creation in UK Grocery Retail Category Management Relationships" Michael Benson, Charlotte R. Goose, Catherine A. Hall, Alice E. Louis, Alan R. Webb Paper Session 4.4: Value Creation and Performance GABELLI, McNALLY Amphitheater "International Expansion Globally Sustainable Competitive Advantages for SMEs" Alexandra Galli-Debicella "Law as a Source of Value Creation" George John Siedel "Sometimes It's just Better to Start Again" Denyse Drummond-Dunn