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Abstract

This chapter is excerpted from ‘FairPay: Adaptively Win-Win Customer Relationships'. Businesses everywhere are recognizing the need to be more customer-focused; but struggle to see how. At the same time; our logic and business models for selling digital content and services are recognized as broken. Digital relationships enable services at low cost; but we still focus on discrete transactions in which prices and value propositions are set by sellers in ways that customers often see as exploitive. This book explains how a revolutionary new approach to pricing can solve these problems. It proposes a new architecture for cooperative service relationships that is personalized and continuously adaptive. FairPay operationalizes a new logic for conducting ongoing business relationships that adaptively seek win-win value propositions in which price reflects value. At a practical level; this book explains how this new relationship architecture applies to a range of industries. A variety of business use cases are described with motivations and guidelines for process implementation in incremental stages. These are primarily for B2C digital content and services including journalism, music, TV/video, books, games, software apps and information services but also for real services. Problems with current best practices are explained including freemium and paywalls; all-you-can-eat subscriptions; and seller-set prices and how the dynamically managed participative pricing of FairPay can enable far better price discrimination. This has great promise to transform business by enhancing customer relationships; loyalty; market share; and profits. At a conceptual level this book suggests an 'invisible handshake' in the form of participative 'co-pricing' that dynamically seeks agreement on win-win value propositions. It seeks to approximate an ideal perfectly discriminating price that is based on the actual value-in-context as derived by individual customers during each of a series of transaction cycles to enable a fair sharing of the value surplus between provider and customer. It applies modern behavioral economics in choice architectures that are implemented using computer mediated dialogs to enable deep relationship marketing and lead to a bottom line accounting that tracks to holistic metrics of value.

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Abstract

This chapter is excerpted from ‘FairPay: Adaptively Win-Win Customer Relationships'. Businesses everywhere are recognizing the need to be more customer-focused; but struggle to see how. At the same time; our logic and business models for selling digital content and services are recognized as broken. Digital relationships enable services at low cost; but we still focus on discrete transactions in which prices and value propositions are set by sellers in ways that customers often see as exploitive. This book explains how a revolutionary new approach to pricing can solve these problems. It proposes a new architecture for cooperative service relationships that is personalized and continuously adaptive. FairPay operationalizes a new logic for conducting ongoing business relationships that adaptively seek win-win value propositions in which price reflects value. At a practical level; this book explains how this new relationship architecture applies to a range of industries. A variety of business use cases are described with motivations and guidelines for process implementation in incremental stages. These are primarily for B2C digital content and services including journalism, music, TV/video, books, games, software apps and information services but also for real services. Problems with current best practices are explained including freemium and paywalls; all-you-can-eat subscriptions; and seller-set prices and how the dynamically managed participative pricing of FairPay can enable far better price discrimination. This has great promise to transform business by enhancing customer relationships; loyalty; market share; and profits. At a conceptual level this book suggests an 'invisible handshake' in the form of participative 'co-pricing' that dynamically seeks agreement on win-win value propositions. It seeks to approximate an ideal perfectly discriminating price that is based on the actual value-in-context as derived by individual customers during each of a series of transaction cycles to enable a fair sharing of the value surplus between provider and customer. It applies modern behavioral economics in choice architectures that are implemented using computer mediated dialogs to enable deep relationship marketing and lead to a bottom line accounting that tracks to holistic metrics of value.

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