Alex Tabarrok

Price Discrimination Thermometer

Blog Post created by Alex Tabarrok on Dec 11, 2015

Originally posted on December 10, 2009.

 

When customers call Cingular threatening to switch to another firm or asking for discounts, operators see a handy thermometer that tells them the life time value (LTV) of the customer to the company. The higher the meter reading the more discounts the operator is allowed to offer the customer. The Consumerist has the details including excerpts from company documents explaining the system.

 

valuechart.jpg

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