Marketing: ID-adjusted Prices

As a very quick draft, I’d like to hold down a quick thought that many of you might be able to relate to or understand, and which will require further elaboration and work to fully phrase out and produce the concepts behind into a fleshed-out manifesto or essay. I’m talking about prices adjusted to the customer.

If an online store – that may be based in the USA and hence requires a set amount of USD to make a living in the USA, based on US prices – wants to sell products, and they choose the USD for their local customers, but then require e.g. European customers to pay in Euros and British Pounds, there is a lot of money to be gained for the store, but also a lot of trickery done that is not far away from literal cheating a customer in their faces.

Now, there is an argument that some people may come up with which says: “But the Euro is a stronger currency and people in Germany earn more money than US citizen. They should also pay more.” and honestly, I have mixed feelings about that idea. Because if we start requiring intel about our customers, asking about their place of origin, that itself is already a sketchy concept. Now, if we lever prices to equality like that, we basically have the basics for (economists will correct me on this one) not only a non-free market but also a communist-oriented system. And that’s only the tip of the iceberg: If we truly believe in that ideology and want fair prices, we need to gather intel about the customer’s income, wealth and standing, so to figure out whether one British customer really should pay £50 or rather £50’000, if, let’s say, he were to be a millionaire. And it goes without saying that this not only invades privacy, it also makes transactions insane and plain unattractive.

The next issue arises when we think about how a customer would feel treated when having to pay – essentially – more than others, because he is in fair standing. It discourages hard work, since wealth is gone just as fast anyways (i.e. the communist basics), discriminates the ones who worked hard and/or efficiently in a way to have a more stable economy and also very clearly points with a finger at rich and poor people/nations. Then you have a problem that has more to do with a general economic issue, namely that you start to look at digital goods and services as you’d look at physical goods and services, which function entirely differently:

Not only is a digital good often very tertiary and an expression of luxury (you don’t starve if you can’t download the latest video game online), but you’re lacking two fundamental values in digital goods which are amongst the very definition of a good’s value/price: time and scarceness. – If you tell me to go to my local grocery store and acquire a loaf of bread, that resource is in limited availability and requires me to invest some amount of time into traveling that distance from point A to point B and back. However, on the other end, I can press one key and an algorithm for face detection is duplicated almost instantaneously while I’ve not moved a millimeter from my seat. And instead of utilising those technological facts to our advantage (hey, what’s better than infinite supply and no waiting time or distance?), we deploy police, laws and trickery to somehow force our old, traditional, unflexible, inadequate model of economics on digital trade. And that is where the 21st century will have a natural selection where the old, dusty 18th century economists will get left behind and those with a progressive mindset survive and build the future.

This is an extremely vast scientific field and I dare not go into it too much right now, but I would like to take that opportunity to make one thing very clear: We are no longer dealing with one model of economics, but with multiple that run parallel. I like to refer to the model applicable to the electronic world as “E-conomics”, which stands for “Electronic Economics”, i.e. the science that occupies itself with economic observations and methods in the electronic/digital sector.

Trying to get the most out of the customer is arguably unethical and consequently leads to a competitive society that will not have any motivation to work together and feel unity. For various reasons, it will – in future elaborations – prove to be a lot more efficient and long-term sane to lead trade in a mutual-interest way where the customer and vendor have a more equal standing and the vendor is as much interested in the customer’s well-being as the customer in the vendor’s. All these subjects are a lot more relevant to E-conomics and I’m looking forward to seeing our new era develop with intelligent people contributing to solutions and methods.

– D. von Ziegler