# 150 Delta’s AI Fare Experiment: Will Smart Pricing Alienate Loyal Customers?

Is AI-powered personalized pricing the next frontier—or the next fiasco—for customer loyalty and corporate reputation?

That’s the burning question I dive into with my guest, Dr. Peter Fader, on this episode of the Delighted Customers podcast. With Delta Air Lines rolling out AI-driven pricing and the world watching closely, the conversation takes a provocative turn: Should the C-suite pursue every possible drop of revenue if it risks alienating the very customers whose business it depends on? Dr. Fader walks us through the razor’s edge between innovative revenue optimization and the real dangers of going “too granular” with pricing, shining a light on the long-term risks few companies are thinking about today.

Why should you tune in? Dr. Peter Fader is not just an academic—he’s a trailblazer whose work bridges the gap between data science, behavioral psychology, and pragmatic business leadership. His pioneering research on customer lifetime value and predictive analytics has redefined how top firms measure, value, and grow their customer bases for sustainable profitability—not just quick wins. If you work in pricing, revenue management, customer experience, or strategy, you need to hear his take on dynamic pricing, the emotional minefields of AI, and how to make decisions that customers—and shareholders—can live with tomorrow, not just today.

Here are three key questions Dr. Fader answers in this episode:

• What’s the real difference between smart dynamic pricing and dangerous personalized pricing—and why should every business care?

• How can companies avoid the temptation of “slicing the bologna too thin” with AI, and what are the hidden long-term costs of over-optimizing for short-term profit?

• Where are the true opportunities and ethical boundaries in customer-based valuation, and what lessons can firms learn from industries like airlines and pro sports?

Listen now and subscribe so you never miss an episode—find us on Apple Podcasts and Spotify, or on any of your favorite podcast platforms.

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• Spotify

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Meet Dr. Peter Fader

Dr. Peter Fader is a Professor of Marketing at the Wharton School at the University of Pennsylvania, renowned for his transformative contributions to customer analytics, customer lifetime value, and predictive modeling in business. His influential books include “Customer Centricity: Focus on the Right Customers for Strategic Advantage,” “The Customer Centricity Playbook,” and “Customer-Base Audit.” Beyond academia, Peter made waves as co-founder of Zodiac, a predictive analytics firm acquired by Nike in 2018, and continues pushing the boundaries at Theta, a company focused on customer-based corporate valuation for private equity and enterprise clients.

Peter’s work stands out for blending rigorous quantitative modeling with real-world application, helping executives across industries balance the drive for immediate revenue with strategies that nurture lasting customer relationships and true organizational value. His recognitions include teaching and research awards, and he is frequently sought after for his insights by global brands, sports franchises, and media.

Connect with Peter on LinkedIn: Dr. Peter Fader

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Show Notes/References

• Delta Airlines’ AI-driven strategic pricing news: Delta, Fetcherr, and AI Pricing Example

• Customer-Based Valuation (Theta): Theta

• Prospect Theory – Daniel Kahneman & Amos Tversky: Nobel Prize in Economic Sciences 2002 – Daniel Kahneman

• Dr. Fader’s books:

  • Customer Centricity: Focus on the Right Customers for Strategic Advantage

  • Customer-Base Audit

  • The Customer Centricity Playbook

• Reference to Amazon’s 2000 personalized pricing backlash: Wired: Amazon Customers Upset About Price Tests

Have a question or feedback? Reach out—I love hearing from listeners!