Bait and Hook Business Model

This is one of the few oldest models of business used to put value into products or services. The philosophy behind this business model is very simple, first lure in customers for something at dirt cheap or free price and once they are hooked then start charging for that product or its accessories. There are many industries which are excellently using this business model to attract customers and once they are attracted then the company keeps on charging them for the product or service provided.
One of the best examples of bait and hook model has been the printer selling companies. When we buy a printer, we usually get the whole package of a printer at a very low cost. This is an excellent way to pull in customers. Once the customers are locked for that product and have started using it, the company starts making profit out of the later use of accessories from that product. The idea developed has been excellent. History of this idea has been related to the Gillette Company. Gillette for the first time introduced this model in its products. When you buy a Gillette razor you get some blades with it as well. When you have used these blades you have to pay nearly equal to the cost of the razor plus the blades already packaged in to buy new blades. This Most Profitable Telemarketing Business model is also known as razor and blades business model because of this historically established relation with Gillette.
Freebie marketing has also been associated with this Successful Company List model. As free products are given to the customers and afterward they have to purchase the accessories related to these products to keep them in regular use. Bait and hook business model has also gathered a lot of criticism, because it seems unjust to attract someone for something at a cheaper cost which wouldn’t be available to him after he starts using it. This will hook the customer with that product and the companies will be able to charge unnecessarily high price for that product. There have been many deals made for using this business model. Complementary goods are being amongst the top of the list for this kind of business model. One other term associated with the bait and hook model is tying. Tying has been thought to be anti-competitive in nature and has been criticized by many consumer rights organizations.

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