The Double Sell

June 7th, 2009

Or the upsell – depending how you look at it.

Buy a Playstation – what’s the next thing you buy? An extra controller, a game, a stand.

Playstation3 even lost money for every unit they sold.  Why? Well they needed to establish market share as all the profit is in peripherals and games.  If they can gain that market share they can keep profiting for each and every add on purchased.

You see the same with iPods, Beds, Tvs.

But how can you do the double sell for services?  Whereby you sell an excellent product but you can maximise your profits through the value added peripheral services.  You are probably creating more problems with your solution anyway – so why not do the double sell and solve them.  That would be a real big win.

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2 Responses to “The Double Sell”

  1. Miki Szikszai Says:

    This is the razor blade model.

    You sell the handle cheap and the blades expensively. There is a marketing trick in here – understanding the *perception* of value.

    Consumers buy the same blades over and over because they have bought the handle. If they stopped to think a minute they’d realise they could easily (and cheaply) change to brand B but their need for convenience (and inherent resistance to change) means they keep buying Brand A.

    What you are talking about is vertical integration. Isn’t a better model to look at someone else’s razor blade handle that they have used to buy market share and add value to that? Then you can flex with the market rather than painting yourself into a corner. Game producers do this well producing the same franchise over multiple platforms. They learn to be agile and meet the same need irrespective of the core platform.

    M

  2. Ben Young Says:

    @Miki Thanks for building on the conversation and you’re right it is vertical integration! Looking at someone elses razor blade handle and delivering on that is a cunning way to gain market share.



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