Friday, June 9, 2017

Explaining the upsell model with Porky and Daffy

Upsell models are not necessarily innately evil, but they often align the incentives that way.

If the model is based on leveraging customer satisfaction – – if you're happy with the introductory packet, you'll just love the deluxe – – then there is absolutely nothing wrong with the approach. This model is fairly common in healthy, efficient, truly competitive markets. When people are free to choose, the system works.

If, on the other hand, customers are locked in and there are impediments to switching to a different product, this creates an incentive to make the entry level product just good enough to keep people from storming out the door but bad enough that an upgrade is often necessary for a satisfactory experience.

I could illustrate the point with examples from the airline and cable TV industries, but wouldn't you rather just watch the cartoon?

Dime to Retire by MistyIsland1

No comments:

Post a Comment