• The “bait and hook” marketing strategy is also known as the “razor and blade” model. 
• Inviting the customers with bait and keeping them engaged with the hook is the basis of this strategy. 

The “bait and hook” marketing strategy, also known as the “razor and blade” model, offers bait to entice customers but with a hook to keep them engaged. Sometimes, businesses offer a product at a low price, which is the bait to lure customers, and the real profit comes from selling them essentials at higher prices. That’s the hook. 

It’s a widely used tactic by businesses, brands, stores, etc, to attract customers and generate recurring revenue. For instance, the store near you that sells milk does not get much out of it due to lower margins, but whenever a customer comes to buy milk, they might buy other things with higher margins. A classic use case of “bait and hook” marketing strategy. 

How did Spotify successfully use the “Bait and Hook” marketing strategy? 

In free and paid formats, Spotify offers access to a vast music library, podcasts, audiobooks, etc. Interestingly, Spotify’s free tier offerings with ads are a classic example of a “bait the hook” marketing strategy. Here’s how it works.

The Bait: 

Spotify intelligently offers the bait in the form of a free music streaming service. They offer free access to a vast library of music, podcasts and audiobooks for free. Users can listen to these offerings on multiple devices, acting as “bait” to entice customers. Audiophiles are attracted to such offerings, and if they are provided for free, it’s more welcoming. 

Initially, Spotify offered the option to create playlists, which allowed multiple users to listen to their favorite songs for free. But soon, they realized that this was a hindrance to their subscription programs. Now, it plays related songs instead of the ones in your playlist—also, multiple ads asking for subscriptions act as the hook to invite customers to subscribe. 

The Hook

As discussed above, Spotify’s freemium model comes with certain limitations and constant ads. There are annoying interruptions between songs, limited skips, and no on-demand playback, meaning you cannot choose a specific song. These limitations created a gentle push or nudge towards the premium subscription. 

The Spotify premium subscription is the “hook.” It provides an ad-free experience, unlimited skips, and on-demand playbacks with higher-quality audio. It also creates a significantly more enjoyable and convenient listening experience for audiophiles. 

How Did Incorporating This Strategy Help Spotify’s Success? 

Spotify’s premium subscription upgraded the value proposition for its customers. By allowing them to experience the music without limitation, Spotify targeted users who craved uninterrupted music and wanted more control over their listening experience. Intelligently, the company portrayed this upgraded learning experience as a natural step toward an enhanced experience. 

Spotify’s “bait and hook” approach is considered a classic example of a freemium model. It allowed Spotify to attract a larger audience under its free tier. Even if 30% of the audience had upgraded to premium, Spotify still had a considerable boost in revenue. Free users also contribute by listening to ads, which is an additional income stream. 

Spotify capitalizes on its user-friendly interface, making it easy for users to navigate and discover music. It also allows users to share playlists and follow friends, adding social elements that fuel user engagement. Spotify is also constantly innovating by adding new features and content, keeping users interested and coming back for more. 

By offering its free customers limited exposure to its offerings, Spotify effectively placed the “bait” in the market, while the premium offerings were the “hook.” Interestingly, both free and premium members generate revenue for the company, creating a win-win scenario for the company and its customers. 

How does the “Bait and Hook” marketing strategy work? 

The “Bait and Hook” marketing strategy depends on two significant factors: the bait and the hook. Experts advise marketers to use them strategically and intelligently. 

The Bait: 

Marketers should understand that the bait must be low-cost, but it could also be a free product that has the potential to grab customers’ attention. There’s no need to invest heavily in the bait, as no fisherman would invest more than the hook. The bait could be a starter kit, a trial version, a discounted initial purchase, or a freemium model with limited features like Spotify. 

Also, the bait’s price point should be attractive, or it should try to make it a low-risk proposition for customers to try it. For example, Gillette offered razors at a minuscule price but made maximum revenue by selling the blades and related essentials. This bait must be attractive enough to captivate users’ attention. 

The Hook: Bait and Hook

This is the key element of this marketing strategy because it generates ongoing revenue. It’s the consumable, refillable, or upgradeable component that the customer needs to keep using the initial product. For instance, by offering razors, Gillette opened opportunities for selling blades, refills, etc. 

Other prominent examples include refills for printers like ink cartridges or blades for razors. Car manufacturers often sell their cars at relatively low prices but make more money from genuine spare parts. Similarly, Spotify and YouTube offer subscriptions for their ongoing service with added benefits. 

Why is the Strategy Effective? 

This marketing strategy has a relatively low barrier to entry, as it comes with a low initial cost. It allows customers to try the products, which helps overcome the initial purchase hesitation. Once the customers have invested in the initial product, they are more likely to continue buying refills, upgrades, and peripherals. 

For example, if you bought a car from a particular manufacturer, you will likely purchase spare parts from their genuine stores. This ensures compatibility and avoids wasting their initial investment. The “razor and blade” marketing strategy helps create a steady income stream from repeat purchases. 

Pros and Cons of “Bait the Hook” Marketing Strategy

Similar to every other marketing strategy, this “bait-and-switch” strategy has pros and cons, as discussed below. 

Pros

This strategy helps increase customer acquisition, create a recurring revenue stream, ensure customer lock-in, and provide higher profit margins. The low initial cost of the “bait” entices customers who might otherwise have hesitated to buy a new product. It could significantly increase brand awareness and attract a more profound customer base. 

The “hook” has the potential to create a steady revenue stream from repeat customers, further providing financial stability and predictability for the business. Plus, once the customers have invested in the initial product, they’re more likely to stick with the brand. This could ensure brand loyalty, with higher profit margins leading to greater overall profitability for the business. 

Cons Bait and Hook

If customers feel that the “bait” is cheap or useless without the related “hook,” they might consider the strategy deceptive. This can significantly damage the brand reputation and lead to customer churn. If the main emphasis is on selling the “hook,” it can overshadow the quality and value of the initial product. 

This suggests that the brand prioritizes short-term sales over long-term customer relationships. Sometimes, customers might become overly reliant on low “bait” prices and resist future price increases for the “hook.” In some cases, the “bait” could be a disposable product, leading to increased waste. 

If you, too, want to incorporate this marketing strategy into your business, you must consider certain aspects prior to doing so. The bait needs to be valuable enough on its own to attract customers. The quality of the hook is essential. If it’s not good, customers might not buy it. 
This “bait-the-hook” or “blade-and-razor” marketing strategy has the potential to scale revenue, boost brand awareness and engagement, and build brand loyalty. Multiple brands are already using this strategy, and you can use them as an example to tailor the strategy according to requirements.