sending out whatever the current model of their razors are.
To men every time whenever their 18th birthday hit,
they send them the razor, they send them the cartridges.
And that marketing push is focused on getting those new prospects
to stick with that brand for the rest of their lives.
Yeah, there's this strategy.
It's referred to as a razor and blade strategies.
We're going to let you require the product itself, the razor,
at a relatively low price and if we get you acquired as a customer,
you're going to keep on replacing those razor blades and
that's where we're going to generate revenue in the long term.
So first and foremost, we have to get you to acquire this particular product.
We've got to get you to adopt our brand, and
then we're going to continue to get benefits based on your usage.
In terms of magazine subscriptions, saying we'll give you that first issue for free,
or we'll give you three, four months of the magazine for free, it's getting over
that hurdle of will the customer or will the prospect at least try us out.
And in a lot of cases people will maintain their subscriptions especially if they're
using credit cards and you have auto renew set for those payments.
So the biggest challenge is getting new readers for the subscriptions.
And same idea if we're talking about the telecommunications industry.
Lots of discounts offered upfront if you're willing to switch your provider.
If you move into a new area, they're willing to give you, let's say,
a year's worth of promotional pricing for those new customers.
Because, again, that's where the challenge is.
It's harder to acquire customers, often times,
compared to keeping those same customers around.
So a lot of spending focused on customer acquisition,
because, well, in order to generate any revenue, we have to acquire that customer.
The challenge comes in when
we're trying to figure out how much should we be spending on perspective customers.
And which perspective customers should we be spending that money on?
And we want to balance how much we invest in acquiring customers against well, how
much do we expect to generate in revenue from that customer over the long term?
So we've gotta identify what does it cost to get that person.
Is it going to pay for the revenue that is produced?
Is that going to at least cover our acquisition costs?
If not, it might not be a good prospect to go after.