The “Razor and Blade” strategy is a time-honored pricing scheme for maximizing corporate profits. So how does a couponer turn this scheme to her advantage ? By seeking out introductory coupon offers, of course!
Razor and Blade originally applied, you guessed it, to men’s grooming devices. The underlying marketing strategy has since been applied to many different categories in which there any type of device which requires proprietary refills, from mops to inkjet printers.
Under the Razor and Blade strategy, the manufacturer sells the device itself for a very low price, often free or better with coupon or rebate. Profits are made from selling refills or replacements for parts that are designed to wear out. They just want to get the device in your hand, and the initial package or ‘kit’ will always come with at least a starter size of the refillable part. Once you install or start using the product, the manufacturer hopes you will love it, or at least you will like it enough that you will not want to start over with a competitor’s device.
This technique explains why new razor models are accompanied with really aggressive coupons, but the coupons on replacement blades are hard-to-find and rarely very lucrative. The big profits are made on the refills.
Several years ago, we had a color laser printer in our home office. The printer itself was about $600. Toners were $120 for each of 4 colors, and every so often the ‘imaging drum’ needed replacement at $200. Based on these prices, whenever the drum needed replacement, it was cheaper just to buy an entirely new printer! Sitting in a home office, I worried about my expense budget. If this had been a corporate office, then we probably would have sprung for the replacement parts without a 2nd thought.
There is nothing improper or illegal about the Razor and Blade strategy, even when the starter kit is sold for less than its cost. In fact, R&B is one of the more brilliant pricing techniques out there. Couponers should rejoice whenever they see this strategy employed, because it can result in fantastic deals if you can recognize the technique.
The key is to avoid behaving as they want you to. Instead of simply accepting the single free starter kit, feel free to collect as many as possible. When Glade and Airwick were launching those automatic air freshener machines, coupon values and store promotions were running rampant. Rather than settling for a single device from each brand, we collected them, so much that we have yet to buy a refill of these fabulous products.
The second technique is to be willing to switch brands. You might be happy with your Gillette Razor now, but as Axe enters the shaving market, there are bound to be some tantalizing deals. Take them happily.