Cycle glossary

Captive product pricing is a strategy where a company sets the price of a product low, often at or below cost, in order to attract customers. Once the customers are "captivated" by the low-priced product, the company then sells them complementary or related products at a higher price to make up for the initial loss. This strategy is similar to the concept of selling razors cheaply and making profits on the blades. In product management, captive product pricing can be used to drive customer acquisition and increase revenue by selling additional features or add-ons to customers who have already purchased the core product.